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Consumer Searches for Cars on the Rise
Increased buyer interest can boost dealers’ sales and profits, reports CarGurus.
2 Min Read
Affordability is key to continued buyer interest.Getty Images
There is good news for dealers who work to boost volume to minimize lower prices and incentives that cut into their profits.
CarGurus’ 2024 Mid-Year Review shows that consumer search activity for affordable vehicles has grown to compensate for high interest rates and rising insurance costs.
“In many ways, the market at midyear is in a robust position with pent-up demand fueling sales, and improved pricing and selection giving shoppers more options,” says Kevin Roberts, director of Industry Insights & Analytics at CarGurus. “But this momentum is dependent on affordability as consumers face factors that are raising the all-in cost of car ownership today.”
At midyear, used-car searches on CarGurus for listings under $10,000 were up 26% from like-2023. New-car searches under $30,000 were up 36% over the same period, raising the competition in a price segment that accounts for just 13% of listings.
Consider the following points to gain insights into how to entice consumers to consider buying:
Prices are moderating: The average price of a used car now is $28,496, down 8% year-over-year, while the average new-car price is $50,214, down 3.3%. New inventory has increased 68% year-over-year, helping cool prices.
2023 models could be priced to move: With new-car inventory at four-year highs and 2025 models coming onto dealer lots, remaining 2023 models offer a chance for shoppers to buy new at a bargain.
Oversupply of new EVs is helping to moderate pricing: Price adjustments on existing models and the introduction of more affordable options have helped the average new EV price decline by 9% from its high point in January 2023, down to $63,102. (see chart below for more details.)
Sedans have hit the sweet spot: The hunt for affordability is translating to an uptick in demand for new compact sedans, which have an average listing price of $29,600. Year-to-date, sales demand for the body style is up 17%.
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