Retail auto sales conditions brightened this week as the Federal Reserve lowered interest rates for the first time in four and a half years, vehicle inventory stabilized after the CDK Global DMS disruption, and 2025 models started arriving.

Though new-vehicle prices remain elevated in the wake of pandemic-induced inflation, they did lower slightly in August, while automakers granted higher incentives and consumer incomes grew, said Cox Automotive, which pointed out that Wednesday's interest rate cut of a half point may take a while to trickle down to auto loans.

Inventory totaled 2.8 million units at the end of August, according to Cox, a little above June levels seen before the dealer management system disruption later that month. That translated to a days’ supply of 77, also similar to early-June volume and easily eclipsing the under-60 level a year earlier.

About a quarter of the inventory is made up of 2025 vehicles, Cox said.

Though the average listing price for new vehicles is at $46,841, more than a third are listed for less than $46,000, according to Cox. Coupled with the average incentive package of 7.2% of the average transaction price, plus the interest rate cut, that could bring long-hesitant buyers to the market.

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