TrueCar Inc. projects 16 million new light vehicle sales for 2021, an increase of 10 percent from last year. Retail sales are expected to reach 13.9 million, an increase of 9.6 percent from 2020.

"The year 2020 was a challenging one for the automotive industry and the economy at large, but the recovery came faster than most expected, providing strong momentum and pent-up demand going into 2021," said Nick Woolard, Lead Industry Analyst at TrueCar. "Retail demand is healthy and will remain the driving force for total vehicle sales in 2021. Fleet sales will also increase, but at a much slower pace, due to the uncertainty surrounding travel."

Q4 2020 saw record-breaking average transaction prices for new vehicles, as incentives eased and consumers opted for more expensive SUVs and trucks. The trend toward more expensive vehicles continues in 2021. Average transaction prices are projected to increase 3.1 percent year over year to $37,925. In previous years, the average transaction increased roughly 4 percent year over year.

"As the K-shaped recovery takes shape in 2021, we expect higher-income households, who have not been financially impacted by the pandemic, to continue making new vehicle purchases," added Woolard. "Continued trends toward large trucks, SUVs, and a growing array of electric vehicles as well as additional safety and technology content will lead to even higher average transaction prices in 2021."

In the week ending Jan. 9, the advance figure for seasonally adjusted initial claims was 965,000, an increase of 181,000 from the previous week's revised level. The previous week's level was revised down by 3,000 from 787,000 to 784,000. The four-week moving average was 834,250, an increase of 18,250 from the previous week's revised average. The previous week's average was revised down by 2,750 from 818,750 to 816,000.

Labor Secretary Eugene Scalia, commenting this week on the December 2020 Employment Situation report, stated that while the economy continues to recover generally, certain sectors and states still struggle.

“The 140,000 jobs lost in December were driven principally by the loss of 498,000 jobs in leisure and hospitality; data from the Restaurant Law Center shows that in the reporting period, six states (Washington, Minnesota, Michigan, Pennsylvania, New Mexico, and Oregon) reduced indoor dining occupancy to zero,” Scalia said. “Fortunately, Congress finally enacted additional coronavirus relief at the end of December. The new $300 a week federal (unemployment payment), combined with state unemployment benefits, will replace on average more than 90 percent of wages in leisure and hospitality jobs.

“Meanwhile, employment grew in December in six of the nine major industrial sectors that had significant changes, including manufacturing and retail.”

Cars.com has come up with the top five trends advancing the auto space in 2021 and beyond.

The COVID-19 pandemic forever altered car buying and selling, and changes will persist this year as Americans continue to spend more time at home and online, place a premium on the freedom car ownership provides, and keep affordability and electric vehicles top of mind.

Cars.com predicts the following trends will have the most long-term impact on car shopping in 2021.

New wave of car buyers emerge: Nearly 50 percent of people surveyed by Cars.com say they continue to rely less on mass transit and ride-sharing services. Of Americans who previously did not own a car, nearly 20 percent are considering purchasing one.

The driveway becomes the dealer lot: In 2021, at-home delivery of vehicles and trading in vehicles from the driveway will become more mainstream. Fifty percent of Cars.com dealer customers are offering home delivery services.

Virtual selling streamlines car buying: As dealership adoption of digital tools and technology increases, car shoppers can expect more of the purchase process to take place on virtual selling platforms such as chat, video and dealer websites.

Affordability is at the forefront for consumers: Car shoppers will continue to keep affordability top of mind this year. Although low interest rates and favorable credit conditions are helping keep monthly payments down for buyers, lean vehicle inventory conditions have resulted in unusually high new- and used-car prices. As a result, shoppers are prioritizing more comfortably priced vehicles.

Advancement in EVs with federal support and evolved technology. Electric vehicles could have a big year in 2021 as the incoming administration supports the EV market with consumer incentives, infrastructure plans and federal fleet purchases. With tech companies such as Apple rumored to enter the market, and automakers like Hyundai, Ford and GM announcing plans to significantly invest and expand their EV platforms, it's clear the race for EV domination is on.

Rivian has selected Chase as its private label partner to provide customers with a truly digital-first vehicle financing journey. The private label Rivian Financial Services will deliver a best-in-class financing journey for retail customers through a highly transparent, interactive and simple purchase process. The program is set to launch in early 2021, ahead of June 2021 deliveries of Rivian’s R1T pickup.

“At Rivian, we’re focused on delivering truly exceptional customer experiences with every interaction,” said Chief Growth Officer Jiten Behl. “Chase is aligned with our goal of fully reimagining the vehicle purchasing process for the digital era and making the investments to deliver a best-in-class financing solution for Rivian customers.”

Customers will be able to navigate a fully digital process at their own pace. Beginning with the credit application on rivian.com, customers can self-select a retail financing structure that best fits their needs. Customers will have the opportunity to review the financing details and electronically sign required documents. After vehicle delivery, customers can take advantage of digital servicing to view their account, make payments and obtain personalized customer support.

Swapalease.com, the nation’s largest car lease marketplace, reports car lease credit applicants registered a 72.7 percent approval rate in December. The approval rate is significant considering approval ratings hit a low of 63.8 percent in April, the lowest rate reported since January of 2018.

Scott Hall VP of operations for Swapalease.com

With the holiday season being an optimal time to buy or lease a vehicle, it is no surprise that approval ratings saw an increase in December. According to Experian’s State of the Automotive Finance Market Report, in the second quarter of 2020, nearly 26 percent of new vehicles were leased. While this number is down from pre-pandemic levels, Swapalease.com believes many of its site visitors have solid credentials available to take over a person’s vehicle lease.

December has historically turned out a higher lease credit approval rating, likely due to end of year sales and lease deals. In December of 2019, 72 percent of applicants were approved to take over another person’s lease, and in December of 2018, 71.4 percent of applicants were approved.

“The automotive industry took a hard hit in early 2020, especially as stay-at-home mandates were implemented and businesses were temporarily shut down,” said Scot Hall, executive vice president of operations at Swapalease.com. “We’ve continued to see slight increases month-over-month since May, and we’re optimistic at the outlook for the 2021 calendar year.”

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