DETROIT (AP) — U.S. new car sales rose 2.7% last year as prices and interest rates eased slightly, making SUVs, cars and trucks a little more affordable.
Industry analysts say discounts such as rebates and low-interest financing should get even better as 2025 approaches, and that 2024 should see the biggest deals at dealerships representing struggling automakers. are.
Motorintelligence.com reported Friday that automakers sold just over 16 million cars in the U.S. last year, despite high average selling prices of more than $47,000. It was the highest sales since 2019, before the coronavirus pandemic. However, prices were still 27% higher than in 2019.
Electric vehicle sales in the same year increased by 8.8% to just under 1.3 million units, surpassing the previous record of 1.19 million units set in 2023. This is slower growth than the 47% increase in 2023, and with President-elect Donald Trump potentially eliminating the $7,500 tax credit when he takes office later this month, EVs face an uncertain future. There is.
Gas-electric hybrids continue to grow in popularity, with sales of just over 1.6 million units, an increase of 36% compared to 2023.
General Motors ended the year with a U.S. sales crown, posting a 4.3% increase in sales, its best performance since 2019. Toyota reported a 3.7% sales increase and Ford’s sales increased 4.2%.
Jeep and Ram maker Stellantis has struggled for much of this year with too many expensive vehicles on dealer lots, with sales down 14.8%. Honda, which recorded an 8.8% increase, pushed it out of fourth place and moved up to fifth place.
Nissan’s annual sales rose 2.8%, narrowly beating Hyundai’s 4.8% increase. Kia Motors’ sales increased by 1.8%.
The average selling price of a car fell by just under 1% during the year. Ivan Drury, director of insights for the Edmunds.com automotive site, said he expects this to continue at least through the second half of this year.
Additionally, the Fed expects to cut rates three times in 2024, plus two more this year. Drury said his monthly payments would then be a little lower. Average interest rates on auto loans fell from a peak of 7.3% in July last year to 6.6% in December, Drury said.
He said he doesn’t expect prices to fluctuate much in the first three months of the year as automakers look to clear large amounts of inventory of 2024 models. “If you have more than six months, just wait it out,” he said. “Further afield, better things can happen.”
Drury said buyers may need to switch brands to Stellantis or even Ford to get a good deal. This is because Ford has more inventory at dealers than Honda or Toyota.
Even the Toyota brand, which had the lowest inventory in the industry with just five days’ worth of sales, said it expected to increase discounts this year as vehicle supply increases.
“Incentive spending will probably increase next year, both for the industry and for us, because we have more availability,” said David Christ, vice president of Toyota North America.
