Latest News
2025 Chevrolet Colorado ReviewHigher Vehicle Inventories Leave Room to Negotiate
Supplies are rising for many carmakers. The longer a vehicle sits on the lot, the greater the opportunity for buyers to talk down the price.
Returning to “Normal?”
The car market has been through a lot of ups and downs over the past few years. Supply shocks drove inventories down and prices skyward. Inflation has been rough all over. but particularly so in the automotive sector with new car prices peaking just south of $50,000. After four years of upheaval, supply is finally beginning to catch up to demand, and in the case of some makes and models even exceed current demand.
It’s been a sellers’ market for much of the post-covid era, but the longer those models sit on dealer lots, the more likely those dealers will be open to negotiating on price. In fact, inventories across the industry are up 36 percent year-over-year as of February. Last month saw the average new car had an 80-day supply, the highest number since January of 2020. These higher inventories are not evenly distributed, however. As some models are seeing high supply and modest sales, others are harder to come by, with low inventory numbers and long wait times for delivery.
A Tale of Many Segments
Looking at the segment level provides insights into what’s hot now. Crossovers are up year-over-year, now comprising 49.9 percent of the market. Small cars are thriving as well, making up 7.4 percent. Pickups, once the darling of the US automotive market, are down for the year, comprising 16.2 percent of the market, as are SUV at 9.8 percent. Manufacturers love their high-margin pickups and SUV, but it appears car buyers are shifting toward smaller, more affordable options represented by crossovers and small cars.
EV Oversupply an Opportunity
Hybrids, plug-in hybrids, and EVs continue to see growth, now representing 18 percent of the new car market. While the pace of growth has slowed for EVs specifically, new EV sales were still up by 47 percent in 2023. Indeed, EVs specifically represent an opportunity for car buyers as prices have been trending lower (the result of Tesla aggressively cutting prices) and inventories are higher than average at a 114-day supply. Models like Nissan’s Leaf and Ayria as well as Ford’s Mustang Mach-E and F-150 Lightning are over-supplied and ripe for negotiation. Just as EVs are becoming more affordable and easier to come by, high-demand hybrids are among the hardest vehicles to procure, as we’ll see below.
High and Low Model Inventories
Carmakers Stellantis and Toyota represent two opposite ends of the market when it comes to supply. Stellantis models make up a disproportionate number of high-supply vehicles while Toyota’s models are among the most meagerly supplied. As with pickups and SUV, high price-tag luxury models are also sitting for long stretches on dealer lots.
Among the vehicles with the largest supply are the BMW X2 with 772 days of inventory, the Audi SQ8 at 521 days, and Volvo C40 at 385. The Ford Mustang Mach-E, as noted above, has a healthy supply of 404 days’ worth of inventory. Stellantis brand vehicles with high inventories include the Dodge Hornet at 443 days, the Dodge Charger at 326 days, and both the RAM 2500 and Jeep Grand Wagoneer at 323 days. Those big numbers are a headache for dealers but a boom for car buyers looking for a deal.
On the opposite end of the spectrum are hot luxury models like the Cadillac Escalade, BMW X5s and X7s, and smaller pickups like the Ford Maverick and Toyota Tacoma. Models with the least amount of inventory include the Land Rover Range Rover with just 17 days of supply, the Lexus GX and Kia K5 with 21 days. Chevy’s Traverse and Bolt EUV are also among the hottest buys. Toyota’s Sienna, RAV4, and Prius all have low supply numbers. Other vehicles with low supply numbers and high demand include the Ford Bronco, Toyota Grand Highlander hybrid, Honda CR-V hybrid, Hyundai’s Ioniq 5, and the Kia Carnival.
The hottest cars on the market indicate robust demand, even in the face of inflation. Meanwhile, those vehicles with the highest inventories evidence both a healing global supply chain and renewed negotiating power for savvy car buyers.
