(December 26, 2020) SANTA MONICA, Calif. — The car shopping experts at Edmunds forecast that 4,036,744 new cars and trucks will be sold in the U.S. in the fourth quarter of 2020. This reflects a 2.8% increase in sales from the third quarter but a 5.7% decrease from Q4 of 2019. Edmunds analysts also estimate that 14,416,447 new vehicles will be sold in 2020, which reflects a 15.5% decrease in sales from 2019.

Although this will put 2020 on track to be the lowest sales year for the automotive industry since 2011, Edmunds experts say that the number is much stronger than expected given major disruptions created by the outbreak of the coronavirus (COVID-19) pandemic.

"Thinking back to the dire state of the market at the outset of the pandemic, it's such a testament to the incredible durability of the entire automotive industry — and the resilience of the American consumer — that we've seen such a healthy rebound in new car purchases this year," said Jessica Caldwell, Edmunds' executive director of insights. "A big comeback story of 2020 is without a doubt the recovery of retail vehicle sales, which have nearly returned to pre-pandemic levels."



Edmunds experts note that the steady rise in average transaction prices (ATP) was another bright spot for the industry, because the increase also helped drive profitability for automakers and dealers. Edmunds analysts anticipate that the ATP for new vehicles will surpass the $40,000 mark for the first time on record in December as consumers continue to show no qualms about upsizing their purchases in favor of bigger vehicles with more amenities.

"It's certainly not much of a buyer's market right now: Inventory is still in short supply in certain areas, and automakers and dealers aren't faced with the pressure to use big discounts to clear out their lots like they normally do at this time of year," said Caldwell. "Although that's not stopping higher-earning consumers from continuing to enter the new market like they have throughout 2020, car shoppers who are a bit more price-sensitive might want to skip holiday shopping and wait until next year if they're looking for big bargains."

Looking ahead to 2021, Edmunds analysts note that there are still uncertainties ahead, but they remain confident that industry sales will continue at a steady pace without a dramatic decline like the one seen at the outset of the pandemic.

"Even if we face another wave of retail shutdowns, the good news is that dealers are far better prepared now for selling virtually than ever before," said Caldwell. "And vaccines on the way should only help keep consumer confidence high."