As vehicle availability continues to challenge both dealers and shoppers, CarGurus is happy to introduce a new monthly report from our Director of Industry Insights & Analytics, Kevin Roberts. The Vehicle Availability Index & Insights report will deliver his in-depth research and outlook for coming months.
The US auto industry continues to be buffeted by COVID-19, though not as directly as we witnessed last year. The lack of available semi-conductors is creating major hurdles for OEMs, suppliers, and dealers as Q2 production plans have been further impacted.
New inventory levels remain impacted not only by limited production, but also by a historically high level of consumer demand for new vehicles. This surge in private mobility appetite has increased sales, and coupled with production constraints, further reduced inventory availability. The CarGurus Vehicle Availability Index dropped to 36.8 for new vehicles, a decline of 51.9% compared to last year. However, we witnessed a promising sign with used inventory holding steady at 88.2, a slight increase of 4.3% year-over-year.
Tightened inventory has led to further increases in the average listing price of inventory as well. The average listing price of a new vehicle shot up to $39,985, a month-over-month increase of 3.6% and 5.7% year-over-year. While new inventory has been more impacted than used, we’ve seen a more substantial increase in used prices. Used listing prices in May rose to $27,169, an increase of 6.2% month-over-month and over 34.7% year-over-year. Used prices have been rising due to historic increases in wholesale prices as well as a reduction in inventory for vehicles priced under $20k.
Beyond increasing prices, we’ve also seen higher vehicle demand impact the number of days vehicles are available on market. The average number of days on market for new vehicles came in at 79.7 days in May, a drop of 38% year-over-year. Used sees even fewer days on market at 54.6 days, a decline of 7.8% from April. This trend of fewer vehicles on market has reduced the overall levels of incentives spent on vehicles as well as highlighted the need for consumers to keep an open mind when shopping.
Looking ahead, we’re likely to see continued new vehicle inventory attrition in June with hopes that production constraints will ease in the third quarter, allowing inventory levels to stabilize. However, a full recovery in inventory volumes is unlikely to happen in 2021. The surge in demand for private mobility will likely keep rising as consumers buoyed by significant stimulus over the past year are un-swayed by increasing prices and continue to look for safe means of transit in a post-COVID world.
To learn more about the trends impacting vehicle inventory, download the CarGurus Vehicle Availability Index & Insights May 2021.