Inventory levels continue to be one of the most crucial metrics to monitor following a busy spring and the implementation of import tariffs. In May, sales slowed, but that allowed the number of cars available on dealership lots to improve.
New car day supply averaged 64 days in May, up by six days month over month and five days year-over-year according to Lotlinx’s May 2025 Vincensus Report. Used cars were up two days month over month and one day year over year, sitting at 40 days total.
The slight jump in inventory is positive, but consumer affordability continues to be impacted by high interest rates and rising transaction prices. On average, new vehicles are priced at $44,365, while used vehicles come in at $28,913. Despite this, used vehicle sales increased by two percent month-over-month, driven by competitive pricing and more aggressive markdown strategies.
Carryover and Aging Inventory
Carryover inventory was mostly flat between new and used vehicles, with new carryover inventory dropping by one percent to 51 percent. This is still three percent higher than last year. Used carryover stayed at 44 percent, right where it was last year. Meanwhile, aged inventory for used cars grew by three percent, making up 46 percent of all units. New aged inventory was down two percent month over month but still up by two percent year over year.
Markdowns were flat for new vehicles but increased three percent for used vehicles. Roughly 41 percent of used vehicles were sold with a reduced price in May with an average markdown of five percent.
Automaker Performance
Automakers experienced varied performance throughout the month. Ford emerged as a leader in EV growth, with the Mustang Mach-E doubling its April sales, aided by a three percent reduction in list price. Electric vehicles overall experienced a seven percent month-over-month increase in sales. Honda, a consistent performer in the hybrid market, faced a substantial decline in sales, marking an 11 percent drop month over month. This mirrored an eight percent drop for all hybrid in the month.
Audi demonstrated resilience in pricing, reducing new inventory list prices by five percent while maintaining strong margins. Cadillac saw an impressive 31 percent surge in EV sales, driven by models like the Escalade IQ and Vistiq SUV.
Toyota remained efficient, with top-selling hybrids like the RAV4 Plug-In maintaining an 18-day supply and less than eight percent aged inventory across its lineup. Land Rover faced challenges, as inventory days for models such as the Range Rover Sport increased by 61 days month-over-month. Subaru, on the other hand, achieved significant inventory growth, up 32 percent, while simultaneously reducing aged inventory levels by 10 percent, showcasing their ability to adapt operations effectively.
Actionable Insights for Dealers
The data underscores the critical necessity for dealers to take proactive measures. Lotlinx recommended an adaptative approach to meet the current dynamic market landscape. Based on the report’s findings, here are three key strategies to consider:
- Leverage Data-Driven Pricing Tools: With 41 percent of used vehicles sold at a reduced price, competitive pricing remains an essential tool to maintain momentum in both new and used car markets.
- Prioritize Digital Marketing: 46 percent of vehicle listings were not viewed daily, highlighting a gap in visibility. Investing in smarter digital campaigns can help scale engagement.
- Focus on Inventory Management: There’s no telling what will happen to overall vehicle inventory in the coming months. Managing high day supplies, especially for high demand vehicles, will be vital to maintaining profitability.
“Dealers will need to manage economic pressures, rising inventories, and shifting market dynamics while adapting to a more digital, consumer-centric business environment,” the Vincensus report said. “Proactive inventory management, competitive pricing strategies, and a focus on customer engagement will be critical to navigating these challenges effectively.”
Related Stories:
