Cox Automotive Inc. reposted this
Q4 could be the biggest yet for car dealers: But it’ll come down to one thing – vehicle incentives. I recently spoke to Jonathan Smoke, Chief Economist at Cox Automotive Inc., who shares his market outlook, and why he thinks a new tidal wave of demand is right around the corner. Top lessons learned from Jonathan: Local markets vs. national markets. — National data can mislead dealers when it comes to pushing the right offers in their market. — So, focusing on local markets and the immediate needs of those customers is vital. — Optimizing for local buyers also helps dealers compete with bigger groups. Car pricing trends. — Discounts now take off an average of 3% off MSRP. — New car prices have come down only 1% since last year, according to the Consumer Price Index. — But MSRPs have gone up in the same timeframe, and discounts are plateauing. Future sales forecasts. — Cox Auto predicts a strong Q4 will help the annual sales rate hit 15.7M by year’s end. — But this hinges on manufacturers using more incentives in the coming months. — Interest rate cuts will take time to make an impact but are expected to contribute up to a 10% increase in sales. The outlook for subprime buyers. — Mid to low-income earners suffered the most from high inflation. — Even though inflation is declining, increases in credit debt and interest rates are still taking a toll on finances. — Auto loan rates are due to come down 1% by tax refund season 2025. Election uncertainty. — Election season has suppressed demand for over a year but should subside after Nov. — The winner could reshape EVs and tariffs, but change will be slow. — If Trump wins, expect an EV sales surge before tax credits end. The full episode is live! Stream it now — YouTube: https://lnkd.in/etVzahtU Apple: https://lnkd.in/ee6THwXZ Spotify: https://lnkd.in/eX48KDwD