Need for Vehicle Affordability Becoming More Pronounced, According to New CarGurus Report

Core Insights - The Q3 2024 Quarterly Review by CarGurus highlights a shift in consumer demand towards more affordable vehicles amid economic uncertainty and high interest rates [1][2] Group 1: Consumer Trends - Consumers are becoming more prudent with their spending, leading to increased demand for affordable cars, particularly in the price segments of $20,000 to $30,000 for new vehicles and $15,000 to $20,000 for used vehicles, which accounted for 43% and 59% of annual sales growth respectively [2] - The used car market is seeing significant growth in sales for vehicles priced at $30,000 and under, while sales of cars over $30,000 have declined [2] Group 2: Market Dynamics - Hybrids are outperforming electric vehicles (EVs) in 2024, with new hybrids making up nearly 11% of total retail sales compared to 4% for EVs, and hybrid retail sales volumes have increased by nearly 44% year-over-year [3] - There is a growing inventory of aging new cars on dealer lots, with about 58,000 listings being two years or older, representing a nearly 58% increase compared to pre-COVID averages [3] Group 3: Economic Influences - The upcoming presidential election may negatively impact vehicle sales demand, as historical data shows declines in sales during election years [3] - Recent interest rate cuts are expected to have a muted immediate effect on affordability, as auto loan rates typically follow longer-term treasury rates rather than the short-term Federal Funds Rate [3]