According to new data from Cox Automotive, the market has shown signs of resilience as new-vehicle sales for November are expected to maintain a seasonally adjusted annual rate (SAAR) of 16 million units, consistent with October’s sales pace. This marks a notable recovery compared to last year’s SAAR of 15.5 million. Despite a slight 1.3% decrease in sales volume from October, new-vehicle sales are projected to reach 1.32 million units, a 6.6% increase over November 2023. The jump can be attributed to an extra selling day compared to the previous year and improving market conditions as we head toward year-end.
One of the primary drivers of this positive trend is the surge in new-vehicle inventory, which surpassed 3 million units in November—its highest level since the pandemic began. This increase in available vehicles has provided dealerships with more stock to meet consumer demand, translating into higher sales. Along with the rising inventory levels, manufacturers have been offering more incentives to help move vehicles off the lot. Sales incentives jumped to 7.7% of the average transaction price in October, marking the fifth consecutive month of higher incentives and the highest rate since 2021.
Cox Automotive’s Senior Economist, Charlie Chesbrough, pointed to several factors contributing to this market stability, including a decline in uncertainty after the U.S. elections and a boost in consumer confidence. These factors are expected to continue influencing buying behavior through the end of 2024, especially as consumers are encouraged by better vehicle affordability. Lower auto loan rates and increased incentives are making it easier for buyers to make purchases, even as vehicle prices remain high.
In addition, there is growing anticipation surrounding the electric vehicle (EV) segment. With the potential reduction of federal EV tax credits in 2025 under the incoming administration, many consumers are moving quickly to secure deals on EVs and plug-in hybrid vehicles (PHEVs). This rush could lead to a stronger-than-expected finish to the year for EV sales. The combination of rising inventories, improved consumer confidence, and a potential last-minute push for EVs signals a promising end to 2024, with the potential for robust sales in the final quarter.
