New vehicle inventory on auto dealer lots hit 3.14 million units in October, the second consecutive month new vehicle inventory jumped by 90,000 units (2.9 percent), according to the recently released ZeroSum‘s report for November.
The “State of the Dealer” report cited a main reason is the increase a result of model year changeovers, with 2025 counts up by 362,000 units and 2024 numbers down by 255,000 month-over-month.
And ZeroSum analysts noted the growing supply is impacting both new and used vehicle pricing. The average marketed pricing declined by more than $300.00 and market adjustments below MSRP (discounts and incentives) grew for the eighth consecutive month for new-vehicle.
Nearing Pandemic Highs
New vehicle inventory still remains below historical levels of 3.3-3.5 million but continues to move closer each month. While the industry has not returned to the oversupply situation that was in place prior to the pandemic, that outcome is now at least within shouting distance.
“Over the course of the long inventory recovery period, vehicle counts have remained lower than they were prior to the pandemic,” said Jeff Englishmen, Vice President of Dealer Success at ZeroSum, in a press statement released with the report. “While we are still not back to an oversupply situation, the recent acceleration of growth points to the potential of that reoccurrence.
“We aren’t seeing significant shifts in sales velocity yet, but dealers should be aware of these big picture market dynamics when pricing and supporting their inventory positions.”
Report Highlights
Zero Sum predicts both used and certified used sales volumes will fall in November—used will fall from 1.27 million units in October to 1.21 million units in November, while certified used will fall from 168,000 in October to 161,000 in November.
In other findings:
- New vehicle turn rates remained relatively stable, rising to 37 percent in October from 36 percent in September
- New vehicle days-to-move grew one day to 70 in the last month
- Used vehicle turn rates went from 64 percent to 65 percent from September to October
- Used vehicle days to move went from 43 in September to 44 in October
The average price for certified used vehicles has fallen from $39,351.00 in August to $38,166.00 in October—a decline of more than $1,000, according to the monthly publication.
“The used vehicle market has been very steady over the past year, both in terms of supply and demand,” said Englishmen. “However, we are starting to see some initial signs that the sales velocity trends are weakening slightly, which definitely bear watching going forward.”
