Summer of 2018 - It is a Seller's Market for SUVs

I have been in the market for a baby mover SUV for months now and been tracking the market closely. It is definitely a seller’s market now and it has been that way for at least a few months for the SUVs. Dealers are not motivated to move cars (at least not like they were the year before) and for the most part cars don’t spend a long time on the lot. No sizable dealer discounts or manufacturer incentives to be found for mainstream make and model SUVs.

I believe it is because the auto manufacturers had not seen this sustained demand to last as long as it has now. I was watching the autoline network the other day and they talked about this very phenomenon. Apparently the manufacturers had forecast the demand to drop as more lease return cars hit the second hand market and in turn the more attractive second hand market curbing the demand for new cars. Looking at the new car sales numbers for the industry as a whole though, it looks like we did not hit this expected dip in the cyclicity of demand. However, the manufacturers had already cut production and now the inventories are getting thin and most companies are beating their sales/revenue guidance without much effort. Considering the lead times it will probably take months for supply to adjust to this unexpected level of demand so in the meantime good luck to all those out there shopping for a new SUV lease…

Last year, many of the automakers overproduced. This year, I’m seeing manufacturers under-producing. Specifically, Bmw.

BMW has definitely under-produced, but so have the other Germans. Unlikely we see big discounts on outgoing X5’s this year.

Often it can pay to be a contrarian. Unless you actually need a third row, the value is really in sedans. That’s the place approaching a buyers’ market.


There’s no support on the X5 right now even base X5’s are leasing like garbage