Car Dealers Are DROWNING in Inventory: Market Update 2026 | Episode 995
About this episode
Car dealers are facing a significant inventory crisis as new vehicle sales are projected to decline in 2026. The episode discusses insights from Cox Automotive, highlighting a shift towards a buyer's market, particularly for affluent consumers. The hosts debate the impact of inventory levels on sales strategies, with Ford showing growth in entry-level models while other manufacturers struggle. The conversation also touches on the importance of pre-purchase inspections and the contrasting fortunes of brands like Nissan and General Motors in navigating this challenging market landscape.
fleet sales
"...fleet sales have been kind of the buoy for auto manufacturers and it seems like maybe they've tapped into that a little bit too much. So you've got fleet sales expected to fall 6%..."
Fleet sales are when companies or government organizations buy many cars at once instead of just one at a time. This can help car manufacturers sell more vehicles quickly.
Fleet sales refer to the sale of multiple vehicles to a single customer, typically businesses or government agencies, rather than individual retail customers. These sales often involve bulk purchases and can significantly impact a manufacturer's overall sales figures.
Stellantis
"...to take any more of the stagnant, stellantis and Nissan product off of those manufacturers' hands."
Stellantis is a big car company that makes many different brands of cars, like Jeep and Chrysler. It was created when two car companies joined together.
Stellantis is a multinational automotive manufacturing corporation formed from the merger of Fiat Chrysler Automobiles and PSA Group. It includes brands like Jeep, Chrysler, Dodge, Peugeot, and Citroën among others.
retail sales
"Now, dad, the expectation for retail used vehicle sales, you see it there as well, is year over year decline in retail sales as expected..."
Retail sales are when regular people buy cars from dealerships instead of businesses buying many cars at once. It's how most people get their cars.
Retail sales refer to the sale of vehicles directly to consumers, as opposed to wholesale or fleet sales. This is where individual buyers purchase cars from dealerships.
affordability pressure
"...as expected as to your point, affordability pressure sustains demand for lower priced vehicles."
Affordability pressure is when people find it hard to buy cars because they are too expensive. This makes them look for cheaper cars instead.
Affordability pressure refers to the financial strain consumers face when trying to purchase vehicles, often due to rising prices, interest rates, or economic conditions. This pressure can lead to a shift in demand towards more affordable options.
hybrid sales
"So again, record hybrid sales, entry-level trim growth,"
Hybrid sales are about cars that use both gasoline and electricity to run, which helps save fuel and reduce pollution.
Hybrid sales refer to the sales of vehicles that use both a traditional internal combustion engine and an electric motor, providing better fuel efficiency and lower emissions.
Ford Maverick
"...on the Maverick Ranger and Bronco Sport rose 41% in the fourth quarter. The Maverick in particular had a strong year..."
The Ford Maverick is a small truck that is easy to drive and park, making it a good choice for people who want a truck without the bulk. It was first sold in 2021 and is known for being budget-friendly.
The Ford Maverick is a compact pickup truck that was introduced in 2021, designed to offer a versatile and efficient option for consumers looking for a smaller truck. It has gained popularity for its affordability and practicality.
Ford Ranger
"...ed sales of the entry-level trims on the Maverick Ranger and Bronco Sport rose 41% in the fourth quarter."
Ford Bronco Sport
"...on the Maverick Ranger and Bronco Sport rose 41% in the fourth quarter..."
The Ford Bronco Sport is a smaller SUV designed for people who like outdoor activities and off-roading. It looks tough and can handle rough terrain.
The Ford Bronco Sport is a compact SUV that emphasizes off-road capability and rugged styling, appealing to adventure seekers. It is part of the Bronco family, which has a storied history in off-road vehicles.
Ford Escape
"...but I also know that Ford dropped the escape."
The Ford Escape is a small SUV that many people use for everyday driving and family needs.
The Ford Escape is a compact SUV that has been popular for its versatility and practicality in urban settings.
Ford F150 Lightning
"Well, they also got rid of the F-150 Lightning. So, you can look at just one side of the equation here, but I actually give a lot of credit to Ford."
The Ford F-150 Lightning is an electric version of the popular Ford F-150 truck. It's designed to be environmentally friendly while still being useful for work and everyday tasks.
The Ford F-150 Lightning is an all-electric version of Ford's best-selling F-150 pickup truck, designed to offer the same utility with zero emissions.
prior model year inventory
"as these dealers try and sell down prior model year inventory."
Prior model year inventory means cars that were made in earlier years but haven't been sold yet. Dealers often try to sell these older models at lower prices to clear out space for new cars.
Prior model year inventory refers to unsold vehicles from previous production years that dealerships still have in stock. These vehicles are often sold at discounted prices to make room for new models.
2024 models
"if they are interested in those remaining new 2024 and 2025 models to be able to get some sizable discounts."
2024 models are new cars that are made for the year 2024. They often have the newest styles and technology.
2024 models refer to vehicles that are designated as new for the 2024 model year, which typically includes the latest features, designs, and technologies from manufacturers.
2025 models
"if they are interested in those remaining new 2024 and 2025 models to be able to get some sizable discounts."
2025 models are cars that will be made for the year 2025. They will have new features and styles compared to older models.
2025 models refer to vehicles that are designated as new for the 2025 model year, which will include updated features and designs compared to previous years.
incentives
"Will there be incentives? I'm pretty sure."
Incentives are discounts or special deals that car companies offer to help sell their cars. They can make buying a car cheaper or easier.
