(November 27, 2020) New-vehicle retail sales for November are expected to decline marginally from November 2019, according to a joint forecast from J.D. Power and LMC Automotive. Retail sales for new vehicles are projected to reach 1,040,000 units, a 0.7% decrease compared with November 2019 when adjusted for selling days. November 2020 contains three fewer selling days and one less selling weekend when compared with November 2019. Comparing the same sales volume without adjusting for the number of selling days translates to a decrease of 12.2% year over year.


Total new-vehicle sales for November, including retail and non-retail transactions, are projected to reach 1,208,100 units, a 3.5% decrease from November 2019 when adjusted for selling days. Reporting the same numbers without controlling for the number of selling days translates to a decrease of 14.6% from November 2019. The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 15.8 million units, down 1.3 million units from 2019.

“November 2020 is a prime example of why accounting for selling day differences is important in measuring comparable sales performance," said Thomas King, president of the data and analytics division at J.D. Power.


"After two consecutive months of year-over-year retail sales gains, a quirk in the November sales calendar will result in new-vehicle retail sales appearing to fall 12%. This year, November has three fewer selling days and one less selling weekend compared with 2019. When these calendar quirks are accounted for, new-vehicle retail sales are expected to almost match 2019 levels. While the sales results illustrate the continued strength of consumer demand, that strength is further reinforced by transaction prices hitting another record high, even as manufacturers and retailers continue to remain disciplined on new-vehicle incentives and discounts."

The average number of days a new vehicle sits on a dealer lot before being sold is on pace to fall to 48 days, remaining below post-recession lows of 50 days for the second consecutive month.

The average incentive from manufacturers on new vehicles is on pace to be $3,866 per vehicle, a decrease of $657 from a year ago and the third consecutive month below $4,000. Expressed as a percentage of the average vehicle MSRP, incentives for November are 9.0%, down two percentage points from a year ago, and the fourth consecutive month below 10%. For context, incentive spending per unit is 22% lower than when it peaked at $4,953 per unit in April 2020.

Retailers also continue to offer smaller discounts on new-vehicle sales. Total grosses per unit, inclusive of finance and insurance income, are on pace to reach $2,144, an increase of $776 from a year ago. This marks the fifth consecutive month above $2,000.

Average transaction prices are expected to reach another all-time high, rising 8.3% to $37,099. Disciplined incentives and discounting, along with the shift towards more expensive trucks and SUVs, remains the key drivers. SUVs and trucks are on pace to account for a combined 78% of retail sales compared with 74% a year ago. For context, average transaction prices are 18% higher in November 2020 than they were in November 2015 at $31,397.

Low interest rates and higher trade-in values are supporting higher transaction prices. The average interest rate for loans in October is expected to fall 91 basis points from a year ago to 4.4%. Over the same time, the average monthly finance payment is up only $19 to $602. Concurrently, the average trade-in value has risen to $5,175, an increase of $772, or 17.5%, from a year ago. Loan terms are relatively stable with the average term up only one month, to 70 months, compared with a year ago.

Looking ahead to December, a healthy sales pace is expected to continue thanks to manufacturers’ progress in relieving inventory constraints, continued strong consumer demand and the year-end sales season.