Driving into Reality: New Car Prices Slowly Returning to Earth
The automotive market has seen a gradual shift in recent months, with new car prices starting to show signs of returning to more reasonable levels. This correction is being fueled by the increasing inventory across the industry, which is helping to push prices in the right direction. According to the CarGurus Intelligence Report for February 2024, while prices are on the decline as inventory concerns ease, there is still plenty of room for improvement.
### New List Prices on the Decline
The report highlighted that new list prices have decreased by 1.3% since February 2023 and 0.3% since January of this year. This drop can be attributed to the substantial growth in new car inventory levels, with a 65% increase from the previous year and a 5.2% rise since January. Despite this positive trend, inventory levels still remain 25.9% lower than pre-COVID-19 levels, and prices are still notably higher by more than 30%.
### Model-Specific Price Corrections
Certain specific models have seen more significant price corrections compared to others. The Ford F-150 Lightning experienced an average price decrease of almost 23%, followed closely by the Mercedes-Benz SL-Class with a 22.3% drop. The Ford Mustang Mach-E and E-Transit claimed the third and fourth spots, respectively, while the Kia Niro EV rounded out the top five.
### Models with the Largest Price Declines
1. Ford F-150 Lightning: -22.8%
2. Mercedes-Benz SL-Class: -22.3%
3. Ford Mustang Mach-E: -19.3%
4. Ford E-Transit: -12.2%
5. Kia Niro EV: -9.8%
6. Kia EV6: -9.7%
7. Chevrolet Bolt EUV: -8.7%
8. Kia Rio: -8.5%
9. Hyundai Kona EV: -8.4%
10. Nissan Rogue: -8.4%
### Vehicles Seeing Price Increases
On the contrary, some vehicles are witnessing price increases in the current market. Pick-up trucks and commercial vehicles have shown the most substantial gains, with the Chevrolet Express van’s MSRP soaring by over 31%. Following closely behind, the GMC Savana Chassis van experienced a 28.2% increase. Models like the Toyota Prius Prime and the Mercedes-Benz Metris Van also saw price growth, while the Toyota Tacoma rounded out the list with an almost 12% price hike.
In conclusion, while new car prices are slowly aligning with reality, there is still progress to be made in terms of inventory levels and price corrections. The market continues to show signs of normalization, providing hope for more affordable options in the near future.