New data shows people looking to buy a car may be delaying their purchase.
Analysts say the current market is “volatile and risky” due to several factors.
Auto loan foreclosures have soared to the highest level since the Great Recession of 2008-2009, with about 3 million expected to be foreclosed on in 2026.
Rising interest rates continue to plague the market with potential buyers.
“Consumers remain concerned about costs and are concerned about overpaying, overfinancing, or being locked into unsustainable financing if economic conditions tighten,” Forbes.com reported.
Other consumer concerns may be a little more deep-rooted.
Ray Shefska, co-founder of CarEdge, tells us what they are.
What actually happens to the car market during a recession (step by step from sentiment to showroom access to approvals)
Why ‘buyer’s market’ headlines are misleading as volume declines
What’s going to change first: New and used cars, and why they both go down in value when credit gets tight.
“When fear strikes, spending stops and auto markets can boom almost overnight. This is not recession porn. It’s a clear and measurable mechanism in which auto retail sits at the intersection of sentiment, affordability, and financing,” Szewska said.
Car sales were flat in January, the lowest level in three years.
Auto analysts expect car sales to decline slightly.
“When you have a recession, it’s ‘.’ People already feel squeezed with bills, insurance, repairs, rent, etc. When confidence is lost, the question isn’t ‘will prices go down?'” It’s, “Will I get approved, and even if I do, will I be locked into a loan that I can’t escape?” says Szewska.
But consumer advocates say now is the time to buy, with some predicting a slowdown in the auto industry could cause prices to fall by nearly 5% this year.
