Dealers' #1 source for auto industry news, content, coaching & analysis

Used vehicle market stabilizes amid fluctuating inventory and hybrid price dynamics

This shift in used inventory marks a shift from previous challenges.

The U.S. used vehicle market is showing signs of stabilization, largely due to increased inventory of newer model years, which has helped offset previous shortages.

In October, the CarGurus Used Vehicle Availability Index rose 2.3% compared to the previous month. However, inventory levels are still down by 2% compared to the same time last year. This recovery in supply, combined with stronger-than-expected demand in the latter half of the year, has helped keep used vehicle prices relatively stable through the third quarter. Nevertheless, prices began to decline again in October, falling by 0.9% from the previous month and more than 5% year-over-year.

This shift in used inventory marks a shift from previous challenges. While the supply of 2020 and 2021 model years has dropped significantly, a growing influx of 2022 and 2024 models is helping to balance overall availability. Yet, market watchers remain cautious, as the shortage of late-model vehicles may continue to impact availability and prices in the coming months.

Certified pre-owned vehicles gain traction with rising inventory 

Certified Pre-Owned (CPO) vehicles are increasingly popular among buyers looking for the reliability of a new car without the steep price tag. In response, CPO supply has grown by over 8% YoY as of October, creating more options for buyers in this segment. Meanwhile, prices for CPO vehicles have slightly moderated, with a YoY decline of 0.4%, providing a potential cost-saving alternative amid higher new vehicle prices.

However, this uptick in CPO supply comes with a trade-off: the age and mileage of CPO units have risen as automakers expand the qualifying criteria to include older models. From January 2020 to October 2024, the average age of CPO vehicles increased by nearly 1.5 years, reaching 4.5 years on average. While this expansion offers buyers a broader selection, it reflects an evolving CPO market where higher-mileage and older vehicles are increasingly common, albeit without drastic increases in average mileage, which has risen only 2,400 miles to 30,000.

Hybrid prices show diverging trends across new and used markets

Hybrid vehicles are experiencing dynamic pricing trends in both new and used markets. For new cars, hybrid prices have dipped below those of traditional internal combustion engine (ICE) vehicles, a rare shift observed at the end of October. This decrease brings the average hybrid price $88 lower than the average ICE vehicle price, a marked change from last year’s $4,000 premium for hybrids. This price convergence is likely driving the growth in hybrid sales seen throughout Q3.

In contrast, the used hybrid market is witnessing price increases. The average price difference between used hybrids and ICE vehicles has widened to $7,000, up from $4,300 at this time last year. Increased demand for hybrids, coupled with limited supply, is pushing prices higher in the used market. Interestingly, used hybrid pricing is now approaching levels seen in the battery electric vehicle (BEV) market, as consumers opt for these fuel-efficient options in an era of fluctuating fuel costs.

These evolving trends in used inventory, CPO availability, and hybrid pricing underscore the complexity of the current automotive market. As supply and demand dynamics continue to shift, consumers and dealers alike will need to stay alert to changes that could impact vehicle availability and affordability in the months ahead.

Stay up to date on exclusive content from CBT News by following us on Facebook, Twitter, Instagram and LinkedIn.

Don’t miss out! Subscribe to our free newsletter to receive all the latest news, insight and trends impacting the automotive industry.

CBT News is part of the JBF Business Media family.

Jaelyn Campbell
Jaelyn Campbell
Jaelyn Campbell is a staff writer/reporter for CBT News. She is a recent honors cum laude graduate with a BFA in Mass Media from Valdosta State University. Jaelyn is an enthusiastic creator with more than four years of experience in corporate communications, editing, broadcasting, and writing. Her articles in The Spectator, her hometown newspaper, changed how people perceive virtual reality. She connects her readers to the facts while providing them a voice to understand the challenges of being an entrepreneur in the digital world.

Related Articles

Manufacturers In This Article

More Manufacturer News

Latest Articles

From our Publishing Partners