With less uncertainty in the market, consumer confidence is increasing, which will likely increase willingness to buy a new vehicle.
New-vehicle sales for November are expected to maintain a steady seasonally adjusted annual rate (SAAR) of 16 million, consistent with the sales pace observed in October, according to a Cox Automotive forecast released Nov. 26. This represents an increase from last November’s SAAR of 15.5 million.
However, the sales volume is expected to reach 1.32 million, a decline of 1.3% from October but a 6.6% increase from one year ago. This reflects the differences in the number of selling days compared to last month and a year ago. There are 26 selling days this month, one less than last month and one more than last year.
“With the U.S. election now in the rearview mirror, we may see vehicle sales finish the year in a strong position,” said Charlie Chesbrough, senior economist at Cox Automotive, in a news release. “With less uncertainty in the market, consumer confidence is moving up, which will likely increase willingness to buy a new vehicle. Additionally, vehicle affordability is improving, thanks to higher incentives and falling auto loan rates, which increase consumers’ ability to buy.”
Sales Pace Reflects Higher Inventory Levels, Incentives
New vehicle inventory volume topped 3 million units at the start of November for the first time since the pandemic, which is higher by more than 677,000 units compared to one year ago. Days’ supply climbed to 85 at the start of November, up two days from the revised start of October count and 10 days higher than in November 2023. Higher inventory levels also push sales incentives higher, with new-vehicle sales incentives jumping to 7.7% of the average transaction price in October, marking the fifth consecutive month of higher incentives and the highest level since April 2021.
EV Sales Expected to Surge Through End of Year
The election has sparked much speculation about the potential effects of a new administration on the auto market, particularly concerning electric vehicles and emissions standards. But the latest numbers show electric vehicles on track for a record closeout in sales for 2024.
“We may see an increase in electric vehicle (EV) and plug-in hybrid (PHEV) sales over the next few months as buyers move to take advantage of discounts that may disappear in 2025,” Chesbrough noted. “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.”
