A U.S. new-vehicle sales forecast for October brings good business news despite a small bump in monthly consumer payments affecting affordability.
The J.D. Power analysis predicts a 6% year-over-year retail sales increase when adjusted for two additional selling days, and the total seasonally adjusted annualized rate at 16.1 million units, up about 600,000 units year-over-year.
Vehicle price declines and incentives are helping consumers afford new models despite an erosion of trade-in equity due to declining used-vehicle prices, J.D. Power said.
The average retail transaction price is about $44,900, down 1.6% year-over-year, as average incentives per vehicle are up an expected 71%, or 6.3% of MSRP, up about 3%, J.D Power said. Average monthly auto loan payments are projected at $738, up about 2%, though the average interest rate is forecast to be down 68 basis points to 6.7%.
Inventory is still on the rise, up 4% month-over-month and a sharp 25% year-over-year to 1.9 million units, according to J.D. Power, which said supply is still spotty depending on the brand and model, with some high-volume sellers still scarcer.
Though sales are up, retailer profit is obviously down from the pandemic heights. The forecast puts retailer profit per unit at $2,245, down 27% year-over-year as just about 13% of new vehicles are selling above manufacturer’s suggested retail price.
