Auto sales in the U.S. are in a freefall, and industry experts can’t seem to pinpoint exactly why.
No matter what the reason, one thing is clear: the auto industry’s loss is our gain.
Why Auto Sales Might be Falling
There could be several reasons car sales are dropping.
Some say it’s because car prices are too high. Others blame it on subprime auto loans.
Some industry experts theorize that dealerships backed themselves into this corner. They say so many people took advantage of great dealer incentives over the last two years that there aren’t many interested buyers left.
It’s also possible that because gas prices are cheap and the labor market is strong, people simply aren’t replacing their cars as often as they used to because they’re built better than they once were.
“Vehicles made in the past 15 to 20 years are vastly more reliable than their predecessors,” suggests Bloomberg’s Kyle Stock. “The U.S. auto industry is in a pickle, in part, because it did too good of a job.”
On the other hand, Jalopnik’s Raphael Orlove says people place too much stock on the idea that today’s cars are manufactured to a higher standard and are therefore more dependable.
“What we really need to think of isn’t the car itself, but the owners. Reliability is a myth. Who owns a car and how it is maintained is what keeps cars alive,” says Orlove.
In other words, we’re taking better care of our stuff so we don’t have to replace it as often.
Let’s also not forget to consider:
- People who favor ride-share options over car ownership
- Homebuyers who prefer to live in walkable communities
- The decrease in the number of people getting a driver’s licence
We could speculate all day why auto sales are declining but, in the end, here’s what really matters.
When Car Sales Drop, Consumers Win
“Companies like Ford and GM have many levers to pull to avoid a disaster — namely, a mix of lowering production and raising incentives to lure drivers back to the dealership,” says Stock.
In an effort to prop up the bottom line, dealers are offering deep discounts to lure car shoppers — in some cases, as much as 10 percent off the sticker price.
Used car prices could drop as much as 50 percent. (If you decide to check out pre-owned vehicles, start with sedans and subcompacts.)
Whether you decide to shop at a dealership or an auction, check out these five tips to save even more money on your next set of wheels.
Lisa McGreevy is a staff writer at The Penny Hoarder. She loves helping readers save a buck or three so look her up on Twitter @lisah if you have a hot tip to share.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
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