Buyers are returning to the new and used vehicle markets in hopes of finding a good deal, even as pre-pandemic levels of affordability remain distant, according to CarGurus’ first quarter review.
Over the last four years, car prices have skyrocketed, effectively blocking all but the most wealthy buyers from the market. While this lack of affordability has, so far, had only a moderate effect on sales, which have remained surprisingly stable, CarGurus’ data indicates that consumers are now returning to the market in full force.
“Rebounding inventory and moderating prices are fueling pent-up demand despite high interest rates,” remarked Kevin Roberts, director of industry insights and analytics at CarGurus. “Our research shows sales for both new and used vehicles are, so far, outpacing last year’s levels.”
That being said, affordability remains well off, even though Roberts notes that average prices may be due for a 7% decline among new vehicles and a 14% decline among used cars.
While searches on CarGurus’ platform for used vehicles priced below $10,000 surged roughly 20% from Q1 2023, the number of preowned model listings in that price range has declined 46% since the onset of the COVID-19 pandemic.
Similarly, the number of new vehicles cheaper than $20,000 has plummeted 95% over the last four years, even though searches for new models are up 33% year-over-year. These data points highlight the vast distance between what consumers want in terms of pricing and the actual level of affordability the market is able to offer.
