Used-car sales to increase in January despite weather

SANTA MONICA, Calif., and IRVINE, Calif. - 

Depending on whose prediction you look at, the currently projected estimation for new-vehicle sales in January is expected to decline from as little as half a percent to as much as 3 percent compared to January 2015. The used-car market, however, is expected to clear 3.05 million vehicles by Monday, which would result in roughly a 2-percent increase over last-year’s January results.

According to the analysts at Edmunds.com, the 3.05 million used vehicles they anticipate will have been sold in the United States in January would be a slight increase over the 2.99 million they say were sold in January 2015.

Unfortunately, it appears as though new-vehicle sales did not weather the harsh snow the country experienced in January quite as well.

Edmunds is predicting that 1,143,839 new vehicles will be sold in the U.S. in January, while Kelley Blue Book is estimating that 1.12 million new vehicles will be sold by the end of January.

"As expected, Winter Storm Jonas limited car sales from reaching their full potential, especially for import brands, which are traditionally popular in East Coast markets," said Jessica Caldwell, Edmunds.com’s director of industry analysis. "But weather factors aside, this was still a pretty good month for car sales. The January sales rate typically falls on the low end of the curve every year, so if historic patterns hold we're off to a healthy start for 2016."

Edmunds pointed out that 19.5 percent of total new sales in January were made up of fleet transactions. The company’s estimated SAAR came out to 17.5 million.

KBB analyst Tim Fleming agreed with Caldwell, saying that the blizzard’s impact on densely populated areas hurt dealer foot traffic. Also pointing out that January tends to be the slowest sales month of the year, he believes that any lost sales will be postponed until February.

Fleming believes that the compact car segment will be the one to watch this year.

“One segment to watch in 2016 will be compact cars,” Fleming said. “Similar to mid-size cars, market share for these models has been declining for the past three years. While this trend could continue this year, three of the top four models in this segment (Honda Civic, Chevrolet Cruze and Hyundai Elantra) will have redesigned models on the market in the first half of the year. Much of the focus recently has been on the booming growth of small SUVs, but the new small cars on the way could spark consumer interest.”

Other than the weather, January also had fewer sales days (24) compared to last year (26). 

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