The Blubber

Per Kelly Blue Book

As of March, U.S. car dealerships had approximately 1.89 million new vehicles in their inventories, approaching levels seen before the COVID-19 pandemic. With the increase in inventory, dealers and automakers have started offering discounts to attract buyers. For the first time in nearly two years, the average sale price of new cars in March was lower than the sticker price.

Car dealers use a metric called "days of inventory" to assess their supply of new vehicles. This metric estimates how long it would take to sell all new cars at the current sales rate if no new vehicles were acquired. Traditionally, dealers aim to maintain a 60-day supply, with an additional 15 days' worth of vehicles on order or in transit. This ensures that dealerships have a variety of options to meet customer preferences. However, for much of the past two years, dealerships have had lower-than-recommended inventory levels, leading to customer dissatisfaction but allowing dealers to sell cars at or above the advertised price.

According to Cox Automotive, the parent company of Kelley Blue Book, the average dealership now has a 56-day supply of new vehicles, a 58% increase from a year ago. In March, sales exceeded one million units in a 30-day period for the first time since September 2021, partly due to improved inventory levels. Consequently, the average new vehicle listing price fell to below $47,000 for the first time since December, and discounts and incentives have increased, especially for leasing deals.

Inventory levels vary by brand. Foreign brands, such as Toyota and Kia, have the lowest inventories, while domestic brands, particularly Stellantis brands, have higher inventories. Luxury brands like Buick, Jaguar, and Infiniti also have high inventories. Vehicles that are typically affordable, such as subcompact and compact cars, have the lowest supply, as do some popular models like the Kia Telluride and Toyota RAV4. However, full-size pickup trucks, including the Ram 1500, Ford F-150, and Chevrolet Silverado, have larger supplies, giving truck buyers a better chance of finding a deal.