Car Market Analysis Report July 2024
July 15th, 2024 by Garrett Eddings
The car market in July 2024 presents a mixed landscape for both new and used vehicles. Here are some key insights:
New Car Market
- Prices and Inventory: The average price for new cars is around $49,000, having seen a slight decrease of 1% compared to the same period last year. New car inventory has increased by 13% from the first half of 2023, providing buyers with more options and slightly better pricing leverage?.
- EV Influence: The electric vehicle (EV) market continues to grow rapidly, with significant increases in both demand and inventory. New EV prices have seen a minor decrease of 4% from last year, despite having surged by 56% over the past five years?.
Used Car Market
- Prices and Trends: Used car prices have fallen by about 5% in 2024, yet they remain relatively high compared to pre- pandemic levels. The average listing price is approximately $25,540. Used EV prices have notably dropped by nearly 20% in the first half of 2024, making them a more attractive option for buyers??.
- Interest Rates: High interest rates continue to impact the used car market, with average loan rates for used cars hovering around 13% APR, significantly affecting the overall cost of purchasing a used vehicle?.
- Inventory: The used car market is experiencing tight inventory, down by 4% compared to the first half of 2023. This scarcity has contributed to higher prices and a more competitive market?.
Market Dynamics
- Consumer Behavior: Consumer spending and sentiment fluctuated, with a notable decline in May followed by an uptick in June. This variability is impacting car sales and overall market stability?.
- Trade-In Values: Trade-in values have increased significantly, providing buyers with additional leverage when negotiating new or used car purchases. Despite a slight decrease in the first half of 2024, trade-in values remain elevated compared to pre-pandemic levels??.
How Does This Affect the Car Market in California?
The automotive landscape in California is always in a constant state of flux and market day supply has become even more important. Part of the effects that the dealer community had to experience was the MMR (Manheim Market Report) being delayed and reporting analytics for June while the market was continually dropping. This causes a lot of inexperienced car dealers to over evaluate their vehicles and take in vehicles higher than the market will typically support.
Things You Can Do to Help Prepare for A Highly Volatile Market
- Focus on the cheaper units – Lower priced vehicles have seen an inflation in this market, causing any unit that can be retailed for under $15k to go for higher prices at auction and vehicle under 10k to be worth gold in the private market and at dealer auctions. It’s not necessarily that these vehicles are better, it’s more about providing inexpensive options to retail customers in a struggling economy.
- EV tax credit – There are many used electric vehicles that qualify for an EV tax credit with customers that are in a certain income bracket. Although there are many dealers that have yet to embrace electric vehicles. When customers are struggling to come up with down payments in this economy, being able to provide an instant $4k potentially for a down payment becomes a game changer between potentially making a deal and not being able to get a customer financed.
In summary, while new car buyers can benefit from improved inventory and slightly lower prices, used car shoppers face high interest rates and competitive market conditions. The EV market continues to expand, offering more options and better deals for those interested in electric vehicles.
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