Projected 2024 SAAR of 15.8M outpaces expectations

Fourth-quarter sales jumped in the new- and used-vehicle markets, with both sectors outpacing levels reported a year ago as supply varies. “Going into 2025, one key question for the market is whether the recent sales gains reflect true changes in consumer vehicle demand, likely from improved vehicle affordability, or is the market looking at ... a surge in post-election activity that will dissipate quickly,” Charlie Chesbrough , senior economist with Cox Automotive , said on the company’s 2025 forecast call on Dec. 17. New-vehicle sales are projected to hit 15.8 million units by yearend 2024, outpacing estimates from the start of the year after sales soared in every month since October, according to Cox’s 2025 forecast presentation published Dec. 17. The forecast is 2% higher year over year and slightly higher than estimates of 15.7 million forecasted in January, Chesbrough said. “Through the first three quarters of this year, the recovery stalled as the pace bounced,” he said. “However, since October, the sales pace has shifted to a higher gear.” Fourth-quarter seasonally adjusted annual selling rate (SAAR) is projected at 16.4 million units, up 5.4% YoY and about 5% higher than the Q3 forecast of 15.6 million units, according to the presentation. “It's been a volatile year for the new-vehicle market, but it is expected to finish on a high note,” Chesbrough said. “The vehicle market has been in recovery since hitting an inventory shortage in the fall of 2021, but sales have improved as supply has returned.” Used sales climb in Q4 Used-vehicle sales are tracking 13% higher on a YoY basis, according to the presentation. Specific used-vehicle volumes were not provided in the forecast call or presentation. [caption id="attachment_58347430" align="aligncenter" width="1268"] (Courtesy/Cox Automotive)[/caption] For most of the first half of 2024, used-vehicle sales ran between the levels of 2022 and 2023, said Jeremey Robb , senior director of economic and industry insights with Cox. “Typically, once we hit Q4, the trends start to slow down a little bit, the weather keeps more buyers at home, the holiday season reduces selling days and many customers step to the sidelines for used automotives,” Robb said. However, recent months have shown that used-vehicle sales are averaging almost 1.7 million transactions each month, above patterns recorded in previous years, he said, adding that full-year used-vehicle sales are likely to land 3% higher YoY, he said. “With interest rates starting to come down, we would continue to see more transactions in the market as buyers step in,” Robb said. Used supply tightens Despite the recent uptick in used sales, Cox’s latest forecast indicated that used-car inventory on dealer lots sits at a 46 days’ supply, down 8% YoY. “Over the course of the year, a 46-day supply isn't normally too tight, but at this time of the year, it's much tighter than we normally see,” Robb said. By comparison, the used-car days’ supply is about 10 days lower than the past two years, and about five days lower than supply recorded during the same period in 2019, he said. On the new side, days’ supply is 89 days, and varies “substantially across the brands,” Chesbrough said. [caption id="attachment_58347431" align="aligncenter" width="1227"] (Courtesy/Cox Automotive)[/caption] “On the far right, we see Jeep , Ford and Ram with 120-plus days’ supply, while at the other end, we see BMW , Honda and Toyota with inventory levels well below the national average,” Chesbrough said. “These differences are having an impact on vehicle pricing, with heavy discounting expected from high inventory brands and less discounting from those brands with tighter inventory levels.” Register here for the free Auto Finance News webinar “Tapping Aftermarket Products to Improve Dealer Relations and Profitability,” taking place on Tuesday, Jan. 14, at 10:45 a.m. ET.

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