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Now that the final number are in, new US light-vehicle sales in October 2022 showed a Seasonally Adjusted Annual Selling Rate (SAAR) of 14.9 million units, the second-highest monthly total this year. It was up 12.7% compared to October 2021 and increase 9.8% from September 2022.
The average transaction price in October, according to J.D. Power, is forecast to be $45,599, a 2.7% increase year-over-year. However, this is only off $26 from September. The old economist’s adage that prices are sticky downward applies we think. Transaction price highs of +$46,000 were experienced during July and August.
Nonetheless, automaker discounts persist at record lows. Average incentive spending per unit per Power is forecast to total $882, which is down 44.7% from October 2021. This is the sixth straight month below $1000. The question is when do vehicles become un-affordable as the Federal Reserve is deliberately sending the economy into a recession to fight inflation, which the Fed caused by years of of cheap monetary policy that mostly benefited the rich. In a mass market for automobiles, the rich can’t buy all the vehicles if and when production resumes to pre-pandemic rates that were running at 17 million vehicles annually. The capacity to build that many vehicles is still there.
Patrick Manzi, chief economist at the National Automobile Dealers Association, says that “at the end of September, the average interest rate on a new-vehicle finance contract had risen above its pre-pandemic level and climbed even higher in October. It’s will likely reach 6.03%, an increase of 199 basis points from October 2021 and the first time the average rate has been above 6% since mid-2019.”
“Additionally, the Fed increased the Fed Funds Rate by 75 basis points at its meeting this week,” Manzi says. “This will add further upward pressure to consumers’ new- and used-vehicle monthly payments. Despite these rising costs, we still foresee new-vehicle demand as remaining robust and new vehicles continuing to turn quickly in the final months of the year. Our forecast for new-vehicle sales in 2022 is 13.8 million units.”
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
Mixed Economic Signals in October US Vehicle Sales
Click for more information.
Now that the final number are in, new US light-vehicle sales in October 2022 showed a Seasonally Adjusted Annual Selling Rate (SAAR) of 14.9 million units, the second-highest monthly total this year. It was up 12.7% compared to October 2021 and increase 9.8% from September 2022.
The average transaction price in October, according to J.D. Power, is forecast to be $45,599, a 2.7% increase year-over-year. However, this is only off $26 from September. The old economist’s adage that prices are sticky downward applies we think. Transaction price highs of +$46,000 were experienced during July and August.
Nonetheless, automaker discounts persist at record lows. Average incentive spending per unit per Power is forecast to total $882, which is down 44.7% from October 2021. This is the sixth straight month below $1000. The question is when do vehicles become un-affordable as the Federal Reserve is deliberately sending the economy into a recession to fight inflation, which the Fed caused by years of of cheap monetary policy that mostly benefited the rich. In a mass market for automobiles, the rich can’t buy all the vehicles if and when production resumes to pre-pandemic rates that were running at 17 million vehicles annually. The capacity to build that many vehicles is still there.
Patrick Manzi, chief economist at the National Automobile Dealers Association, says that “at the end of September, the average interest rate on a new-vehicle finance contract had risen above its pre-pandemic level and climbed even higher in October. It’s will likely reach 6.03%, an increase of 199 basis points from October 2021 and the first time the average rate has been above 6% since mid-2019.”
“Additionally, the Fed increased the Fed Funds Rate by 75 basis points at its meeting this week,” Manzi says. “This will add further upward pressure to consumers’ new- and used-vehicle monthly payments. Despite these rising costs, we still foresee new-vehicle demand as remaining robust and new vehicles continuing to turn quickly in the final months of the year. Our forecast for new-vehicle sales in 2022 is 13.8 million units.”
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.