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SEARCHA cloudy April forecast was expected due to last April’s sales surge in anticipation of U.S. trade tariff-inflated prices. Meanwhile, automakers pumped up incentives to address today’s consumer wallet woes.
Average incentive packages per vehicle are on track to be up 11% year-over-year this month to $3,141, or 6% of the asking price, JD Power said.
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Though new-vehicle sales are expected down this month due to the absence of last year’s tariff-beating rush, they’re on track to post a respectable result, helped along by incentives.
The JD Power April sales forecast, though, reflects the plenitude of drags on the market as blocks to affordability abound.
April’s average monthly finance payment is expected to be up 3% year-over-year to $812, which JD Power largely attributes to eroded trade-in equity, the average it calculates has fallen 9% to $7,099.
Meanwhile, 31% of trade-in vehicles this month carried negative equity, the highest share for April since the 2020 advent of the pandemic and up about 6% year-over-year. JD Power President of OEM Solutions Thomas King pins the surge to returning buyers who last purchased amid pandemic-era auto production downturns.
The company estimates both retail and total sales to be down 7% year-over-year this month for a retail result of 1.1 million units. It puts the seasonally adjusted annual rate down about 8% to 13.6 million.
Automakers are responding to the consumer squeeze with increased incentives, King said. Average packages per vehicle are on track to be up 11% year-over-year to $3,141, or 6% of the asking price, up half a percentage point from a year ago.
Perhaps in response to high gas prices, incentives are up particularly for nonelectric models: about a 16% jump.
On the bright side, JD Power notes more lessees in the new-vehicle market, up one percentage point from a year ago to 23% after a long period of prospective lessees opting to buy instead due to short supply. The market watcher said it sees continued increased lease demand throughout the year.
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