Last year, people in the US bought about 15.5 million cars. Cox Automotive, the company that owns Kelley Blue Book, says they’re on track to buy 16 million this year.
People in the US buy cars now that election season is over.
Charlie Chesbrough, senior economist at Cox Automotive, says that many people who wanted to buy a car stayed home during the stressful election season. “With the U.S. election behind us, we may see strong vehicle sales as the year comes to a close,” Consumer trust is rising because the market is less uncertain, which means more people are likely to want to buy a new car.
More affordable and easier to get credit
Chesbrough says that prices have gone down. It would now take the average worker 37.4 weeks to pay off a new car. This is the lowest number for this measure in more than three years.
Following two recent drops in the Federal Reserve’s key interest rate, lenders are also giving out more car loans at lower rates.
Some brands had too much stock.
Some companies have too many new cars to sell, but not all of them. That makes a lot of them offer deals. In October, incentives made up 7.7% of the average price of a new car. This was the biggest discount we’d seen since the COVID-19 pandemic caused problems in the supply chain that drove up the price of new cars.
At the end of October, the average car lot had 85 days’ worth of new cars to sell. That’s longer than the usual 60 days they try to keep.
That average, however, is made up of extremes. Seventeen names had more than 100 days, with Lincoln having the most at 168. Toyota TM 0.54% and its high-end Lexus brand had only 35.
There are usually some of the biggest sales of the year in December.
EV sales are expected to go up at the end of the year.
Electric cars might be the ones to get the biggest discounts this year.
Chesbrough noted, “We may see an increase in EV and plug-in hybrid sales over the next few months as buyers move to take advantage of discounts that may disappear in 2025. There is concern that federal tax credits for EVs and PHEVs may be reduced or eliminated when the new administration takes office. As a result, EV sales may experience some tailwinds, leading to robust activity through the end of the year.”
Even if the EV tax credit takes effect, the number of cars that qualify for the credit typically shrinks every Jan. 1 as rules prohibiting Chinese-derived parts grow stricter.
