In 2023, the automotive market continues to navigate the unpredictable seas of supply and demand. A lingering used car shortage from previous years is causing 2-3-year-old in-demand models to skyrocket in price, while new car inventories are bloating due to overproduction. What does this mean for you, the savvy car shopper? Let’s dive in.
New and Used Car Inventories Are Headed in Opposite Directions
The latest data from Cox Automotive shows that in many cases, there’s a shortage of 2-3 year old used cars. For in-demand models that are just a few years old, demand far exceeds supply. Dealers are using this to their advantage (to the surprise of no one…) and are marking them up severely. For the brands we’ll talk about below, 2-3 year-old used cars often cost nearly the same as a brand-new car. There’s a totally opposite situation for NEW cars. For many makes and models, there’s now an oversupply of new cars in 2023, just two years after the car shortages of 2021.
New car available supply (total vehicles on the lot) is up 71% since last year, and dealerships are finding their lots chock-full of shiny new cars.
In terms of days’ supply, today’s market is up 47% since spring 2022. Days’ supply is a common auto industry metric that is calculated by dividing the total number of available vehicles by the average daily sales number from the last 45 days. It’s one of many available insights for every new and used listing with CarEdge Data.
790,000 more vehicles on sale today compared to May 2022 means dealers are more motivated than ever to cut deals and move inventory. However, despite this surge in supply, the average listing price for a new car is still 5% higher than last year.
On the flip side, used car inventory is 13% lower compared to last year. High prices have led buyers to say NO to used cars, resulting in a 4% drop in sales rates and listing prices. However, these prices remain stubbornly above 2021 levels.
New Car Inventory By Brand
With brands like Toyota, Lexus, Kia, Honda, Subaru, Hyundai, BMW, and Land Rover, new car supply shortages are making used models a more attractive option than their new counterparts. How so? Dealers continue to markup these cars in many markets.
On the other hand, brands like Ford, Lincoln, Dodge, Ram, Chrysler, Jeep, and Buick are dealing with a glut of new cars, making new vehicles especially negotiable today, and offering more value than used inventory at nearly the same price AFTER negotiation.
Based on the latest new car inventory, these brands are most negotiable in 2023:
Nationally, these automakers all have current new car inventory well above the historical norm of 60 days’ supply. See local days’ supply for models you’re interested in with CarEdge Data on Car Search.
Using the tools available through CarEdge Data, we analyzed new car inventory by brand in the three largest markets across the nation. Some notable differences are seen across California, Texas, and Florida.
|Brand||Days' Supply (CA)||Days' Supply (TX)||Days' Supply (FL)|
Hyundai, Nissan, Mitsubishi and Audi have much higher inventory on the West Coast, while Toyota, Kia and Honda have higher new car inventory in Texas. Be sure to check local market supply in your area to get the best sense of negotiability.
New Car Inventory By Segment
In terms of segments, compact cars, midsize cars, subcompact cars, compact crossover/SUVs, minivans, and full-size crossover/SUVs are experiencing a supply shortage.
Conversely, full-size pickup trucks, high-end luxury cars, electric vehicles, full-size cars, and uber luxury vehicles are enjoying a much higher days’ supply than average.
New car segments like vans, mid-size SUVs, most luxury cars and traditional hybrids have roughly average inventory right now.
It’s a Great Time to Go Electric
Right now is a great time to be in the market for a new EV. Across all brands, there’s a nearly 90-day supply of new electric vehicles. This can be seen in models such as the Ford Mustang Mach-E, which now has over 150 days’ supply. That’s up over 100% since last year.
Tesla keeps lowering prices, and with the Model Y, has severely undercut prices for the following popular competitors:
- Hyundai IONIQ 5
- Kia EV6
- Genesis GV60
- Audi Q4 e-tron
- Nissan Ariya
- Ford Mustang Mach-E
In other words, there’s finally serious competition in the EV landscape. Is it a price war? So far, Tesla’s competitors have not fired back with steep price cuts of their own. We’ll see if that changes this summer. However, used Tesla prices have fallen drastically this year.
Remember, the EV tax credit landscape has changed in the past several months. Popular EVs from Hyundai, Kia, Audi and others no longer qualify due to made-in-America requirements. However the most popular electric vehicles in America, which are of course those bearing the Tesla badge, once again do qualify for the first time since 2019. Here’s an updated summary of where things stand with the EV tax credits.
New Cars Are Looking Better Than They Have in a While
Whether it’s better to buy new or used in 2023 largely depends on the brand and type of car you’re interested in. Industry-wide, new cars are looking better than they have in years. Popular brands are facing an oversupply, and with that comes greater negotiation power.
With fluctuating inventories and prices, it’s crucial to stay informed and flexible. Use CarEdge Car Search to check the local days’ supply of the makes and models you’re interested in, and make sure to stay updated with the latest market trends to snag the best deal.
Whatever your choice, remember that data is your best friend when navigating the complex landscape of car buying. Your team of CarEdge Car Coaches is here to help! Happy car shopping!
Love your stuff. I cannot resist saying however, you should be carefull with the words “less” and “fewer”
“There are FEWER cars on the lot” is correct. “The car now costs LESS money” is correct.
“There is FEWER water in the glass” is incorrect. “There are FEWER water molecules in the glass” is correct.
Thanks, aka Dr. Grammatikov
I appreciate all I have learned through caredge.com and the YouTube channel. However, I am no longer in the market for a new or used car and would like to cancel my membership. I’ll be back should I need another car.