The average transaction value, what other people pay for a car or truck, after considering incentives, is expected to reach a record for April at $37,572, according to JD Power and LMC Automotive.
It would be the second highest month recorded, after an all-time record of $37,966 in December 2020. To put this in some context, the average value of the transaction has increased by 20% until April 2016, just five years ago, according to an April forecast is not unusual between JD Power and LMC.
However, peak costs do not seem to discourage demand. Car sales in April are expected to be around 1. 5 million cars and trucks combined. That’s more than double April 2020, but it’s not a representative comparison, as 2020 car sales reached a low in April last year due to closures by coronavirus-related companies.
Compared to April 2019, April 2021 car sales are expected to be approximately 8% higher than in April 2019, forecasting corporations said.
The strong demand is in reaction to the downselling of new cars for sale, and this is driving prices, analysts said. Inventories are low due to the slow recovery in car production last year, as well as the shortage of PC chips used in this year’s automotive production, which has widened shortages.
Another vital thing is the continued evolution of consumers towards vans and truck-like crossovers, unlike the most classic passenger cars. Vans and crossovers tend to be much bigger, heavier and more expensive than cars.
Trucks and crossovers are expected to account for about 76% of new vehicle retail in April, Power and LMC said.
Unsurprisingly, automakers and dealers are cutting their discounts, as demand is higher, costs are high and materials are low.
Traders cite repressed demand, low interest rates, longer loan terms, and the government’s stimulus budget as partial offsets of higher prices.
The average incentive consistent with the unit in April is expected to be $3,191, 35% less than in April 2020 Incentives were higher in April 2020 in reaction to the pandemic, but incentives declined after car sales began last year. the average incentive in April 2021 has dropped by 10%.
I am a journalist with more than 25 years of experience in writing and running in the automotive industry. After graduating from the University of North Carolina with a degree in journalism,
I am a journalist with more than 25 years of experience in writing and running in the automotive industry. After graduating in journalism from the University of North Carolina-Chapel Hill, where I got the Morehead Scholarship, I started with the much-loved Nashville Banner, My Speed Included Saturn Corp. GM in the Spring Hill, Tennessee countryside, when the plant was still a ground gap as well as Nissan’s giant plant nearby. This became an article in Automotive News, the industry-leading advertising newspaper automotive industry, such as the New York City Individual Office, which covers European luxury brands, Wall Street, publicly traded broker groups, retail car financing, and monthly car sales. Mercedes-Benz USA gave me a privileged perspective. More recently, my independent assignments have included Advertising Age, Automotive News, AutoWeek, Bankrate. com, Businessweek. com, CBS Interactive, The Financialist through Credit Suisse, ForbesAutos. com and Forbes. com. I’m also the former editor of Auto Finance News in New York.