(Reuters) - New vehicle sales in the United States are expected to drop next year as higher interest rates and rising prices could prompt customers to hold off their car-buying plans, the National Automobile Dealers Association (NADA) said on Thursday.
The dealer lobby estimated sales of 16.8 million units for 2019, saying this would be the first time since 2014 that U.S. new vehicle sales could fall below the 17-million mark.
“If incentives continue to go down and interest rates go up, it will put tremendous pressure on consumers with rising monthly payments,” NADA Chairman Wes Lutz said in a statement. “The level of interest rates moving forward will be a wild card.”
Auto sales in 2018 benefited from President Donald Trump’s overhaul of the U.S. tax code that put more money in the hands of the consumers.
“We’re not going to have that again in 2019,” NADA senior economist Patrick Manzi said. “That’s one of the main reasons we’re expecting new vehicle sales to fall off slightly.”
Reporting by Shravanth Vijayakumar in Bengaluru; Editing by James Emmanuel