Vehicle inventories are growing, but shoppers may still experience supply constraints and record prices.

The average new-vehicle price now sits at about $46,000, a $10,000 increase over 2019.

The National Auto Dealers Association reports that the industry sold 13.7 million new cars and trucks last year, the lowest number of total sales since 2011.

The association blames the reduced totals on the semiconductor microchip shortage and supply-chain disruptions.

Inventory levels rose 49% by the end of 2022 compared to year’s end in 2021. The shift has NADA projecting the industry will sell 14.6 million new vehicles in 2022, a 6.6% increase. Though better, that number falls short of the 17.1 million sold in 2019.

Auto dealerships struggled in 2022 to keep their lots full. They sold into the pipeline, meaning vehicles were sold before they arrived. Now inventories are better, but challenges remain. 

NADA Chief Economist Patrick Manzi says inventories for some brands are in better shape than others. But he warns that shoppers will have limited options if they don’t order from the factory. Automakers, he says, have said they will not overproduce vehicles. The days of packed lots with many choices may be behind the industry.

Rising interest rates add to car customers’ concerns. When added to higher vehicle prices and supply issues, that may also make shopping for a vehicle more difficult.

According to NADA, interest rates average 6.4% for loans on new cars and 9.7% for loans on used vehicles. Manzi said he expects rates to go up in the first half of the year.

In 2022, automakers focused their limited resources on producing more profitable, higher trim-level vehicles. Manzi predicts they will shift production back to more affordable models this year.

Automaker incentives remain down. Incentives have steadily declined from the over $4,000 per vehicle offered in 2020. But Manzi predicts a rise in the incentives, which sat at about $1,000 per vehicle in 2022, if inventory grows in the back half of the year.