Prices of America’s Favorite Cars – SUVs and Pickup Trucks – Are Finally Starting to Fall
- With inventory at record highs, dealers are dropping prices and ramping up incentives on some of the priciest vehicles on the market, including SUVs, pickup trucks, and electric vehicles
- Combined with above-average tax refunds, consumers will find one of the most favorable spring car buying seasons in years
- Used car price declines have largely yet to materialize, but consumers can expect more deals on pre-owned cars in early summer
Chicago, IL – April 11, 2024 – With new car sales slowing in Q1 and inventory at three-year highs, dealers are starting to cut prices on new cars, according to new data from leading AI car shopping app CoPilot. Combined with growing dealer incentives and tax refund season, consumers in the market for a new car will benefit from the most favorable spring buying season since before the COVID-19 pandemic.
While new car prices on average were down by $211 in March, domestic brands – particularly SUVs and pickup trucks – saw more pronounced declines, both down by $500 since March. Additionally, new electric vehicle prices – resulting in large part from decreased consumer willingness to deal with the logistical challenges associated with EV ownership – fell by $302 in March, and some EV models saw substantially larger declines, like the Hyundai Ioniq 5 (down by 4%, or $2,119) and the Volkswagen ID.4 (down by 4%, or $1,825).
Financing and cash back incentives – currently offered on SUVs like the Ford Explorer and Hyundai Tucson – are also sweetening the deal for consumers. Combined with the impact of tax season (the average refund size so far is up by 6.1% compared to last year), consumers are starting to be able to take advantage of noticeable discounts on popular makes and models.
“This is only the beginning of more substantial car price declines to come,” said CoPilot CEO Pat Ryan. “New vehicle supply has stalled at above-average levels in Q1, and SUVs and pickup trucks in particular – which have extremely high inventory levels, at 80 and 78 market days supply, respectively – are languishing on dealer lots. Additionally, as consumer interest in electric vehicles wanes, both new and used EV prices have seen significant declines in recent months.”
“With interest rates and vehicle prices still extremely elevated, consumer preferences have shifted toward smaller, more affordable cars,” Ryan added. “As a result, this spring, dealers will be motivated to get rid of some of the bigger, most expensive cars on their lots. As a result, consumers who are in the market for SUVs and trucks in particular will stand to benefit.”
Some SUVs and pickup trucks that have already seen notable price declines in March include:
- Ford Ranger pickup trucks, down by 3% (or $1,440) - to an average of $44,741
- Hyundai Santa Cruz (pickup truck), down by 2% (or $854) - to an average of $36,013
- Jeep Grand Cherokee SUVs, down by 2% (or $1,089) - to an average of $54,808
- Volkswagen Atlas SUVs, down by 2% (or $1,016) - to an average of $46,815
Most of these models have inventory that is well above the market average, indicating that prices only have further to fall:
- Ford Ranger: 146 market days supply
- Hyundai Santa Cruz: 105 market days supply
- Jeep Grand Cherokee: 89 market days supply
Additionally, while new car prices overall have jumped by 28% since the start of the COVID-19 pandemic (to an average of $49,305), some SUVs have seen relatively modest price increases in comparison. For instance, Ford Explorer prices are up by just $3,578 (or 7%) since March 2020 (and Ford is currently offering an incentive of 1.9% financing for 36 months on this model).
Meanwhile, used cars have not started to see price declines yet (in fact, they increased in price slightly in March, by $203), but CoPilot expects used car prices to drop later in the spring and early summer. One notable exception is used electric vehicles, which currently represent one of the best deals in the used market, with prices 8% this year (to an average of $37,701).
Moving forward, the used car brands to watch for deals are those with low replacement cost ratios – meaning that there is a significant difference between their used price and the cost of a comparable new car. (Because the new model is significantly more expensive, there is more value for consumers in buying used – whereas, if there is not a substantial difference between the new and used price, the consumer might as well buy new).
For example, while the average used car is worth 62 cents on the dollar of a new car, some brands have more favorable replacement cost ratios:
- Used Chryslers: worth 49 cents on the dollar of a comparable new model
- Used Kias: worth 58 cents on the dollar of a new car
- Used Hyundais: worth 59 cents on the dollar of a new car
As car prices continue to decline this year, CoPilot’s Index will track their month-over-month movements, as well as the replacement cost that measures value for used brands. Moving forward, CoPilot’s Index Reports will offer insight on the best deals within the segments, like SUVs and pickup trucks, that are already showing the most substantial declines.
About CoPilot
CoPilot is the leading AI-assisted car shopping app that provides consumers with an expert partner for high-consideration purchases, starting with car buying and ownership. The platform combines massive real-time data with a winning combination of human expertise and AI-powered search to introduce transparency to the shopping, purchasing and ownership journey. The mobile application takes the time, frustration, and guesswork out of the process, empowering people to easily navigate the risks of shopping for high-value items, and to buy with confidence at the right price and the right time.
Media Contact:
Kerry Close
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