Edmunds is forecasting that May U.S. new car and truck sales will hit 1,074,542,  an estimated seasonally adjusted annual rate (SAAR) of 11.8 million. This reflects a 32.5 percent decrease in sales from May 2019, but a 50.5 percent increase from April 2020.

“We can safely say that April was the bottom for auto sales during the coronavirus pandemic,” said Jessica Caldwell, Edmunds' executive director of insights. “There's still a long road to recovery ahead, but May auto sales are a really encouraging sign for the industry.”

Edmunds experts note that automakers have already begun to dial back some of the more generous financing incentives made available at the start of the crisis; consumer demand continues to grow and inventory could begin to dwindle as auto manufacturers work on getting their factories safely and consistently up and running.

Edmunds estimates that retail SAAR will come in at 10.2 million vehicles in May 2020, with fleet transactions accounting for 13.5 percent of total sales.

 

A record number of consumers are upside down on their car loans, according to new research released by the car shopping experts at Edmunds. Edmunds data shows that in April an all-time record share of 44 percent of new vehicle sales with a trade-in had negative equity, compared to 40 percent in March and 33 percent in April of 2019. The average amount owed on upside-down loans also climbed to an all-time record high of $5,571 in April, compared to $5,405 in March and $5,036 in April of 2019.

“At first glance, the numbers are certainly alarming, but there are some potential upsides for shoppers with negative equity who purchased a vehicle in April compared to those who did so just a year ago,” said Ivan Drury, Edmunds’ senior manager of insights.

Edmunds data shows that the average interest rate for loans involving a trade-in with a carried-over balance was 7.3 percent in April 2019, and in April 2020, that number dropped to 4.7 percent.

Edmunds reported that April will be a record down month for the auto industry due to the coronavirus pandemic, forecasting that 633,260 new cars and trucks will be sold in the U.S. for an estimated seasonally adjusted annual rate (SAAR) of 7.7 million. This reflects a 52.5 percent decrease in sales from April 2019, and a 36.6 percent decrease from March 2020. Edmunds analysts note that this is the lowest-volume sales month dating back to at least 1990; the second worst month for sales in the past 30 years was January of 2009, when 655,000 vehicles were sold.

“April auto sales took the biggest hit we’ve seen in decades,” said Jessica Caldwell, Edmunds’ executive director of insights. “These bleak figures aren’t just because consumers are holding back on their purchases — fleet sales are seeing an even more dramatic drop as daily rental business has dried up. Like many other industries, the entire automotive sector is struggling as the coronavirus crisis continues to cripple the economy.”

Edmunds experts note that plans for easing shelter-in-place orders across the country in May could open up opportunities for automakers and dealers to capture some deferred demand, but there is still economic uncertainty ahead.  

“April is likely the bottom for auto sales, so hopefully there’s only room for improvement from here,” Caldwell said.

Edmunds is extending through the end of May the 50 percent discount that it provided to its dealer partners in April. Subscription services for dealer partners will remain active and fully supported by Edmunds’ sales teams.

“Edmunds is doing everything it can to support our dealer partners as our industry continues to navigate through this crisis,” said Avi Steinlauf, Edmunds’ chief executive officer.

Edmunds has also launched a completely redesigned Industry Center page, where dealers can find all of Edmunds’ free digital product offerings and solutions that will help them better navigate the challenges of the current selling environment. These include inventory badges on the Edmunds website for stores that offer home delivery or have custom hours, and Edmunds’ Digital Retailing solution, which lives on the Edmunds website and enhances remote sales by driving car shoppers who have already built their deals online directly to dealers.

Trucks are making a big comeback, according to a new report released by Edmunds.

Data from Edmunds reveals that market share for full-size trucks hit a 14-year high in 2019, constituting 14.5 percent of the new vehicle market, and full-size truck sales climbed to 2.4 million in 2019, which represents a 123 percent increase from 2009. According to Edmunds experts, the strength of the economy, lower gas prices and stable interest rates, combined with an explosion of options and amenities in the segment, have helped drive full-size truck sales to a post-recession record.

Edmunds data reveals that full-size trucks have outpaced other segments in price growth because more shoppers are opting for higher trim levels, features, and physically bigger trucks overall. In 2019, the average transaction price for a full-size truck was $49,888, more than $12,500 higher than the industry average of $37,310. Ten years ago, the ATP for a full-size truck was $34,987, which was $6,300 higher than the industry average of $28,609.

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