Car Sales Landscape Sees Impact from US Presidential Elections: Reports Says

Jun 28, 2024 05:52 AM EDT

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The upcoming elections bring many concerns, anticipations, and probable effects. The automotive industry would not be spared from the results of one of America's most, if not the most, significant events.

Expectations are high within the U.S. auto industry as uncertainty prevails, driven by the looming presidential elections scheduled for November. Anticipation surrounds the potential economic transformations, interest rate adjustments, and impacts on inflation levels, according to recent insights shared in a report by Cox Automotive earlier this week.

Biden or Trump: Car Sales Will Brace for Impact

Whether Biden or Trump wins the presidential election will significantly impact on the car industry particularly on car sales. According to a report by Reuters referencing Cox Automotive, consumers in the United States have shown hesitancy towards significant purchases, such as vehicles, citing inflationary concerns.

The ongoing economic uncertainty linked to the upcoming presidential election may further contribute to shoppers' continued restraint in making substantial buying decisions.

Another impact of elections is on interest rates.

As reported in The Autopiabuyers' behavior will significantly have an impact linked to upcoming elections. The report revealed that many consumers and dealers believe the election impacts one's decision to buy a car.

It also clarifies that it is inappropriate to think the next president will influence interest rates in any possible way. Vanessa Ton, senior manager of Research and Market Intelligence at Cox Automotive, highlighted that consumers appear to hold the perception that the forthcoming U.S. election will have ramifications on the economy, interest rates, and inflation.

The Autopia noted that given this prevailing uncertainty, many individuals have embraced a cautious approach, opting to observe and assess the situation before making decisive financial moves.

The Numbers

In a recent statement reported by Newsweek, Charlie Chesbrough, a senior economist at Cox Automotive, emphasized the current consumer sentiment leaning towards delaying purchases in anticipation of better pricing.

The impact of the upcoming election on inflation is acknowledged by approximately 74% of consumers and 81% of car dealers, yet there remains uncertainty regarding the precise effects on vehicle sales.

The findings of the report revealed differing perspectives among car dealers, with 38 percent anticipating a decline in sales due to the election, while 31 percent foresee an improvement or stability in sales levels.

As per consumer beliefs outlined in the report, there is an expectation of potential changes in car prices during the presidential election. Over 40 percent of respondents anticipate a rise in vehicle prices post-election, while 33 percent anticipate no significant alterations.

Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, cautioned against overly optimistic projections regarding changes in auto prices following the election.

Beene emphasized the improbability of substantial price decreases in the future, citing expectations of gradual interest rate cuts within the upcoming year, regardless of the election outcome.

The likelihood of any price adjustments post-election is expected to be modest and incremental, aligning with the gradual nature of market responses to evolving interest rates.