Affordability is Making a Comeback as New-Car Prices Dip Below $49K for the First Time in a Year, According to Cars Commerce February Industry Insights Report

• New-car prices recede below $49,000 for the first time in over a year. February saw the average new-car price fall to $48,942 from a high of $50,000 in August 2023 — signaling increased dealer discounts and automaker incentives and mirroring the buyer-friendly market conditions seen before the pandemic. 
• The share of entry-level new cars is on the rise. Market share for vehicles under $30,000 increased for the second straight month, from 13% to 14%, after months of stagnating at 12%. While this is good news, 14% is still far from the 38% inventory share held by vehicles in this category pre-pandemic. 
• Days on lot are up more than double for new cars. Rising inventory and softening demand mean new vehicles are sitting on lots for an average of 65 days — compared to the 30-day average during the pandemic’s new-car supply shortage — and it’s pushing prices down. 
• Used vehicles under $20,000 have, on average, over 22,000 more miles compared to pre-pandemic vehicles. It isn’t much better for used models under $30,000, which average about 11,000 more miles compared to pre-pandemic vehicles.
• Used EV prices dropped almost 20% year over year, causing a nearly 30% increase in consumer demand. With an average price of $38,000, used EVs offer more affordable options for shoppers. 

Additional insights from February that are noteworthy include: 

• EV incentives and tax credits provide pricing relief to some EV buyers. The Volkswagen ID.4 (No. 1) and the Hyundai Ioniq 5 (No. 4) both have a lower total cost to purchase and finance, putting these EVs in the top five of Cars.com’s New Car Price Index.
• Cadillac and Toyota are the fastest-moving new-car brands. Cadillac takes the crown for fastest-moving luxury brand, driven by the XT4 and XT5 models, while Toyota leads mass-market brands thanks to the RAV4, Corolla and Sienna.
• Domestic-branded pickup trucks hold the top four new-car searches on Cars.com. Toyota is the only non-domestic brand featured in the top 10 thanks to the reputations of the Tacoma and Tundra models for reliability and durability.
• Every 24 seconds, a review is submitted on Cars.com. Consumers left over 113,000 reviews on Cars.com in February, setting up 2024 to be another record-breaking year for reviews on the platform. Online reviews provide real-time feedback about customer experiences, ultimately impacting a dealership’s online reputation.