October Auto Sales Climb Back To Year-Ago Level, Despite High Prices

Retail U.S. auto sales were expected to be up less than 1% in October vs. the same month a year ago. Still, that’s a sign that consumer demand for new vehicles continues to be strong, and it’s the second month in a row auto sales met or exceeded sales in the year-ago month, the first time that’s happened in 2020.

That’s according to a forecast from TrueCar research and consulting subsidiary ALG. The small increase for October doesn’t include fleet sales to daily rental fleets, government or commercial accounts. Fleet sales are way off, in particular because of the drop in air travel.

One upshot for consumers is that availability of the new 2021 models is starting to improve. That’s a plus for customers who want the latest models and features, but the supply of new-model-year vehicles it’s still low for this time of year, thanks to coronavirus-related shutdowns in March and April for North American auto plants.

ALG’s forecast for total sales, including fleet and retail, is 1.3 million in October. That’s down about 6% from a year ago. Retail sales to individual customers are expected to account for about 1.2 million, an increase of 0.3% from last year.

Auto sales have recovered after cratering in March and April, and probably would have recovered faster if availability had been better, analysts said.

Scarce inventory has helped maintain high prices for new cars this year, especially for in-demand trucks. TrueCar’s ALG says the average transaction price for October, cars and trucks combined, is expected to be $37,018, up 3.1%, or $1,123, vs. October 2019. The forecast is based on data from online transactions earlier this month.

Slightly higher incentive spending could be a small piece of offsetting good news for consumers, ALG said. The research and consulting firm said the average incentive per unit is expected to be $3,869 in October. That’s $97, or 2.6%, higher than October 2019.

Nick Woolard, director of OEM Analytics at TrueCar, said incentives are likely to increase through the end of the year.

However, incentive spending in October was down from an average of $4,083 in September 2020, according to the forecast.

Most automakers quit reporting monthly sales earlier this year, in favor of reporting once a quarter. The remaining automakers are due to report monthly sales for October on Tuesday, Nov. 3, Election Day.