Activity over Labor Day weekend and the need for replacement vehicles destroyed by Hurricanes Harvey and Irma evidently aren’t going to push used-vehicle retail sales higher this month.
Edmunds analysts said an estimated 3.19 million used vehicles will be sold in September for a seasonally adjusted annual rate (SAAR) of 38.8 million. Those projections are a bit off from what Edmunds reported for August: 3.33 million unit sales or a SAAR of 39.0 million.
On the new-car side, the projection is a bit rosier.
Edmunds forecasts that 1,435,375 new cars and trucks will be sold in the U.S. in September for a SAAR of 17.5 million with fleet transactions accounting for 14.0 percent of total sales. This is the highest SAAR so far in 2017. The previous highs were set in January and February, which both had a SAAR of 17.3 million.
Edmunds added this rate reflects a 2.9-percent decrease in sales from August but a 0.4 percent increase from September of last year.
Edmunds analysts say this slight year-over-year increase is due in part to automakers pumping up the deals over the Labor Day holiday; typically, auto sales over Labor Day weekend are 33 percent higher than the average first weekend of a month.
“Labor Day weekend got September auto sales off to strong start,” said Jessica Caldwell, Edmunds executive director of industry analysis. “Automakers are finally starting to dial up the incentives to clear excess inventory, which we anticipate will continue through the rest of the year.”
Edmunds added that September new-model sales are also expected to get a slight lift from buyers who needed to replace vehicles that were destroyed in the recent hurricanes.
“We anticipate that the recovery from the recent hurricanes will give vehicle sales an incremental boost in September, and will likely continue to slightly lift the market in the months to come,” Caldwell said. “When you have hundreds of thousands of people affected by an event of this magnitude, not everyone will hit the market at once.”
The team at Kelley Blue Book is offering a similar new-car sales projection for September.
New-vehicle sales are expected to rise 1 percent year-over-year to a total of 1.44 million units in September, resulting in an estimated 17.5 million SAAR, according to Kelley Blue Book.
“September will be another opportunity for the first sales increase of the year, as we project slight growth for the industry,” Kelley Blue Book analyst Tim Fleming said.
“While major hurricanes devastated parts of Texas and Florida in the past month, this is driving replacement demand for those drivers with vehicles destroyed,” Fleming continued. “This demand has already started in some areas, but will continue into October and potentially November, as vehicle insurance payouts are received.”
Most consumers are likely to shop used, but with used prices trending upward recently, Kelley Blue Book pointed out some used buyers may opt to purchase new.
In addition, many automakers are offering hurricane relief incentives of up to $1,000. In these areas, car segments are likely to be shopped more, as these vehicles are the most affordable and in plentiful supply. Nationally, demand is still shifting steadily toward SUVs.
Other highlights from KBB’s September sales forecast include:
• In September, new light-vehicle sales, including fleet, are expected to hit 1,440,000 units, up 0.7 percent compared to September 2016 and down 2.6 percent from August.
• The SAAR for September 2017 is estimated to be 17.5 million, down from 17.6 million in September 2016 and up from 16 million in August.
• Retail sales are expected to account for 85.8 percent of volume in September, up from 85.3 percent in September 2016.
After a record year of sales in 2016 and seven consecutive annual increases, Kelley Blue Book’s forecast for 2017 calls for sales in the range of 16.8 and 17.3 million units, which represents a 1 to 4 percent decrease from last year.