March car sale madness could mean a decline in sales

We have seen TrueCar and Kelley Blue Book report March car sales. Edmunds.com estimates that 1.6 million new cars were sold in March. However, Edmunds.com analysts warn that there is huge inventory of vehicles, high incentives and subprime lending could show a decline in sales.

Edmunds.com, the leading car shopping and information platform, forecasts that 1,609,846 new cars and trucks will be sold in the U.S. in March, for an estimated Seasonally Adjusted Annual Rate (SAAR) of 17.2 million. This reflects a 21 percent increase in sales from February 2017, and a 2 percent increase from March 2016. Edmunds.com experts also forecast that auto sales in the first quarter of 2017 will total 4,076,463, which is essentially flat compared to Q1 of 2016 when 4,083,747 vehicles were sold.

“If you only look at the sales numbers, it could be tempting to say that the industry is just as strong as it was a year ago,” said Jessica Caldwell, Edmunds executive director of industry analysis. “But there are several areas of concern this year lurking just below the surface. Inventories have reached levels not seen in more than a decade, and incentives are rising. We’re also seeing an increase in loan duration and indications of an increase in subprime lending, both of which demonstrate sales aren’t coming as easily as they used to.”

Edmunds.com estimates that retail SAAR will come in at 13.1 million vehicles in March 2017, with fleet transactions accounting for 23.7 percent of total sales. An estimated 3.6 million used vehicles will be sold in March 2017, for a SAAR of 38.2 million (compared to 3.4 million – or a SAAR of 38.2 million – in February).