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January New Light-Vehicle Sales Slide 1 Percent

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Article Highlights

  1. As one of the lowest-volume months for new U.S. light-vehicle sales, January is seldom the best barometer of how the year will pan out. But surging interest rates on auto loans and steadily rising vehicle prices make clear that automakers will be hard-pressed to produce sales gains in 2019. ... Kelley Blue Book said the industry's average transaction price rose 4.2 percent to $37,149. Combined, those factors mean a big jump in the monthly payment for many consumers interested in trading up.
  2. "Our team was tracking fewer programs in the month, notably fewer at Ford Motor Co., which uncharacteristically held steady and offered fewer than normal regional programs," said Brad Korner, Cox Automotive's general manager of rates and incentives. Full-size pickups were an exception, Korner said, with liberal spending on incentives expected to continue as Ford's F-150 battles redesigned light-duty models from General Motors and Fiat Chrysler Automobiles' Ram brand that were introduced last year.
  3. Lease pull-ahead promotions were popular in January, Korner said. "The incentive business is experiencing a transition away from incentive promotion and toward a focus on monthly payments for both finance and lease deals," he said. "This is likely to combat the affordability issues and help consumers with budgeting for a new vehicle. As more digital retailing solutions are offered, dealers seem very focused on monthly payment."

Automotive News, Feb. 4, 2019 — As one of the lowest-volume months for new U.S. light-vehicle sales, January is seldom the best barometer of how the year will pan out. But surging interest rates on auto loans and steadily rising vehicle prices make clear that automakers will be hard-pressed to produce sales gains in 2019.

The average interest rate on new vehicles rose last month to 6.19 percent — the second highest in 10 years — from 4.99 percent a year ago, according to Edmunds. And Kelley Blue Book said the industry’s average transaction price rose 4.2 percent to $37,149. Combined, those factors mean a big jump in the monthly payment for many consumers interested in trading up.

That potential for sticker shock, along with extreme cold weather and uncertainty created by the 35-day partial federal government shutdown, helped push sales down 1 percent in January.

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