- Memorial Day dealer sales appear ready to offer customers more than usual.
- Excess stock of 2023 model-year vehicles is playing a large role in some of the discounts.
- Dealers have as many or more vehicles from the outgoing model year on their lots as they did before the pandemic.
The automotive market may never look exactly the same as it did in early 2019. Prices went sky-high starting in 2020 and only recently started looking more normal. Now, it seems as though dealers are ready to deal again as 2023 model-year inventory languishes on lots across the nation. According to one research firm, that’s going to add up to big discounts this Memorial Day weekend.
In May of 2019, approximately 6.7 percent of the cars on dealer lots were from the outgoing model year (2018). By 2022 that figure plummeted to just 3.7 percent. Since then, it’s begun to climb back up but only now have we seen it crest above May 2019 levels.
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According to Edmunds, 6.8 percent of the cars on dealer lots right now are from the 2023 model year. In fact, they command, on average, a $4,147 discount off of MSRP. That’s up from an average discount of just $1,919 for a 2022 model a year ago.
“Supply chain disruptions and limited inventory left little to be excited about in summer holiday car shopping the past few years, but discounts on outgoing model year vehicles this Memorial Day weekend are a bright spot for consumers in an otherwise challenging market,” said Jessica Caldwell, Edmunds’ head of insights.
“For dealers and automakers, the trend serves as a moment of caution surrounding the old habits of overproduction and inventory glut. It’s also a reminder that the expensive vehicles now being discounted were strong sellers one to two years ago, showing just how significant high interest rates are in today’s market,” she continued.
Brands To Watch
Edmunds also went to the trouble of compiling valuable data for most major brands. It shows that the big three all have significant discounts above the average and that all three are sitting on inventory. Dodge evidently has more 2023 model-year vehicles on lots than it does 2024 models. Data suggests that it’s discounting those models by $6,753 on average.
Average Discounts By Brand
Chrysler and Jeep are also offering over $6,000 off MSRP on average. Almost 40 percent of the vehicles on Chrysler lots are from the 2023 model year says the report. Jeep, on the other hand, has just 8.5 percent of its older inventory to move. Volkswagen, Volvo, and Infiniti are all offering over $5,000 in discounts on average as well.
Notably, it’s not just 2023 model-year vehicles that will see discounts this weekend. Edmunds says that, on average, 2024 model-year cars are discounted by $1,741. The big key is to be willing to shop around and then to ensure you haggle based on your budget without budging.
Automakers said for a while during the pandemic that they would not go back to building too many cars. For now, it seems that some of them have gone back on that and good deals are available as a result.