Market Update: Coronavirus and Cars


2021 Vehicles
(December 3, 2020) An all-new 2021 Nissan Rogue in Scarlet Ember Tincoat is the 14 millionth vehicle to roll off the line at Nissan Smyrna Vehicle Assembly Plant. Credit: Nissan.

It's hard to believe we are three weeks away from Christmas! In terms of the car market, itís traditionally one of the best times of the year to buy a new vehicle as automakers try to hit their end of year sales goals. This year, of course, has been no ordinary year due to the pandemic that continues across the globe. Itís been a tumultuous time for automakers who were forced to close their manufacturing facilities for weeks and even months earlier this year to combat the spread of COVID. Production has since resumed and just this week Nissan celebrated a milestone at its Smyrna Vehicle Assembly Plant in Tennessee when the plant's 14 millionth vehicle rolled off the line. The vehicle taking the honors was an all-new Nissan Rogue that went on sale this fall.

In a year that's been anything but predictable, weíve seen inventory shortages, fantastic used car prices, incredible zero percent financing and deferred payment relief for consumers, all due to or as a result of COVID-19. Itís also changed the way many people shop for vehicles and the way dealerships operate. CarProUSA Certified dealers have also been outstanding in their efforts to continue to be accessible with their car buying services in these times, whether itís perfecting the online buying process or maintaining strict safety protocols in the showroom to keep you and their employees safe, in accordance with CDC safety guidelines.

For the shopper looking to buy, youíve encountered a buyer-friendly market this year, minus the inventory shortages on popular vehicles. Youíve probably found some pretty great deals thanks to amazing incentives on new vehicles designed to keep buyers, well, buying, during a global pandemic. It also led to a sky-high used car market over the summer, great if you had a trade-in. Letís not forget that accidents and auto breakdowns still happen and transportation needs change even during a pandemic, so drivers may have found themselves in need of new wheels this year for multiple reasons.

End of Year Outlook

As we head into the final weeks of the year, Car Pro Show host Jerry Reynolds says the outlook for the rest of the year is good as new vehicle inventories continue to rise, which is sure to cause a rise in incentives just in time for the end of year sales. If you are seeking a very specific vehicle, he says it's best to shop earlier in December. The typical yearend run will deplete inventories, especially on upper line trucks and all SUVs. Incentive spending from all automakers was down in October 2020 versus October 2019, a sign that automakers pulled back on incentives in October to throw bigger incentives into the market for the last two months of this year. This is something Reynolds' predicted on the air would happen and it appears it came to pass. For the latest end of year information and car shopping guidance tune into the Car Pro Show each Saturday in December.

Used Car Prices

When it comes to used car prices, the sky-high used car market we saw this summer is dropping. But as Reynoldsí has said on the Car Pro Show, even though they arenít as high, the used car market is still strong. However, he does recommend making a move now if you have trade in, instead of waiting until the end of December, especially if you have a lease.

Inventories

Reynolds also says new car inventories continue to climb on dealer lots after shortages due to shutdowns earlier this year. Thatís something mirrored by Cox Automotiveís most recent report. While inventory is down nearly a million units from this time last year, itís up from October. Good news for end of year shoppers looking for more choices than they might have had this summer.

New Car Inventory Levels

  • 3.39 million new car units Nov 2019*
  • 2.67 million new car units Nov 2020*
  • 2.54 million new car units Oct 2020*
(*Source: Cox Automotive):

Data from Cox Automotive published November 11 sheds some insight on which automakers have the lowest inventory levels presently. Across the industry, Lexus, Land Rover, Toyota, BMW and Mercedes-Benz have the lowest supplies of vehicles stretching from a 36 to 44 day supply. The report notes the industry average is currently 65 days. On the other end of the spectrum, Fiat, Buick, Genesis, Lincoln and Cadillac have the highest supplies.

