ARLINGTON, Va.—Total vehicle sales increased for the second straight month in October, but sales of new vehicles are expected to trend down gradually due to multiple speed bumps.
Those speed bumps include rising interest rates, higher average transaction costs and reduced incentives from manufacturers, according to NAFCU Research Assistant Yun Cohen in a NAFCU Macro Data Flash report.
Car sales rose from 5.4 million to 5.7 million annualized units during October; sales of light trucks decreased from 12 million to 11.8 million annualized units. Monthly sales levels were down 2.6% from a year ago, mostly due to weather-related disruptions.
"Hurricane Michael delayed sales in the Florida Panhandle and Southwest Georgia during the month," Cohen noted. "Conversely, last October's sales were boosted by replacement demand associated with Hurricanes Harvey and Irma."
Results among the largest automakers were mixed. Nissan reported a year-over-year sales decline of 10.6% in October, followed by Honda (-4.1%) and Ford (-3.9%). Fiat Chrysler Automobiles sales were 15.7% higher than a year ago, followed by Toyota (+1.4%). The gains were in part due to one more selling day compared to last October. General Motors' monthly sales figures are not available, Cohen said.
"According to Edmunds, the annual percentage rate on new financed vehicles averaged 6.2% in October, the highest since January 2009," Cohen added. "There are also signs that buyers are increasingly drawn to the used-car market for more affordable alternatives."