Memorial Day Sales Boost

In a surprise, it looks like we saw a Memorial Day boost for sales demand in May, as the 45-day rolling average of sales started to pull higher mid-month. For used vehicles, this resulted in a 6.2% increase in the CarGurus Vehicle Demand Index month-over-month (MoM) and a 9.2% increase year-over-year (YoY), with the index reading approaching May 2022 levels. This reversal in used sales trend puts more upside into a potential full-year outlook and also suggests we could see a stronger-than-expected June if sales demand can keep up. New sales continue to see solid year-over-year gains as inventory levels recover and incentives begin to return to the market.

Used prices remain neutral

Even with the increase in sales demand, we didn't see a corresponding increase in used prices in May. In fact, prices decreased by 0.1% MoM and are now down 7.5% YoY at $28.6k. With wholesale prices now looking to be in decline, we could see additional moderation in used prices in the coming months, which could help to keep demand momentum positive.

EV Prices moderating?

Continuing the price moderation trend, there seems to be a shift in EV pricing. New EV average list prices have been rising MoM for three months now, increasing by 0.7% in May. Used EV prices saw their average list price increase MoM for two months now with a 1.3% increase last month. This suggests EV prices might be stabilizing, and consumers looking for deals, particularly on used EVs, might want to act soon.

Other key trends:

• New inventory continues to climb reaching its highest point since May 2020, nearing the upper limits proposed in previous years.
• The Chevrolet Express Chassis became the first non-EV to appear on the top 10 list of vehicles with the biggest used price declines in some time, indicating a slowdown in EV price depreciation.
• Hybrids continue to sell faster than EVs, with an average of 41 days to turn for new and 37 days for used compared to 80 days for new EVs and 42 days for used in May.