The old logic of car shopping may finally be returning after several years of chaos in the car market. That includes the old rule that December is the best time to car shop.
With no more microchip shortage and no more strike threat, America’s car dealers have plenty of inventory. But the pace of new car sales isn’t catching up to the supply.
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“A slight rise in sales volume is expected in November, but the sales pace will decline for the second straight month,” says Cox Automotive Senior Economist Charlie Chesbrough. Cox Automotive is the parent company of Kelley Blue Book.
“October is normally one of the slowest sales months of the year, and the buying pace generally increases in November and December,” he explains. “This year, however, despite more discounting and more promotion, we are expecting the sales pace to slow slightly in a weak buying climate.”
That comes even though dealers have, on average, a 67-day supply of new cars to sell. Traditional industry practices tell them to aim for 60.
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Inventory, Chesbrough says, is “at the highest level since March 2021.” It’s particularly high for full-size trucks and SUVs. Automakers built up a large supply of those anticipating the strike, but the United Auto Workers (UAW) union adopted a unique tactic of closing factories gradually rather than all at once. It settled the strike before closing most large truck and SUV factories. So automakers are stuck with an oversupply.
That could mean discounts heading into December. December is traditionally the best time of year to car shop, as some automakers pay a year-end bonus to dealers based on total sales numbers. Dealers are often willing to accept less profit on each deal to increase their numbers as the deadline approaches.
