Jeep kicks off the new year with the launch of the 2021 Grand Cherokee L which will arrive in the second quarter of 2021. Credit: Jeep.
Welcome to 2021 everyone! The auto industry wrapped up a tumultuous 2020 on a high note, with a strong fourth quarter. Car shoppers saw some fantastic year-end incentives and we hope you were able to take advantage of those at one of our Car Pro Certified Dealers. If not, we’re here to help you guide you through your purchase decision this year. Some new vehicle launches are coming our way, including the just unveiled 2021 Jeep Grand Cherokee L due out in the second quarter.
As Car Pro Show host Jerry Reynolds discusses here, a tally of 2020 sales numbers across the industry shows about a 14.5 percent drop in sales for the year. But considering the year we just had, and the inventory shortages caused by plant shutdowns earlier in the year due to Covid-19, automakers were able to turn things around in a greater degree than expected.
“Business was better in 2020 than any of us ever thought it would be considering the pandemic,” said Reynolds on Saturday’s Car Pro Show.
Car shoppers of course have a lot to do with that. Edmunds says despite the economic hardships many are facing right now due to the pandemic, consumers with disposable income actually made bigger, more expensive car purchases last year. A result of that can be seen at Porsche Cars North America, which just reported its second-best sales year ever in the U.S.
"Consumers historically lean toward purchasing pricey luxury cars, trucks and SUVs during the holiday season, which is partially why we're seeing this lift. But we're also just seeing a broader trend of consumers gravitating toward bigger purchases during the pandemic," said Jessica Caldwell, Edmunds' executive director of insights. "It might seem at odds with unemployment levels and the harsh financial conditions that so many Americans are finding themselves in right now, but the consumers who are buying new cars during the pandemic are clearly on the other side of the economic divide. They're likely qualifying for the lowest promotional rates and feeling secure enough to put down more money to get the bigger vehicles and features that they want."
It’s not just that buyers who can afford it are buying new vehicles. They are also spending for them, making larger down payments as well as monthly payments. In 2020, new vehicle prices hit a record high, topping the $40,000 mark. Cox Automotive reports that according to an analysis of vAuto Available Inventory data, the average list prices of new cars in December was $40,423. Guys, that is up 6.2% from last year.
Edmunds data further reveals:
- The average down payment for a new vehicle climbed to $4,734 in the Q4, compared to $4,458 in Q3 and $4,329 a year ago.
- The average amount financed for new vehicle purchases climbed to $35,373 in Q4 compared to $34,692 in Q3 and $33,525 a year ago.
- The average monthly payment reached $581 on average in Q4 compared to $568 in Q3 and $570 a year ago.
So what’s next for the industry and car shoppers? Reynolds talks about how hard the future will be to predict on last Saturday’s Car Pro Show (Hour 1).
“I don't know that there's been a harder year to try to predict anything than the one we just started 2021. You know there are so many variables out there," said Reynolds. "I really kind of think that by the end of the first quarter, inventory levels will be back to where they were pre-pandemic, and that's going to take a lot of work because a lot of the manufacturers are short on cars right now, but they are also being very creative. I mean the new 21, 20-21 F-150 that everybody wants, you've seen it on TV, just you know, an incredible truck, they're finalizing the assembly of those outside. Never seen them do that before."
You can listen to the January 2, 2021 podcast here.
As we all continue to navigate the year ahead of us with all of its variables that exist due to the pandemic, our goal here is to keep you updated with what’s happening in the car industry and what it means for you, the car shopper. One thing is certain and that is that we, along with our CarProUSA Certified Dealers, remain committed to providing you with the best car buying experience possible. Our dealers continue to adhere to all safety protocols and guidance from the CDC. Online car shopping has never been easier, as well.
We hope you’ll tune into the Car Pro Show each Saturday for Jerry’s insight on what’s going on in the car industry and what it means for shoppers looking for a new set of wheels. Don’t forget to visit our YouTube channel to watch Jerry’s weekly new vehicle reviews. To find a CarProUSA Certified dealer near you visit www.carprousa.com.
[Editor's note: This article is regularly updated and was last updated January 7,2021. ]