The scarcity of used cars in the U.S. market, kept static between 2.2 and 2.3 million for four months, is set to drive up retail prices, following an increase in wholesale rates since late August. The number of unsold cars on U.S. lots fell by 8% year on year in October to around 2.26 million, equating to a 47-day supply at current sales rates, significantly below the targeted 60-day inventory.
This inventory shortfall has been particularly pronounced for lower-priced cars. Used vehicles priced under $10,000 currently have a 32-day supply. This tight inventory situation suggests that new car buyers should ideally have an annual income of $100,000, as cars under $20,000 have 'nearly vanished.' The highest supply, which stands at 58 days, is found in the over $35,000 category across both luxury and non-luxury brands.
Honda (NYSE:HMC) HMC, Mazda MZDAY (OTC:MZDAY), and Toyota (NYSE:TM) TM had the smallest September inventory among non-luxury brands. Kelley Blue Book anticipates that used car prices will remain high due to automakers producing eight million fewer cars during the pandemic. These vehicles may never appear in the used market, keeping prices higher than what Americans are typically used to seeing.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.