New car inventories rising and prices falling, but not much yet
Dealer inventories reach highest level since June 2021
Relief may be on the way for new car shoppers.
Two new reports indicate that recent high prices could soon begin to deflate.
Supplies appear to be catching up to demand, according to data from Cox Automotive, which shows new car and truck inventories have reached their highest levels since June 2021, near the beginning of the ongoing semiconductor chip shortage.
There were 1.32 million vehicles in inventory in September, representing a 42-day supply, according to Automotive News.
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Car dealer inventories are improving. (Steve Pfost/Newsday RM via Getty Images / Getty Images)
That figure was approximately 500,000 vehicles higher than September 2021's supply and up 90,000 from August.
However, it was still two million vehicles lower than it was in September 2019, when the auto industry was functioning normally.
Average transaction prices dropped for the first time in five months in September. (David Paul Morris/Bloomberg via Getty Images)
Pre-pandemic supplies typically ran in the 65 to 75-day range.
Cox Automotive-owned Kelly Blue Book also found that the average transaction price for a new vehicle dropped in September.
The $48,240 average represented a small, .3% decline worth $146, but was it the first in five months.
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Incentives remain low, however, and shoppers are still paying above sticker price, with non-luxury vehicles going for $44,215 or $829 above MSRP.
Inventories are still running at just over a third of pre-pandemic levels. (Robert Knopes/UCG/Universal Images Group via Getty Images)
"Interest rates and average monthly payments were up in September, which means affordability worsened," Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive, said.
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"With prices still well above MSRP and incentives from automakers still low, sales in September continued to struggle as consumers weighed their vehicle-buying options."