SANTA MONICA, Calif., Sept. 3, 2020 /PRNewswire/ -- After a months-long drought in new vehicle inventory and a spike in used car prices during the coronavirus pandemic, car shoppers can look forward to some relief in the new vehicle market this Labor Day weekend. According to the car shopping experts at Edmunds, more 2021 model year vehicles are making their way into dealerships as automakers ramp up production. Edmunds data shows that 4.6% — or approximately one out of every 20 vehicles sold — in August were 2021 models, compared to 1.8% — or about one out of every 50 vehicles sold — in July.
Since dealers will aim to start clearing out 2020 model year vehicles to make way for this newer inventory, Edmunds experts say car shoppers can expect slightly better discounts over the Labor Day weekend. Edmunds data shows that new vehicle prices have already begun to soften: The average discount on 2020 model year vehicles climbed to $3,111 in August compared to $2,968 in July and $2,845 in June.
"It's been a tough summer for many reasons, but the good news is that things are starting to look up for new-car shoppers. Although these increases in inventory and discounts aren't dramatic, they're still solid indicators that the market is returning to a more normal state," said Jessica Caldwell, Edmunds' executive director of insights. "This Labor Day weekend won't necessarily be a big doorbuster bargain event like previous years, but it still presents a good opportunity for car shoppers to take advantage of decent discounts and lower interest rates."
Although new vehicle prices have dropped over the past few months, Edmunds data reveals that used vehicle prices continue to rise. The average list price for 2017 model year vehicles climbed to $24,287 in August, an increase of $721 compared to July and an increase of nearly $1,500 compared to June. Edmunds experts note that this unseasonal jump in used prices presents a unique opportunity for consumers with a trade-in who are looking to purchase a new car this holiday weekend because they could get up to thousands more for their vehicle. Edmunds analysts say that car shoppers should start their research process by getting an online offer for their vehicle now, and they caution that this increase in values might not last beyond the next month or so.
"This holiday weekend might be the best time to jump on buying a new car if you currently own a vehicle and want to take advantage of its greatly increased value," said Ivan Drury, Edmunds' senior manager of insights. "Come October and November, some of the lease extensions that consumers opted into at the start of the pandemic will expire, so more off-lease vehicles will be hitting the market. Bigger discounts on 2020 model year vehicles should create downward pressure on the used market, and depreciation for used vehicles typically accelerates during the fourth quarter, so used prices and values are likely going to drop."
For more automotive research and insights, visit the Edmunds Industry Center here: https://www.edmunds.com/industry/insights/.
Edmunds guides car shoppers online from research to purchase. With in-depth reviews of every new vehicle, shopping tips from an in-house team of experts, plus a wealth of consumer and automotive market insights, Edmunds helps millions of shoppers each month select, price and buy a car with confidence. Regarded as one of America's best workplaces by Fortune and Great Place to Work, Edmunds is based in Santa Monica, California, and has a satellite office in Detroit, Michigan. Follow us on Twitter, Facebook and Instagram.