Dealers in the U.S. are entering the second quarter of 2024 with an inventory that has increased over 50 percent from last year.

According to Cox Automotive, dealers nationwide opened in March with 2.74 million new vehicles on hand— 942,000 units, or 52 percent, more than a year ago.

Dealers nationwide ended January with an average of 80 days’ worth of cars on hand. They ended February with 76. Most car dealers try to adhere to having about 60 selling days’ worth of cars in stock, allowing them to have a combination of colors and features you’re looking for on hand.

Stellantis Backlog

The company with the biggest issues reportedly is Stellantis, which ended February with more than double the industry’s average supply for their Rams, Chryslers, Jeeps, and Dodges.

The inventory backload is forcing dealers to discount cars to sell them. The final sale price of the average new car has been dropping steadily throughout 2024.

Incentives are rising, making up 5.9% of the average deal in February, rising from 5.7% a month earlier and 3.1% in February 2023.

Buyers Market

Not every dealership is having to deal with inventory and price issues. Toyota, Honda, Lexus, and Land Rover are all understocked by traditional standards, allowing dealerships to charge higher prices, confident that if you don’t buy their car, another buyer willing to pay close to the manufacturer’s suggested retail price (MSRP) will arrive.

An analysis by Kelley Blue Book released March 11 found new-vehicle transaction prices (ATP) was down less than one-tenth of 1% from the revised January figures.

The average transaction price of a new vehicle in February was $47,244, down 2.2% from a year ago and down 5.4% from the market peak in December 2022.