📊 December 5: Dealer Reports, Recall Roundup, and Most Reliable Cars

The Gist

ZeroSum's latest report shows inventory is booming, but sales are dragging, leaving dealers to navigate tighter margins and a fiercely competitive market.

Leasing is back on the rise with EVs in the driver’s seat, while subprime lending hits the brakes, making room for cash buyers and Prime+ borrowers.

As sales nosedive, Infiniti’s scrambling to survive by cozying up to Nissan in a bid to stop dealer losses from spiraling out of control.

Subaru’s back on top, hybrids shine, and EVs are still working out the kinks—Consumer Reports reveals the best (and worst) bets for buyers.

Lastly, from fuel leaks to loose tailgates, automakers like Honda, GM, Hyundai, and Mercedes-Benz are keeping service bays busy with fresh recalls.

Fuel for Thought

• 📊 December State of the Dealer Report

• 💰 State of the Auto Finance Market

• 😓 Infiniti’s Sales Woes

• 📝 Consumer Reports’ Reliability Survey

• ⏪ Recall Round-Up

  • Honda

  • General Motors

  • Hyundai

  • Mercedes-Benz

BUSINESS

📊 December State of the Dealer Report

ZeroSum’s December State of the Dealer Report signals tougher times ahead for automotive dealers, with inventory growth outpacing demand and increasing pressure to compete in a challenging marketplace.

• New Stock — Inventory has surged by 80-100K units for the third consecutive month, hitting 3.23M units, just shy of pre-pandemic levels of 3.4-3.5M. Despite this, turn rates have stagnated at 35-38% for six months, while days-to-move have exceeded 70 for the second consecutive month, signaling sluggish sales.

• Used and Certified Stock — The growing supply of new cars is creating pricing gravity in the used and certified markets, increasing competition for sales and further pressuring inventory movement.

• Average Price of New Cars — Marketed prices for new vehicles remain flat year-over-year, though $1,700 lower than 2023’s levels. However, the increase in inventory has made pricing strategies more competitive, forcing dealers to find ways to stand out.

• Average Price of Used Cars — With increased competition for used inventory, pricing remains under pressure. Certified segments have particularly felt the squeeze, as dealers grapple with balancing reconditioning costs and maintaining profitability.

💰 State of the Auto Finance Market

Experian also released their State of the Automotive Finance Market report revealing shifts in consumer behavior and market dynamics, with leasing gaining traction while subprime financing hits record lows.

• Leasing Growth — Leasing interest continues to rise, driven by Super Prime and Prime+ consumers, with over 31% of Prime+ buyers opting to lease. SUVs and EVs dominate the leasing landscape, with EV leases now accounting for over 17% of the segment.

• Loan Shifts — New loan amounts and payments increased slightly, while rates and terms saw modest decreases year-over-year. For used vehicles, loan amounts and payments declined despite rising interest rates.

• Higher Cash Purchases — Cash purchases remain above historical averages, reflecting a more cautious consumer approach in a high-rate environment.

• Subprime Declines — Subprime lending continues to fade into the background, making up less than 16.7% of all auto loans. As more consumers shift toward Prime+ tiers, this trend highlights the ongoing tightening of credit standards and the growing dominance of financially healthier buyers in the market.

😓 Infiniti’s Sales Woes

Infiniti is hitting the brakes hard as sales plummet and dealer losses mount, forcing the brand to bunk up with Nissan in some markets. The plan aims to keep the lights on, but it’s not without challenges.

• The Numbers Don’t Lie — U.S. sales have fallen 45% in the past decade, dropping from 116,455 units in 2013 to just 64,699 in 2023. Dealers are averaging 24 cars a month, making standalone stores increasingly unsustainable.

• Co-Branding Experiment — Infiniti is allowing some dealerships to co-locate with Nissan in competitive markets to retain representation. But this isn’t a free-for-all—shared spaces require separate entrances, showrooms, and lounges, as well as distinct sales and service teams to maintain Infiniti’s premium identity.

• Dealer Profits Dive — Dealers are reporting significant losses, with some expecting to lose $600,000-$900,000 this year and others facing hits of $2M or more. Even with the co-branding strategy, Infiniti’s aging lineup and waning consumer interest remain significant hurdles.

 📝 Consumer Reports’ Reliability Survey

Subaru is back on top, claiming the number one spot in Consumer Reports’ annual brand report card for the second time in four years.

The brand also topped the 2025 reliability rankings, reinforcing its reputation for consistency and quality.

• Why Subaru Dominates — Jake Fisher of Consumer Reports credits Subaru’s success to a steady, long-term strategy with incremental changes to already strong products. Automakers that overhaul platforms and powertrains too often, Fisher notes, tend to face reliability issues.

• Top Contenders — BMW, the leader in 2023 and 2024, missed first place by just one point. Other top 10 brands include Lexus, Porsche, Honda, Audi, Kia, Hyundai, Toyota, and Infiniti, showcasing strong performance from a mix of luxury and mass-market players.

• Big Three Struggles — Domestic brands continued to face challenges, with Chrysler making the biggest gain, rising eight spots to 16th—the best among the Detroit Three. Meanwhile, Buick dropped to 17th, Ford fell to 19th, Cadillac slid to 21st, Lincoln hit 24th, and Chevrolet landed at 25th. Jeep came in last for the second consecutive year due to low reliability and poor road-test scores.

Hybrid powertrains continue to lead the pack in reliability, while EVs and plug-in hybrid vehicles (PHEVs) are improving but still lagging behind traditional gas-powered vehicles.

• Hybrids Lead the Way — Reliable models like the Toyota Corolla Hybrid and Kia Sorento Hybrid rival gas-powered vehicles, but problematic options like the Ford F-150 Hybrid lag behind.

• PHEVs and EVs Lag — PHEVs have 70% more problems than gas vehicles, while EVs face 42% more issues, with trouble spots including batteries and electronics.

• Caution on New Models — First-year models like the Cadillac Lyriq and Mazda CX-90 PHEV often struggle with reliability, making tried-and-true models a safer bet.

⏪ Recall Round-Up

Honda

Honda is recalling 205,760 SUVs due to a fuel filler neck tube issue that could cause fuel leaks.

Affected Models: Passport and Pilot vehicles from model years 2023-2025

General Motors

General Motors is recalling 132,037 trucks (again) over tailgates that may unlatch unexpectedly. Water intrusion into the electronic release switch is the culprit.

Affected Models: 2024 Chevrolet Silverado HD 2500/3500 and 2024 GMC Sierra HD 2500/3500 vehicles equipped with power-unlatching tailgates.

Hyundai

Hyundai is recalling 226,118 Santa Fe and Elantra models due to a rearview camera failure caused by damaged circuit boards. This issue violates Federal Motor Vehicle Safety Standards for rear visibility and increases crash risk.

Affected Models: 2021-2022 Santa Fe, 2021-2022 Santa Fe HEV, 2021-2022 Elantra, 2021-2022 Elantra HEV, 2022 Elantra N, 2022 Santa Fe PHEV

Mercedes-Benz

Mercedes-Benz is recalling 33,456 vehicles due to sunroof panels that may detach, posing a road hazard and raising crash risks.

Affected Models: 2001-2011 C-Class, 2001-2011 CLK, 2001-2011 E-Class, 2001-2011 CLS

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