Worries about the economy in 2019 are keeping Wall Street traders up at night, and a new report from automotive publisher Edmunds won’t help.
The experts at Edmunds expect new car sales will continue to go down next year after peaking in 2017. Their report forecasts 16.9 million new vehicles will be sold in 2019, compared to an expected 17.2 million vehicles in 2018.
But put in a historical context, next year’s numbers might not be that low. Auto sales have surged in the early part of the decade and are only now tapering off. At the same time, a solid job market and low gas prices could increase consumers’ confidence to buy.
Because there was such a large number of auto leases in 2016, millions of three-year-old vehicles will come off lease in 2019, and chances are those consumers will choose another lease, which could actually boost new car sales.
Impact of expiring leases
"Since we reached 'peak lease' in 2016, more than four million consumers are expected to turn in their vehicles and come back to the market in 2019, which will have a major impact on new vehicle sales," said Jessica Caldwell, executive director of industry analysis for Edmunds.
But there’s a catch, she says. Consumers are returning to a very different automotive market. Prices of new cars have gone up, and so have interest rates. That means leasing a new car in 2019 may be more expensive than it was three years ago. Right now, however, there appear to be plenty of deals.
Wantalease, an online lease marketplace, says it might be more expensive to lease a truck or SUV, but lease prices on some sedans and compacts have gone down in December.
Current lease deals
Right now, the lease payment on the Chevrolet Cruz is down 13.31 percent. You can lease a Ford Focus for 8.44 percent less and a Toyota Corolla for 7.29 percent less.
But some truck leases are even lower. Wantalease reports the lease payment on the Dodge Ram 1500 Crew Cab is just $129 a month. That’s lower than the Volkswagen Jetta, which carries a monthly payment of $139.
That means a savvy car buyer will need to shop carefully in 2019 to select a vehicle which the dealer is highly motivated to sell. Edmunds expects new cars will sell for an average of $3,000 more than in 2018. Because of rising interest rates, financing a new car purchase will cost an average of $1,800 more over the course of a 60-month loan.
Keep an eye on your inbox, the lastest consumer news is on it's way!