May new-vehicle sales are projected to be up 20% year-over-year due to healthy inventories and continued strong fleet sales, though volume fell 1% from April, Cox Automotive reports.

Sales spiked to 1.35 million units, Cox said.

Inventory stood at a two-year high heading into the month at nearly 2 million units, up almost 70% from a year earlier, it said.

Scarce supply drove lower sales last year, but this year demand is the market driver, despite high interest rates and still-high vehicle prices, Cox said. Typical monthly payments for new models still eclipse $700.

“Vehicle shoppers now have a much better chance of finding something that fits their needs. Pent-up demand, held back by limited product availability last year, is now being fulfilled as inventory levels improve around the country,” said Cox Senior Economist Charlie Chesbrough in the sales report.

The seasonally adjusted sales pace, or SAAR, is forecasted at 14.9 million, down from April’s 15.9 million.

Cox expects sales to slow in the second half of the year due to larger economic forces, though it says increased incentives and increased fleet sales volume will continue to balance those forces.

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