New light-vehicle sales rose year over year in November, but were down slightly from October sales, reported the NADA Market Beat.
November’s SAAR of 14.1 million units rose 7.9% compared to November 2021 but was down 6.5% compared to October 2022.
Vehicle ability continues to improve with inventory on the ground and in transit hitting 1.65 million units in November, according to Ward’s Intelligence. This figure is up 57% year over year and up 6.9% compared to October.
NADA reports, “We expect inventory at the end of the year will be roughly flat compared with the end of November’s total.”
Transaction prices also continue to rise, reported NADA Market Beat. J.D. Power forecasts that November 2022’s average transaction price will reach $45,872, 3.1% higher than in 2021.
Rising transaction prices, interest rates and incentive spending near record lows are pushing new vehicle payments higher than ever. J.D. Power reports the average interest rate on a new-vehicle finance contract will reach 6.27%, an increase of 238 basis points from November 2021. Average incentive spending per unit has fallen 35% year over year to $1,009.
All these factors combined have pushed the average monthly payment in November 2022 to $712, an increase of $48 from November 2021.
J.D. Power predicts interest rates will rise even higher before the end of 2022 as the Federal Reserve is expected to raise rates again at its December meeting.
NADA says it doesn’t expect many surprises in December. “New vehicle light sales have averaged 1.13 million units sold per month since June,” he says. “We believe that December’s new vehicle sales volume will be roughly in line with the past five months’ average. Our forecast for total sales is 13.6 million units for 2022.”
Originally posted on Auto Dealer Today