March Auto Sales Look Great, Compared to Pandemic’s Start
CUNA Mutual Group forecasts a 17% gain for the year.
TrueCar Inc. forecast Thursday that dealers will sell 1.26 million new cars in March, up 52.9% from March 2020 and up 9.9% from February, when adjusted for the number of sales days.
Used vehicle sales for March 2021 are expected to reach 3.6 million, up 104% from a year ago and up 1% from February 2021.
Meanwhile, CUNA Mutual Group of Madison, Wis., forecast that car and light truck sales will rise 17% to 17.1 million vehicles in 2021, a number above long-run demand of 16.5 million vehicles a year.
“Factors supporting auto sales in 2021 include: Herd immunity reached in the third quarter, falling job/income uncertainty raising consumer confidence, record low auto loan interest rates, low debt burdens, rising job growth, record high stock prices and record breaking rise in home prices,” according to CUNA Mutual Group’s Credit Union Trends Report.
However, credit union automotive loans stalled in January, the latest month available in the report. New car loans were 140.4 billion as of Jan. 31, down 6% from a year earlier. Used car loans grew 4.2% to $241.6 billion.
By comparison, credit union non-auto loans grew 6.8% to $807.1 billion in January.
TrueCar, based in Santa Monica, Calif., projected total sales, including fleet sales, will reach 1.46 vehicles in March 2021, up 42% from a year ago and up 13% from February 2021, when adjusted for the same number of selling days.
Usually, year-ago comparisons are made to compensate for seasonal variations. Starting this month, however, those comparisons will be against the abnormalities of the pandemic, which began in March 2020.
Nick Woolard, TrueCar’s lead industry analyst, said the pandemic’s dramatic impact on the automotive industry and U.S. economy at large began in the last two weeks of March 2020 when dealerships and factories shut down, and governments began issuing stay-at-home orders.
“Automotive sales dropped 38% from 2019, so it’s no surprise that we’re seeing total sales up 42% and retail sales up 53% when compared to the March 2020,” Woolard said. “Looking at the year-over-year sales forecast, domestic brands such as GM and Ford, fared much better because parts of the country that hold a majority of trucks sales from these brands had not yet rolled out their state stay-at-home orders at this point last year.”
TrueCar’s March forecast brought retail vehicle sales to 3.25 million for the first quarter, up 21.1% from March 2020 and down 7.2% from the fourth quarter.
TrueCar’s report also estimated:
- The average interest rate on new vehicles is 4.7% and the average interest rate on used vehicles is 8.3%.
- The average loan term on a new vehicle for March 2021 is 70 months, a two-month decrease, when compared to the average loan term of 72 months from this time last year.
- The average car or truck sold at retail for $37,549 in March, up 3.3% from March 2020 and down 0.6% from February.
- Incentives were 8.9% of average transaction prices, compared with 11.1% in March 2020 and 9.1% in February.
- March’s seasonally adjusted annualized rate (SAAR) for total light vehicle sales will be 16.4 million units.