Once again, we don’t mind highlighting someone that could be deemed as competition to our Car Inspection Score brand. KBB has inspired us on our journey and we think their platform is a great asset for the car buying industry - but we think we’re doing it a touch nicer. :)
Here’s KBB’s take on the current state of the car market.
New Car Market:
New car buyers paid an average of $49,220 in May, $236 less than April - just 1.2% higher year-over-year
Incentives totaled 7.1% of the average transaction price
Luxury vehicles and high-end trims are skewing the average up - the average full-size truck buyer spent more than $66,000 despite starting prices in the low $40,000s
Used Car Market:
The average used car sold for $26,918 in May - 6% higher than a year ago and the highest average since mid-2023
Dealers now carry a 45-day supply, which should balance supply/demand by mid-summer
Budget vehicles under $15,000 remain in short supply
Big Trend - Gas Prices Changing Behavior:
76% of car shoppers say gas prices are influencing what vehicle they'll consider
Hybrid shopping on KBB.com jumped 25% vs. Q4 last year; EV shopping is up 20%
Tariff Impact:
Imported vehicles saw price increases of $5,000-$8,900; domestic vehicles rose $1,600-$2,000 due to tariffs on materials like steel and aluminum
Loan Conditions (Good News):
Lenders approved 72.4% of applications with an average down payment of just 13.5% - the easiest loan qualification in nearly four years
⚠️ Warning sign: nearly 6 in 10 buyers are rolling negative equity from old loans into new ones
Disappearing Budget Cars:
Sales of vehicles priced $25,000 or less have fallen 78% in five years - automakers offered 36 models in that range six years ago; today just four
Meanwhile, models priced $60,000+ grew from 61 in 2017 to 114 this year
KBB's Recommendations:
Buying: Expand your search area, stay patient, consider less expensive trims, watch for dealer markups/junk fees
Selling: Good time to sell - selling privately via KBB's Private Seller Exchange typically nets more than selling to a dealership
Trading In: Shop around between dealers since demand for your specific trade-in varies by dealership
Thanks for reading everybody!
-Paul