New-Car Prices Dip Amid Supply Challenges, While Used Market Stabilizes

The automotive market is witnessing a shift as new-car prices decrease, driven by supply surpluses in specific brands, while the used-car market remains relatively stable. This dynamic between the new and used segments is shaping consumer choices and dealer strategies.

New-Car Market: Surplus Inventory Lowers Prices

New-car prices in September dipped 1.5% year over year, a trend largely influenced by excess inventory among Jeep, Ram and Dodge. These brands hold an average of 131 days of unsold inventory, significantly above the market average of 72 days in September. Oversupply pressured prices downward in September, with Jeep’s average list price down 5% YoY and Ram experiencing a 7% decline. Dodge prices fell 3%, but days live surged by 165%, reflecting the impact of discontinued models like the Challenger. Those three Stellantis brands, along with another Stellantis brand, Chrysler, comprised the four slowest-selling mainstream brands in September due to oversupply and carrying some of the highest average prices among mainstream brands despite price drops. However, all four of these brands have below-average scores in Cars.com’s New Car Price Index, which estimates the full cost to buy and finance a vehicle, necessitating that Stellantis deploy heavy customer incentives and discounts to help sell down inventory.

The slowdown in sales for new models like the Dodge Hornet, which saw days live spike by almost 400%, highlights the challenge some brands face in moving newer inventory. Despite these pressures, the overall average price for new vehicles in September remained at around $49,000, in line with average pricing for the past year. Brands like Toyota and Honda, which continue to face supply constraints, have bucked this trend with YoY price increases of 3% and 8%, respectively, due to their strong demand.

Seasonal Trends and Inventory Adjustments

The new-car market in September saw a seasonal dip in searches, down 5% month over month, following typical post-Labor Day patterns. The impact of Hurricane Helene in the southeastern U.S. (Florida, Georgia, Tennessee, Virginia, and the Carolinas) further contributed to September’s slowdown, with demand down by -7% week over week starting Sept. 26 in affected markets compared to -1% WoW for the rest of the country. The full effects on demand, sales and inventory —especially due to production halts at some plants— won’t be fully visible until the end of October when the complete impact of Hurricane Helene and the fast-following Hurricane Milton is assessed. However, inventory levels in September remained elevated for now, up nearly 30% YoY as manufacturers like Ford, Chevrolet and Honda replenished stock after 2023’s chip shortage recovery.

Ford led inventory growth in September, with models like the Super Duty F-250 and Bronco driving a 33% YoY increase. Chevrolet and Honda have also expanded inventory significantly. Despite the rise in inventory, the market gradually stabilized in September, with days live averaging 72 days — up 42% YoY but still below the 80-day average we saw in 2019.

Used-Car Market: Stability Amid Easing Prices

In contrast to the fluctuations in new-car pricing, September’s used-car market remained stable. The average used-car price in September was $28,882, down 5% YoY as the market adjusted to improve new-car availability. This stability made used cars an attractive option for budget-conscious buyers in September. However, these consumers are still paying higher prices for older, higher-mileage vehicles, with the average vehicle age increasing to 5.2 years. The average odometer reading for September reached 60,716 miles, up 2% YoY. Despite the increase in age and mileage, used-car prices have remained flat for the past six months, suggesting a more balanced market.

EV Market: New and Used Paths Diverge

Electric vehicles continue to be a hot-and-cold topic for manufacturers and consumers, and the market dynamics differ between new and used models. In September, new EV inventory increased by nearly 50% YoY, led by GM’s expanded lineup, including the Chevrolet Blazer EV and Cadillac Lyriq. However, this influx of new models is not always translating into sales, with many new EVs sitting on dealer lots longer than the EV average — 86 days in September compared to 72 days for all fuel types.

Affordably priced models like the Chevrolet Equinox EV fared better in September, showing promise as demand for reasonably priced electrified options grows. Meanwhile, the used EV market is benefiting from lower prices in September, with a 9% YoY decline compared to a 5% drop for all used vehicles, making these vehicles more accessible. This price drop drove a 32% increase in used EV searches compared to a 2% decrease for all used-car searches on Cars.com as consumers seek out value in a market still adjusting to the high costs of new electrification.

A More Equitable Market

As new-car inventory rises and prices moderate, consumers may find greater incentives to consider new overused, especially when financing terms are favorable. However, the stability and affordability of the used-car market and a broader selection continue to attract buyers who are more price-sensitive or unable to find the right new car for their budget and needs.

September’s market suggests the industry is finding a new equilibrium as brands manage inventory levels and adjust pricing strategies while introducing 2025 models. This stabilization offers consumers more choices while creating opportunities for brands to refine their approach to meeting the evolving demand in the months ahead.