Forecasters expect U.S. auto sales in February to increase modestly, but only modestly – a percent increase of low single digits vs. February 2023, adjusting for the fact that February 2024 has an extra day, since it’s a Leap Year.
For example, analysts for S&P Global Mobility, and in a joint forecast from J.D. Power and GlobalData separately each predict a forecast for U.S. new-vehicle sales that rounds up to about 1.2 million cars and trucks, in February 2024.
S&P Global Mobility’s forecast is a little higher, an increase of about 2.9% vs. a year ago, based on the daily selling rate. J.D. Power and GlobalData expect an increase of about 1.4%.
Big-picture factors that affect new-car sales are in a rough balance, analysts said.
On the plus side, new-vehicle production is on the increase, and consumer demand is still strong among new-car buyers, who by and large have good credit scores. Not only that, incentives are making a small comeback, dealers are shaving their profit margins, and auto loans are shrinking.
Consumers have more selection at dealerships, and slightly more bargaining power.
The No. 1 negative is continuing high interest rates on auto loans – high enough to keep monthly payments at or near record levels. That’s true even though borrowers are borrowing slightly less than they did when new vehicles were in critically short supply, due to supply-chain issues, up until last year.
Those high monthly payments are keeping many would-be buyers on the sidelines, especially those with subprime credit scores.
According to J.D. Power and GlobalData, retail, new-vehicle inventory at the end of February is an estimated 1.7 million units. That’s up 3.6% vs. January 2024, and up a much more substantial 44.7% vs. February 2023.
The average, new-vehicle transaction price for February is an estimated $44,045, down $1,919 or 4.2% vs. February 2023, the firms said in the joint forecast.
Nevertheless, they expect the average, new-vehicle monthly payment in February to remain flat vs. February 2023, at $722.
For the year, S&P Global Mobility said it expects U.S. new-vehicle sales of 15.9 million units, up just 3% vs. 2023.
