New data shows that those looking to purchase a car may delay their purchase.
Analysts say the current market is “Unstable and risky,” citing several factors.
Repossessions on auto loans have jumped to highest levels since the Great Recession in 2008–2009 with projections showing around 3 million will be repossessed in 2026.
Higher interest rates continue to plague the market for potential buyers.
“Consumers still have concerns over cost, which include overpaying, overfinancing, or being trapped in unsustainable loans if economic conditions tighten,” reported Forbes.com
Other consumer worries can run a little deeper.
CarEdge co-founder Ray Shefska shares a ist of what some of those may be
What actually happens to the car market in a recession (step-by-step, from sentiment to showroom traffic to approvals)
Why “buyer’s market” headlines can be misleading because transaction volume collapses
What changes first: new cars vs used cars, and why both can drop together when credit tightens
“When fear hits, spending stops and the auto market can seize almost overnight. This isn’t recession-porn. It’s a clear, measurable setup — with auto retail sitting at the intersection of sentiment, affordability, and lending,’ said Shefska.
Car sales were flat for the month of January, the slowest in 3 years.
Car analyst expect auto sales to decrease slightly.
“During a recession, it becomes a ‘. People already feel squeezed: by payments, insurance, repairs, and rent. When confidence breaks, the question isn’t ‘Will prices drop?’ It’s ‘Will I even be approved, and if I am, will I be trapped in a loan I can’t escape?’” says Shefska.
But if a slowdown in the auto industry happens, consumer advocates say it would be a good time to buy, as some are presdicting prices could drop by almost 5% this year.