Incentives are promotional offers provided by manufacturers or dealers to encourage consumers to purchase vehicles. These can include cash rebates, low-interest financing, or special lease offers.
Nissan Rogue
"You can see here, Dad, Nissan's best-selling model was the Rogue or is the Rogue, yet sales fell 11% year over year."
The Nissan Rogue is a small SUV that many people like because it has a lot of room inside and is safe to drive. It's a good option for families or anyone needing extra space.
The Nissan Rogue is a compact crossover SUV that has been a popular choice for families due to its spacious interior and advanced safety features. It typically competes with other compact SUVs in the market.
Toyota Rav4
"...ll 11% year over year. Now, at the same time, the RAV4 and the CRV both posted strong gains."
The Toyota RAV4 is a type of vehicle called an SUV, which stands for Sport Utility Vehicle. It's known for being practical and comfortable, making it a great choice for families or anyone who needs extra space for passengers and cargo.
The Toyota RAV4 is a compact SUV that has gained popularity for its reliability, spacious interior, and fuel efficiency. It is often discussed in the context of the competitive SUV market, particularly against rivals like the Honda CR-V, as both models frequently see strong sales figures.
compact crossover SUV
"...The Nissan Rogue is a compact crossover SUV known for its spacious interior..."
A compact crossover SUV is a type of vehicle that is bigger than a regular car but smaller than a full-size SUV. They are great for families because they have more room and are easier to drive.
A compact crossover SUV is a vehicle that combines the features of a car and an SUV, offering a higher driving position and more cargo space than a traditional sedan. They are popular for their versatility and comfort.
MSRP
"...the MSRP is $43,650, the dealer's advertising it..."
MSRP is the price that the car maker suggests the dealer should sell the car for. It's like a guideline for how much the car should cost.
MSRP stands for Manufacturer's Suggested Retail Price, which is the price that the manufacturer recommends a dealer sell the vehicle for. It's a starting point for negotiations when buying a car.
dealer advertising price
"...the dealer's advertising it for $35,150."
The dealer advertising price is how much the dealership is saying the car costs. Sometimes it's lower than the price suggested by the car maker.
The dealer advertising price is the amount that a dealership is promoting for a vehicle, which can be lower than the MSRP. This price can vary based on market demand and dealership strategies.
out-the-door price
"let's see what the actual out-the-door price is from this dealership."
The out-the-door price is the final amount you pay for a car, including taxes and fees. It tells you exactly how much money you'll need to spend to drive the car home.
The out-the-door price is the total amount a buyer pays for a vehicle, including all taxes, fees, and additional costs. It's important to know this figure to avoid unexpected expenses when purchasing a car.
invoice price
"Let's go back and just peek really quickly. What was the invoice price on this? $41,290."
The invoice price is what the car dealer pays to get the car from the manufacturer. Knowing this can help you negotiate a better price when buying a car.
The invoice price is the amount a dealer pays to the manufacturer for a vehicle. It is often used as a baseline for negotiations between the buyer and the dealer.
General Motors
"about General Motors, Dad, oh, it's down here, dealership inventory,"
General Motors is a big car company that makes many different types of vehicles, including trucks and SUVs.
General Motors, commonly known as GM, is one of the largest automobile manufacturers in the world, producing a wide range of vehicles under various brands such as Chevrolet, GMC, Cadillac, and Buick.
dealership inventory
"oh, it's down here, dealership inventory, which includes vehicles in transit"
Dealership inventory is the number of cars that a car dealership has ready to sell. It includes cars that are already on the lot and those that are on their way to the dealership.
Dealership inventory refers to the total number of vehicles that a dealership has available for sale, including those in transit to the dealership. Managing this inventory is crucial for dealerships to meet customer demand and maximize sales.
vehicles in transit
"which includes vehicles in transit that climb 19% year over year"
Vehicles in transit are cars that are on their way to a dealership but haven't arrived yet. They are part of the dealership's total inventory.
Vehicles in transit are cars that have been ordered by a dealership but have not yet arrived at the dealership. This term is important for understanding how dealership inventory levels fluctuate based on deliveries.
year over year
"that climb 19% year over year to 486,000 at the end of December."
Year over year means comparing something from this year to the same time last year to see if it has grown or shrunk.
Year over year (YoY) is a financial term used to compare a statistic or metric from one year to the same period in the previous year. It's often used to assess growth or decline in sales, inventory, or other metrics.
tighter inventory
"So GM is trying to follow the Toyota Playbook a little bit, tighter inventory, increasing the sales obviously."
Tighter inventory means having fewer cars available for sale, which can make them seem more desirable and help the dealership sell them faster.
Tighter inventory refers to a strategy where a company keeps fewer vehicles in stock to create a sense of scarcity, potentially increasing demand and sales. This approach can help manage costs and improve profitability.
dealer fees
"...on what happens with this Nissan dealership advertising a vehicle $9,000 below MSRP. We'll see what it actually is."
Dealer fees are extra costs that a dealership might charge when you buy a car. These can include things like paperwork or preparation fees, and they can add up quickly.
Dealer fees are additional charges that a dealership may add to the price of a vehicle, which can include documentation fees, preparation fees, and other administrative costs. These fees can significantly affect the final price you pay for a car.
Request an Explanation
Heard something you'd like explained? We'll add it to this episode.
Sign in to request explanations for terms you heard.
Want to learn more?
Browse our glossary for plain-English explanations of automotive terms, jargon, and concepts.
Help improve this episode
See something that's not quite right? Our annotations are AI-generated and can sometimes miss the mark. Click the flag icon on any annotation to suggest a correction.