Used-car demand outpaced the new-vehicle market in January, according to data compiled by CarGurus. Its Used Vehicle Demand Index rose over 7% year-over-year, which the automotive research and shopping website said was largely driven by buyers in the Southern and Western U.S. 

Used inventory levels also continued to rise, up by over 5% year-over-year. But the average used-vehicle price is still high at almost $28,000 in January, up nearly 2% from a year earlier. 

“Used sales demand came out roaring in January, with savvy car buyers taking advantage of a month that typically offers lower prices, higher inventory, and less shopper competition before the market heats up during the tax-season rush,” said CarGurus Director of Economic and Market Intelligence Kevin Roberts. 

“The key question now is whether this early surge signals sustained momentum. If this trend holds, it could set the tone for a competitive start to the spring selling season.”

The company's New Car Demand Index fell over 3% year-over-year as consumers faced high prices and winter storms and electric-vehicle demand weakened. New-vehicle inventory fell almost 3% in January, CarGurus speculating that automakers and dealers are focusing on balancing supply against demand and margins. The average new-vehicle list price was flat year-over-year.

Consumer confidence is at its lowest point since 2014, CarGurus reported, and consumer sentiment is down more than 20% year-over-year. It says that could be because auto loan rates haven’t budged substantially despite Federal Reserve rate cuts. Longer-term treasury yields, which more directly influence auto loan rates because auto loans are priced off of those broader interest rate benchmarks, have hardly moved compared to short-term rates.