As Prices Climb, Auto Sales Fall
March 26, 2019
New cars are getting more expensive, and fewer of them are being sold, indicating that buyers at the lowered end are turning to cheaper used cars. Auto sales for the first quarter are projected to fall 2.5 percent from the same period last year to about 4 million units, according to J.D. Power. Even worse, retail sales directly to consumers, rather than sales to commercial businesses, are projected to fall about 5 percent to 2.9 million units. This is the first time in 6 years that first-quarter sales will be below 3 million units.
Some of this decline can be attributed to the high prices of new cars. The average price for a new car in the first quarter is expected to be $33,319. This is the highest price ever and $1,000 more than the average price in the first quarter of 2018. Faced with high prices, low-end buyers seem to be opting out of buying new cars. Retail sales for vehicles priced under $25,000 are expected to fall 12 percent in the first quarter.