2020 new car sales and 2021 forecast for repossessions

As we usher in the first month of 2021 after a most atypical 2020, the forecast for new car sales and repossessions is looking a bit grim. Black Book recently released a market insight report for December 2020. There are two key indicators from their report I would like to highlight that should give us an idea of the challenges facing the auto lending industry going into 2021.

New Car Sales Are Down in Q4 2020

First, new car sales are expected to be down around 18% for 2020, compared to 2019. If you look at the graph above, notice how new car sales dropped off in November by 15%, and are expected to drop off 27% in December compared to last year. Historically, November and December are two of the strongest months for new car sales, so this is a worrying trend.

With consumer confidence being much lower than it was prior to the pandemic, people are less likely to go out and finance a vehicle for six or seven years when they don’t know with certainty what their economic future will look like in 2021.

 

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