New vehicle sales in the United States fell slightly in the third quarter of 2022, despite some automakers reporting improvements in September.
However, there are warning signs that consumer appetite for expensive cars and trucks may be waning.
The Edmunds.com website, which specializes in automotive information, indicated Monday that sales declined 0.9% from July to September, with most automakers reporting declines. General Motors was a notable exception, which posted strong growth.
Several companies, including GM, reported increased sales in September after shortages of computer chips and other parts and factories were able to churn more due to increased supply of vehicles. But some analysts said any monthly gains could be short-lived due to higher prices and rising interest rates.
“With interest rates rising, affordability is being tested,” said Jack Creeley, industry analyst at auto pricing website TrueCar. “We are seeing consumers facing the reality that in order to pay for the same vehicle with the same monthly payment as last year, they are forced to increase their down payment, which is creating affordability challenges. Is.”
New cars cost an average of $45,622, the fourth-highest monthly price on record last month, according to consumer research and analytics company JD Power. In addition, auto loan interest rates jumped to 5.7% between July and September, up from 4.3% a year earlier, and with payment terms averaging over 70 months, Edmonds said.
Even with the high resale value, interest rates are making monthly payments prohibitively high, said Evan Drury, director of outlook for Edmunds.com, noting that if unemployment begins to rise, car sales will begin to decline. can.
“The potential pool of customers who are cash-rich or don’t care what they pay is going to shrink rapidly once these other factors come into play,” he warned.
