Used Car Inventory Piles Up Despite 6% Price Drop From Last Year

Now that tax refund season is over, it would seem that used vehicle inventories are once again swelling. According to analysts, there has been a rise in second-hand cars sticking around on dealer lots, with levels growing month on month from the beginning of April to the start of May.

Compared to May 2023, used car inventories in dealerships across the country have risen by six percent, with 2.27 million unsold vehicles remaining as of May 2, 2024. The used vehicles’ supply also increased to 46 days, representing a two percent increase from the month prior, but was the same as what was seen in 2023.

Read: New Car Prices Creep Back Up After Months of Hibernation

The days’ supply metric is one of many used by analysts to gauge the health of the automotive market and measures the number of vehicles on dealer lots. More days of supply generally correlates with weaker demand for used cars.

According to analysts at Cox Automotive, the slowdown in sales is not entirely unexpected. However, it comes off the back of a “muted Spring bounce.” The period before usually yields more movement, as a tax-refund-driven climate often results in higher sales numbers.

The best-selling used car brands were the usual suspects: Ford, Chevrolet, Toyota, Honda, and Nissan. The top five car brands’ vehicle prices traded at an average of $23,316.

Good news for second-hand car buyers is that, versus the same period last year, the average used-car price at the beginning of May was 6 percent down from 2023. At $25,571 it was still slightly up from beginning of April’s average of $25,536.

However, for those looking for cheaper options, the report shows that there’s still a constriction on the supply of cars under $15,000. The days’ supply of used vehicles in this cheaper bracket currently only sits at 36 days, which is 22 percent less than any other price range.