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Even though many predicted they would by now, President Trump’s tariffs haven’t watered down new car sales. Even though many prophets of doom were proven wrong, they’ve simply predicted the industry crash will come later this year, if not early next year.
Is a growing chip shortage going to once again impact new car supply?
But a new CarGurus Intelligence Report has shocked many, showing the new car market remains resilient instead of buckling under the pressure of tariffs. In fact, sales have been so strong that new inventory levels at dealerships nationwide are down three percent year-over-year.
One might attribute that to the rush of shopping before tariffs went into effect, but CarGurus data doesn’t bear that out. It shows that over three quarters of vehicles sitting on dealer lots were put on the market after tariffs went into place.
Also surprising, the report shows the inventory of used cars sitting at dealerships is on the rise. That in turn gives you as a shopper greater leverage, especially the longer certain vehicles have sat.
In another counterintuitive reality, tariffs for now seem to have dropped car prices. You might not believe it, but CarGurus says listing prices for new vehicles have dropped one percent versus where they sat before the tariffs were instated.
That might be in part thanks to automakers and dealers throwing in incentives to attract buyers as they perceive the competition to be heating up.
Everyone can quickly tick off car models which have seen a price increase recently, but that’s anecdotal evidence, not something you can hang your hat on.
Thankfully, we have big data sets that aren’t driven by ulterior agendas. From this we learn the auto industry isn’t on the verge of collapse but in fact is doing quite well at the moment. Does that mean trouble isn’t on the horizon? Of course not – this data is showing what’s recently happened, not where we’re going.
Image via Nathan Guerrero/Facebook Marketplace
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