Negotiate Truck Prices Today; Here’s How to Navigate SUV Shortages

by Justin Fischer | Last updated May 4, 2023 | Car Buying, New Cars

Heading into this summer car buying season, patience will reward shoppers with savings. However, a closer look at market data reveals a shocking reality: deals are very hit-or-miss in 2023. Frankly, your likelihood of buying a new car under MSRP depends on what exactly you’re shopping for. On top of that, notable differences exist between regional markets. To bring much-needed clarity to the car market in 2023, we’re sharing the latest analysis from CarEdge Data. Let’s dive in.

Ford, Ram and GM Can’t Sell Their Expensive Trucks

Among the metrics employed to track the new car market, days’ supply is one of the most widely-used. Through the industry’s ups and downs from 2020 through the present, this data point was the bellwether at every turn. But what exactly is days’ supply, and how is it calculated?

Days’ supply is a calculation used in the automotive industry to determine how long it would take for dealerships to sell their current inventory of vehicles based on the average daily sales rate. It is calculated by dividing the number of vehicles in inventory by the average daily sales rate over a certain period of time.

Here’s the car buyer’s guide to auto sales jargon and terms to know.

Historically, a 60 days’ supply is considered normal or average in the auto industry. As we’re about to see, few of the top-selling models in America are anywhere near normal heading into summer.

An Abundance of Trucks, and a Shortage of Affordable SUVs

Are you in the market for a new truck in 2023? We have good news for you. There’s a huge oversupply of trucks in most markets as demand for overpriced inventory dried up earlier this year. Dealers are holding on to their trucks for too long, and with high floorplanning costs, they’re paying the price. 

Car dealer floorplanning costs refer to the interest charges that car dealerships incur when they finance their inventory with a line of credit from a bank or a finance company. Essentially, the dealership uses the line of credit to purchase new cars from the manufacturer, and then pays interest on the loan until the cars are sold to customers. The longer the cars sit on the lot unsold, the more interest the dealer has to pay. This is why it’s important for dealers to move their inventory quickly and efficiently.

Examples of Truck Negotiability

We’re seeing truck prices steadily drop in most markets. Check out these examples from CarEdge Car Search. This brand-new Ford F-150 on sale in the Dallas area has had no fewer than four price adjustments in the past few months, yet it remains on the lot after 290 days. The CarEdge Negotiability Score takes into account days on market, local supply, and other factors to give this F-150 a 97/100. The dealer is EXTREMELY likely to negotiate.

This new Ram 1500 on sale near Houston, Texas has been on sale for over 285 days. The dealer has been dreading dropping the price, but seems to have finally given in recently. This is the perfect example of a new truck that would be quite negotiable.

Affordable SUVs and Sedans In Short Supply

Is it any surprise that automakers are making more of their higher margin, expensive models and far fewer of the budget models that most drivers want? The best-selling affordable vehicles all have days’ supply well under the 60 day norm in major markets. 

This includes the following best-sellers:

• Toyota RAV4
• Toyota Camry
• Honda CR-V
• Toyota Highlander
• Toyota Corolla
• Chevrolet Equinox
• Hyundai Tucson

Let’s take a closer look at current new car inventory for the 20 best-selling cars, trucks and SUVs last year. We analyzed inventory in the five largest car markets in the United States. The following data is as-of Apr 26, 2023.

New York-Newark-Jersey City, NY-NJ-PA

Los Angeles-Long Beach-Anaheim, CA

Chicago-Naperville-Elgin, IL-IN-WI

Dallas-Fort Worth-Arlington, TX

Houston-The Woodlands-Sugar Land, TX

The trend couldn’t be more clear: there’s a massive oversupply of trucks, and a shortage of popular, more affordable crossovers, SUVs and sedans. Buyers are holding back on truck purchases, yet automakers keep producing more and more. They make less profit per affordable vehicle sold, and in these greedy times, they’re producing less and less of them. We saw it just the other day with the cancellation of the Chevrolet Bolt to make way for $80,000+ electric trucks.

Let’s talk about what you should do to overcome these obstacles when buying in 2023. With a but of insider know-how, buyers still have the upper hand.

Here’s the latest new car inventory numbers (nationwide).

Advice For Car Buyers in 2023

Be patient.

With the latest market update in mind, CarEdge co-founder and auto industry veteran Ray Shefska wanted to share these timely recommendations with car buyers. 

“My advice for buyers can be summed up in one word, patience. With dealer floor plan costs rising and inventory levels growing, a consumer’s patience should be rewarded with lower prices either via direct discounts from the dealership or in combination with manufacturer customer incentives in the form of rebates. Depending on how we see sales play out for the month of May, lower than what they had hoped for, is my expectation. I would not be surprised to see manufacturers offer both customer rebates and subvented interest rates in May to spur slowing sales. Dealers hate aged new vehicle inventory and with trucks sitting for so long, many dealers will react the only way they know how, and that would be discounting trucks to move them.

PATIENCE is the word of the day.”

Be flexible.

To find the best deals in the current market, car buyers need to be flexible in their choices. Buyers may need to be open to different makes and models to take advantage of the best deals. For example, a buyer in the market for a new Honda CR-V may want to test drive the new Nissan Rogue or even a Ford Explorer, two models with more inventory. If you’re shopping for a model that’s in short supply, now’s probably not the time to be picky about paint color, wheels or other nonessentials.

Do your research.

To make informed buying decisions, car buyers should conduct thorough research on the models they are interested in. With CarEdge Data, buyers can access valuable information on depreciation, resale value, and more. Armed with this knowledge, buyers can negotiate better deals and avoid being taken advantage of by car dealerships. Don’t make a hasty decision – take the time to do your research and make an informed choice.

See behind-the-scenes local market data with CarEdge Car Search.

Unlock Premium Car Market Data Today

If you’re in the market for a new car in 2023, it’s more important than ever to make informed buying decisions. With CarEdge Data, you can access proven data on depreciation, resale value, and more to ensure that you get the best deal possible. Don’t let car dealerships take advantage of you – empower yourself with CarEdge Data today.