November new-car sales are forecasted to be flat year-over-year due to a combination of rising interest rates and continued high sticker prices.
A monthly report by J.D. Power and LMC Automotive shows that though vehicle inventory is improving, consumers are curtailing big-ticket spending due to higher borrowing costs brought about by interest rate hikes, coupled with a continued increase in car prices, albeit at a slower rate.
The report indicates that the average monthly finance payment in November will total $712, up 7.2% year-over-year.
Retail new-car sales are projected to end the month at 933,400, down 0.3% year-over-year, though there’s one additional selling day this month compared to November 2021.
Retail and non-retail sales combined are forecast to be 1,102,300, up 5.6% year-over-year.
"On the retail side, demand continues to exceed supply, as evidenced by continued strength in transaction prices, retailer profits, inventory turn rates and minimal manufacturer discounting,” said Thomas King, president of J.D. Power’s data and analytics division. “However, as inventories and interest rates rise, these metrics will show signs of either moderation or decline."
The report put November’s average new-vehicle price at $45,872, a record for the month and up 3% year-over-year.
King said he anticipates the dynamics seen this month will continue into next year.