New Vehicle Inventory Hits 15-Month Low as Prices Begin to Rise Amid Tariff Concerns
In the latest report from ZeroSum, the automotive market is facing mounting challenges as new vehicle inventory in the United States plummets to 2.84 million units as of May 2025—marking the lowest level since February 2024. This significant decrease in available inventory is compounded by an increase in average prices, with the average marketed price for new vehicles seeing a $200 uptick from late April to late May.
The tight inventory situation is ushering in a series of price hikes across the industry, as manufacturers and dealers prepare for potential tariffs that may further impact pricing in the upcoming months. As tariffs loom, the automotive landscape is shifting, driving both consumers and dealers to reassess their positions. The average prices for used and certified pre-owned vehicles have also seen increases, with used vehicles rising by $800 to a new average of $26,400 and certified vehicles climbing by $1,030 to $38,000.
The ongoing shift in the market is reshaping profits for dealerships, as the growing uncertainty around new vehicle pricing drives consumers toward used and certified options. Josh Stoll, Vice President of Dealer Success at ZeroSum, takes note of these developments, remarking that the used vehicle sector is beginning to achieve a level of stability amidst the chaos of the new vehicle marketplace. Stoll emphasizes that with original equipment manufacturers (OEMs) tapering off promotional pricing strategies, used vehicles are set to become a pivotal part of the sales strategy for dealerships trying to maintain profitability.
Moreover, there is an observable trend where consumers are proactively making vehicle purchases in anticipation of rising prices, leading to a surge in 'pull-ahead sales.' Since late February, pull-ahead vehicle sales have accounted for approximately 460,000 transactions, with May alone witnessing 120,000 units sold, down from an average of 170,000 units in March and April.
Discounts and incentives for buyers have also been on the rise, averaging $2,065 throughout May, a noticeable increase from $1,891 in April. Yet, as the month concludes, the aggressiveness of these promotional efforts appears to be waning, hinting at an inevitable upward trend in pricing as the end of certain OEM discount programs comes into play.
Consumers are now in a 'wait-and-see' mode regarding new vehicle purchases, even as they continue to engage the market at a rate that is still above historical averages. Speaking to the dynamics at play, Stoll states that while demand remains relatively strong, the market appears to be bracing for the full impact of forthcoming price increases due to tariff considerations.
To navigate these challenges, ZeroSum continues to provide cutting-edge market intelligence solutions designed specifically for automotive dealers. This report, 'State of the Dealer,' serves as a critical resource for understanding movement trends in both new and used vehicles, as well as pricing patterns and inventory turnover.
In summation, as the auto industry braces for tariff impacts, dealers are advised to closely monitor inventory levels and competitors' pricing strategies to enhance their sales performance and ensure sustained profitability amidst fluctuating market conditions. For a comprehensive analysis, dealers can access the full ZeroSum report, which includes in-depth insights on vehicle movement, turn rates, and pricing trends across the automotive landscape.
The tight inventory situation is ushering in a series of price hikes across the industry, as manufacturers and dealers prepare for potential tariffs that may further impact pricing in the upcoming months. As tariffs loom, the automotive landscape is shifting, driving both consumers and dealers to reassess their positions. The average prices for used and certified pre-owned vehicles have also seen increases, with used vehicles rising by $800 to a new average of $26,400 and certified vehicles climbing by $1,030 to $38,000.
The ongoing shift in the market is reshaping profits for dealerships, as the growing uncertainty around new vehicle pricing drives consumers toward used and certified options. Josh Stoll, Vice President of Dealer Success at ZeroSum, takes note of these developments, remarking that the used vehicle sector is beginning to achieve a level of stability amidst the chaos of the new vehicle marketplace. Stoll emphasizes that with original equipment manufacturers (OEMs) tapering off promotional pricing strategies, used vehicles are set to become a pivotal part of the sales strategy for dealerships trying to maintain profitability.
Moreover, there is an observable trend where consumers are proactively making vehicle purchases in anticipation of rising prices, leading to a surge in 'pull-ahead sales.' Since late February, pull-ahead vehicle sales have accounted for approximately 460,000 transactions, with May alone witnessing 120,000 units sold, down from an average of 170,000 units in March and April.
Discounts and incentives for buyers have also been on the rise, averaging $2,065 throughout May, a noticeable increase from $1,891 in April. Yet, as the month concludes, the aggressiveness of these promotional efforts appears to be waning, hinting at an inevitable upward trend in pricing as the end of certain OEM discount programs comes into play.
Consumers are now in a 'wait-and-see' mode regarding new vehicle purchases, even as they continue to engage the market at a rate that is still above historical averages. Speaking to the dynamics at play, Stoll states that while demand remains relatively strong, the market appears to be bracing for the full impact of forthcoming price increases due to tariff considerations.
To navigate these challenges, ZeroSum continues to provide cutting-edge market intelligence solutions designed specifically for automotive dealers. This report, 'State of the Dealer,' serves as a critical resource for understanding movement trends in both new and used vehicles, as well as pricing patterns and inventory turnover.
In summation, as the auto industry braces for tariff impacts, dealers are advised to closely monitor inventory levels and competitors' pricing strategies to enhance their sales performance and ensure sustained profitability amidst fluctuating market conditions. For a comprehensive analysis, dealers can access the full ZeroSum report, which includes in-depth insights on vehicle movement, turn rates, and pricing trends across the automotive landscape.
Topics Auto & Transportation）
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