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Why Have February Car Sales Hit a Cold Front

It’s been an unusually brutal winter and forecasters debate whether this explains the few percentage point drop in February auto sales. Some experts point to the size of tax returns. Others blame longer lasting variables, specifically increasing sticker prices and ballooning interesting rates. So what’s the right answer?

No doubt all of these factors played a role in the drop of February car sales, but there’s no clear consensus on the main culprit.

Edmunds and TrueCar Inc. agree on a U.S. auto sales prediction of 1.3 million, which is 2-plus percentage points down from the same month in 2018. Overall, forecasters anticipate a slight decline in car sales in 2019.

Jeremy Acevedo, Edmunds’ manager of industry analysis, stressed “the growing costs of new purchases” for a more a basic slowing in retail demand, as opposed to short-term or one-time factors. This assessment is based on Edmunds’ recent February outlook. In turn, this prognosis is based on online shopping behavior from earlier in the month.

Acevedo offers failed Presidents Day promotions as proof of this data. None of these promotions produced a noticeable surge in February sales vs sales from the rest of the month. This fact is very telling. Also, the data suggests sales weren’t boosted by delayed sales from the month of January.

A group of forecasters speculated that the extended government shutdown in January, coupled with another bout of treacherous winter weather, had led buyers to merely postpone their car purchases.

For February 2019, Edmunds anticipates U.S. car sales of 1,271,009 new cars and trucks, which is a dip of 2.2% from February 2018. Meanwhile, TrueCar Inc. says it’s counting on February sales of 1,268,141 units, a 2.6% downgrade.

What do you guys think? Is Mother Nature at fault here? Or is it a combination of factors?



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