Record New Vehicle Days-to-Move Hits All-Time High
ZeroSum "State of the Dealer" Report Points to Elevated Pricing and Used Vehicle Pressure as Key Factors
The average time it takes to sell a new vehicle jumped by five days to a five-year high of 80 days. Additionally, new vehicle movement is projected to drop from 1.07 million units to 1.03 million this month. These marketplace dynamics indicate that automotive retailers must prioritize Used and Certified Used vehicle sales for success this month.
Understanding the Factors Behind Days-to-Move
In January, the Days-to-Move reached 80 days, a significant increase from 60 days a year prior and up from 75 days a month earlier. This trend marks the highest average in the past five years. Although suggested prices for new vehicles experienced a seasonal decrease to $49,500 in January, consumer costs have held steady around the $50,000 mark throughout the preceding year and into the new year.
Josh Stoll, a Senior Director at ZeroSum, remarked, "We are at a crucial juncture in the new vehicle market. Current market dynamics have led to prices remaining unexpectedly high, given the supply and demand landscape, and North American tariffs could further amplify these prices. With the Days-to-Move trending at multi-year highs, additional pricing pressures on consumers could exacerbate an already challenging sales environment for dealers."
Shifts in the Used Vehicle Market
Inventory for used vehicles remained stable at 1.96 million units from December to January, while the movement of used vehicles grew by 100,000 units, leading to an increase in Turn Rate from 57% in December to 62% currently. Used vehicle prices have seen a steady decline, decreasing from $27,400 in December to $25,600 recently, facilitating a positive trend in the movement of these vehicles while simultaneously impacting the new vehicle market.
Certified used vehicle stock saw a minor decline from 219,000 to 210,000 but stayed above the 200,000-unit mark for the fourth consecutive month. Prices in this segment averaged around $37,000, which is $2,000 lower than their peak last year. Furthermore, the Turn Rate for certified used vehicles climbed to 82%, marking the first instance above the 80% threshold since September.
Challenges Faced by Dealers
While both Used and Certified vehicle segments witnessed increases in Days-to-Move, dealers may need to shift focus toward the used vehicles market in the coming weeks to maximize sales opportunities. With prices trending downward in the used sector, this may provide an advantageous situation.
About ZeroSum
ZeroSum is an industry leader in software, marketing, and data analytics, utilizing its SaaS platform, MarketAI, to revolutionize automotive marketing through artificial intelligence and data-driven strategies. The company is at the forefront of connecting consumer demand with automotive data in real-time, empowering dealers to navigate the ever-evolving market landscape. More information can be found on their website, www.zerosum.ai.
Frequently Asked Questions
What is the average Days-to-Move for new vehicles?
The average Days-to-Move for new vehicles has reached 80 days, the highest in five years.
What factors are affecting vehicle sales?
Elevated pricing, market dynamics, and consumer cost pressures are significantly influencing vehicle sales.
How are used vehicles performing in the current market?
Used vehicle inventory remains steady, with movement increasing while prices are gradually falling, fueling more sales.
What is ZeroSum's role in the automotive industry?
ZeroSum provides cutting-edge software, marketing, and data solutions that enhance the ability of dealers to sell vehicles effectively.
How can dealers adapt to current market pressures?
Dealers may benefit from focusing on the used vehicle market as prices decline and sales momentum builds.
