Revealed – how much are consumers splashing out on new cars?

Revealed – how much are consumers splashing out on new cars? | Insurance Business America

Motor & Fleet

Revealed – how much are consumers splashing out on new cars?

There are insurance implications

Motor & Fleet

By
Abigail Adriatico

Consumers spent around $578 billion on new vehicles in 2023, a forecast released by J.D. Power and GlobalData found.

“December results cap off the year with a strong performance, illustrated by double-digit year-over-year sales growth and the second-highest consumer expenditure on new vehicles ever recorded for the month,” said Thomas King, president of the data and analytics division at J.D. Power.

“Total sales of just under 15.5 million for 2023 represent a significant increase of 12.8% from 2022, when just 13.7 million vehicles were sold,” added King.

He noted that consumers spent a record of $578 billion on new vehicles in 2023, marking the third consecutive year US consumers spent more than half a trillion dollars.

“As inventory improves, the average new-vehicle retail transaction price is declining,” said King.

“However, even with the decline in average transaction prices, consumers are on track to spend nearly $50.4 billion on new vehicles this month—the second highest on record for the month of December and 5.1% higher than December 2022,” he added.

Vehicle sales forecasts for December 2023

According to the report, total sales for new vehicles is projected to reach 1,396,700 units in December, which is a 13.2% increase year-over-year. This number includes both retail and non-retail transactions. While December 2023 has one less selling day from the previous year, there is a 9% year-over-year increase if the same sales volume was compared without adjusting the number of selling days.

The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to reach 15.4 million units, which is a 1.9 million unit increase year-over-year.

In Q4 2023, total sales for new-vehicles are projected to mark a 9.8% increase year-over-year, amounting to 3,826,000 units when adjusted for selling days. When adjusted for selling days, new-vehicle total sales for 2023 are projected to reach 15,466,000 units which is a 13.2% increase year-over-year.