Right now many of the countries car dealers are in New Orleans at the auto industry’s NADA (National Auto Dealer Association) convention. There is some interesting news coming from this event that I think is important to anyone considering buying a car this year. As you know, last year was a horrible year for auto sales; in 2008 sales dropped 18% from 2007. Now forecasts for 2009 are all over the board. The NADA president is forecasting a recovery during the second half of 2009 and a total of 12.7 million in sales for the year. Analysts at companies like Ford and GM are predicting US auto sales for 2009 to be in the 10 million range. That’s a big difference!
So if you are going to be one of the 10 to 12 million people buying a car this year here’s how I would use this information, I would buy your next car before the summer. If the auto manufacturers are planning on selling 10 million units in 2009 then they have scaled back their production plans to meet this new and severely diminished demand. Keep in mind that the last time US auto sales were in the 10 million range was the 1980s. In 2006 US auto sales were 16 million, so to meet a 10 million unit forecast they are drastically scaling back production. If the NADA president is right and there is an upswing in the second half of the year putting demand in the 12 million dollar range while dealers can only supply for 10 million in sales then you have the following basic economic situation – demand is greater than supply and that results in prices going up! So if you know you will be buying a car this year, today may represent your best buying opportunity of 2009 and the later in the year we go, the more you will end up paying for your next vehicle.