Dealers should be cautious about boosting inventory in preparation for next year’s tax-refund season, Cox Automotive’s chief economist says. The increase in car buying typically fueled by tax refunds may fail to materialize.
The 2017 tax-law changes are likely to reduce the number of shoppers with refunds and the size of those refunds next year, Cox Automotive’s Jonathan Smoke told Automotive News last week here.
“Tax-refund season could be a disaster this year,” Smoke said. “The data suggests that people have been underwithholding.”
Taking a wait-and-see approach could help dealers manage any decline in sales tied to lower tax refunds, he said.