Higher Interest Rates Will Likely Reduce 2019 Sales by 300,000 Units, Analyst Says

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Rising interest rates will likely shave vehicle sales by 300,000 units this year, predicted Eric Lyman, senior vice president of ALG, an analytics subsidiary of TrueCar.

“It’s not insignificant,” Lyman told AFN, “but not large enough to be a shock to the auto retail environment either.”

A 300,000-unit sales decline in 2019 would translate to about a 1% year-over-year drop in volume.

Automakers will likely boost incentives this year, in an effort to offset the higher interest rates consumers will be paying, Lyman said, adding that a strong economy should soften the overall impact.

“One theory around [an] increasing interest rate is that it’ll move in lockstep with a stronger economy and more discretionary spending,” he said.

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