According to the CarGurus‘ Q1 2024 Report, inventory and demand are rebounding, but where does that leave affordability? On today’s episode of Inside Automotive, Kevin Roberts, the director of industry insights and analytics at CarGurus, elaborates on their findings.
Key Takeaways
1. Kevin Roberts mentions the sharp decline in inventory for affordable vehicles, with new vehicles under $20,000 decreasing by 95% compared to Q1 2020. This scarcity poses a challenge for consumers, especially those re-entering the market after several years.
2. Despite economic pressures like gas prices and inflation, there’s a fascinating surge in searches for luxury vehicles priced over $50,000. This trend indicates a segment of consumers looking for upgrades rather than budget-friendly options, presenting potential opportunities for the industry.
3. While interest in EVs and hybrids is growing, particularly on the used market due to declining prices, there’s still a significant price premium for new EVs compared to traditional vehicles. This trend, however, is a promising sign of the industry’s shift towards sustainability despite the challenges of consumer adoption rates.
4. Roberts reflects on the strong demand for vehicles in Q1, even amidst concerns about high interest rates. This resilience suggests that consumer demand remains robust, potentially driven by factors like pent-up demand and a wider selection of vehicles available.
5. Looking forward, the uncertainty surrounding interest rates is highlighted as a significant factor that could either restrict or stimulate consumer demand. Gas prices are also mentioned, although their direct impact on vehicle demand is expected to be less significant compared to other factors like interest rates and inventory availability.
"The biggest thing that kind of surprised me was how strong demand was in Q1, particularly after how kind of weak the spring selling season was last year." – Kevin Roberts