  • Compact Utilities: The Kia Sorento was down to an 18 daysí supply. Toyota RAV4, the best-selling SUV in the U.S., had only 26 daysí supply.
  • Full-Size Pickups: The Chevrolet Silverado had a 47 daysí supply. The GMC Sierra 1500, 40 daysí. Toyota Tundraís inventory ranges from between 30 and 34 days.
  • Mid-size Pickups: Toyota Tacoma and Chevrolet Colorado both had 46 days supply.
  • Three-row SUVs: There are more Hyundai Palisadeís to go around than in August -- with a current 28í days supply up from 17 in August. But Kia Telluride inventory is worse off than in August with just an 18 daysí supply, down from 24 in August.

(Cox Automotive says its daysí supply is based on the daily sales rate for the most recent 30-day period that ended Nov. 2.)

Average Transaction Prices Creep Higher

As new model year 2021 vehicles rollout at levels close to where they were last year, the average cost of new vehicles continues to climb. Cox Automotiveís analysis of vAuto data reports the average listing price of $39,346. Thatís a new record and up 5% from a year ago. According to the analysis, the average listing price for non-luxury vehicles was $36,276 and for luxury it was $56,851. Many buyers are also making sizeable down payments. According to Edmunds, the average down payment for a new vehicle climbed to $4,457 in the third quarter of 2020, compared to $3,891 last quarter and $4,045 a year ago.

"It's clear that consumers who are purchasing vehicles right now are feeling quite secure in their financial position despite the pandemic. The discouraging unemployment numbers we're seeing across the country likely aren't reflective of the Americans in the new car market," said Jessica Caldwell, Edmunds' executive director of insights. "New-car shoppers are putting down more money and taking advantage of continued low interest rates to upsize either to bigger vehicles or vehicles with more amenities."

New Model Year Vehicle Rollout

The pandemic slowed the rollout of new model vehicles this year. However, at this time, Cox Automotive reports the inventory of model year 2021 vehicles now represents 43% of all available inventory, which is close to the level it was a year ago at this time.

Vehicles we've seen roll out in recent weeks include the all-new 2021 Nissan Rogue, 2021 Escalade, 2021 Acura TLX, 2021 Toyota Sienna Hybrid, and the 2021 Nissan Maxima 40th Anniversary Edition. 2021s still to come this fall include the all-new Ford F-150, first-ever Genesis GV80 SUV, new Ford Bronco Sport, Hyundai Elantra, and the first-ever 2021 Ram 1500 TRX and new 2021 Ram Power Wagon 75th Anniversary Edition. The second-generation 2021 Toyota Mirai hydrogen fuel cell and new 2021 Chrysler Pacifica both arrive in December as well.

To find a CarProUSA Certified dealer near you visit www.carprousa.com.

[Editor's note: This article has been updated since it's original posting date.]
Related Articles
How
How to Get Your Christmas Tree Home Safely
You are likely to see more Christmas trees perched atop car roofs this year. Thatís because Christmas tree sales are expected to be up, as families look for some holiday cheer in whatís been a partic... More ›
Donít
Donít Let A Christmas Party Turn Into A Tragedy
Christmas and New Yearís are fast approaching and so, too, is NHTSAís 2020 Drive Sober or Get Pulled Over campaign. Law enforcement agencies nationwide take part in the annual crackdown on drinking an... More ›
Bidding
Bidding Closes Friday, Dec.4, For Eddie Van Halenís Ferrari
Hereís an opportunity of a lifetime for a car collector and Eddie Van Halen fan to own something that, for a time, belonged to late guitarist Eddie Van Halen. His custom 2000 550 Ferrari Maranello 6-s... More ›
Community
Community Can Join Park Place Dealerships To Make The Holiday Season A Little Brighter
We are so thankful for our Car Pro dealers who are helping their communities during this holiday season. Our friends at Park Place Dealerships in Dallas-Fort Worth are among them. The dealership group... More ›
There haven't been any comments left on this blog yet. Be the first to add one!.
xxfseo.com