While multiple forecasts have new-vehicle sales gaining significant or perhaps record-setting steam in April, the projection for used-vehicle sales to be generated during the fourth month of 2016 contains a year-over-year decline of nearly 4 percent.
TrueCar indicated that its used-vehicle forecast for total sales — including turns at franchised and independent dealerships as well as private-party transactions — may reach 3,346,766 units, which would be down 3.7 percent from April of last year.
Edmunds.com also is saying that used-vehicle sales will drop this month.
Edmunds indicated that an estimated 3.3 million used vehicles will be sold in April for a seasonally adjusted annualized rate (SAAR) of 38.2 million compared to 3.6 million or a SAAR of 37.1 million used sales in March.
On the new-model side, TrueCar is much more upbeat as analysts pegged their projection for total new-vehicle sales, including fleet deliveries, to reach 1,502,100 units in April. The forecast represents a 3.2-percent rise from a year ago and the highest volume for the month since 2000.
TrueCar went on to share that the month’s SAAR for total light new-vehicle sales is an estimated 17.4 million units for the month versus 16.75 million units a year ago. On a daily selling rate basis, overall sales dipped 0.6 percent given one more day compared with April 2015.
Excluding fleet sales, TrueCar determined U.S. retail deliveries of new cars and light trucks should rise 4 percent to 1,233,900 units on steady consumer demand.
“April is typically a transitional month wedged between higher-volume March and May, but this year dealerships appear to have benefited from an early Easter that fell in March,” said Eric Lyman, TrueCar’s vice president of industry insights. “It’s reassuring when retail sales grow faster than the overall industry pace as it indicates consumers remain very active and engaged in the new vehicle market.”
The analyst team at Kelley Blue Book shared similar sentiments about where April’s new-car sales figure could land
KBB analysts indicated new-vehicle sales are expected to increase 4 percent year-over-year to a total of 1.51 million units in April, resulting in an estimated 17.5 million SAAR. They added that April sales could report the highest April volume ever, surpassing the previous record of 1.5 million units in April 2005.
“Following a disappointing March, we expect sales to get back on track in April with SAAR in the mid-17 million range,” Kelley Blue Book analyst Tim Fleming said. “Increased fleet sales and rising incentive spending among automakers remain the factors to watch, but retail demand appears to be holding steady, signaling the industry’s strong run isn’t over quite yet.”
And like TrueCar and KBB, Edmunds.com also is suspecting that new-vehicle sales could produce records in April.
Edmunds.com forecasted that 1,514,855 new cars and trucks will be sold in the U.S. in April for an estimated SAAR of 17.5 million. Its projected April sales figure would be a 4.8 percent decrease from March but a 4.3-percent increase from April of last year.
Jessica Caldwell who is Edmunds’ director of industry analysis, explained that this month’s sales are poised to eclipse the April record of 1,500,648 new car and truck sales set in 2005, and 2016 is on track to shatter last year’s full-year record of 17.5 million sales.
“Even though Q1 ended with a relatively lackluster March the industry still as strong as ever, and this month’s sales will only reinforce that strength,” Caldwell said. “Considering that April is typically the calm before the storm of summer sales, there’s every reason to believe that 2016 will be a year for the history books.”
Edmunds.com also estimated that retail SAAR will come in at 14.4 million vehicles in April, with fleet transactions accounting for 18.4 percent of total sales.
Like the KBB team, Lyman over at TrueCar mentioned incentives to move new metal, too. TrueCar indicated incentive spending by automakers averaged an estimated $3,021 per vehicle in April, a 13.1-percent increase from a year ago, though down 2.7 percent from March.
“Incentives have ticked up, but backed off from the post-recession high seen in the third quarter of 2015,” Lyman said. “This is a metric we monitor closely as the longest auto sales expansion in the modern era continues. The bottom line is that economic conditions remain favorable and there are still many consumers who need to replace aging cars and trucks.”
TrueCar also pointed out several general economic trends that could help to spur both used- and new-vehicle sales.
“The Federal Open Market Committee left interest rates unchanged last month and overall U.S. economic conditions are still healthy,” TrueCar said.
“March’s unemployment rate was 5.0 percent, the lowest for the month in nine years, and gasoline prices have stayed favorable for consumers, falling to a national average of $2.14 per gallon on April 26 from $2.53 a year earlier,” the firm went on to say.