September new-car sales fall compared with 2017
New-car sales in the Houston area last month fell 8.8 percent from the previous year, according to a new report.
However, Houstonians weren’t buying fewer cars, trucks and SUVs than normal for a September. This year’s sales decline comes in the wake of last year’s sales spike caused by the flurry of car replacements after Hurricane Harvey flooded thousands of vehicles.
Local dealers sold 25,764 new vehicles in September, which is about the same number sold in August. New-car sales so far this year are up 8.2 percent from the same time last year, according to the TexAuto Facts report from Sugar Land-based InfoNation.
“September was a good month,” InfoNation president Dan McDowell said. “It was just the issue with Harvey last year.”
Still, new-car sales locally and nationally are falling amid rising interest rates. As of August, 7.4 percent of car sales were financed with zero percent annual percentage rate auto loans, compared with 14.6 percent in the same month last year, according to Edmunds, a California-based automobile data provider.
“Interest rates do have an im-
pact on new-car sales,” McDowell said. “Buyers are put off by the increase in interest rates, and they are looking at slightly used vehicles, believing they are getting a better deal.”
Indeed, Houstonians bought 86,104 used vehicles in September, up by 15,000 vehicles from August. The average price of a used car sold by independent dealers in the Houston area last month was $18,250, compared with $36,389 for new cars, according to InfoNation.
Used cars have become more popular among costconscious consumers as the quality of modern cars gives them a longer road life.The average age of a car in the Houston area last year was 9 years, up from 7.3 years in 2000, according to InfoNation. On average, Americans drive their cars for 11 years.
Dealers are now having a harder time finding used cars to sell. Many are contacting previous buyers and asking them if they’re willing to trade for a newer vehicle.
“I’ve been contacted by a dealer wanting to buy my slightly used car,” McDowell said. “Dealers are really scrambling to find used cars since they leave the lot faster than they have before.”
Houston-based Group 1 Automotive, the nation’s third-largest dealership group, earlier this year invested $3 million to launch Val-U-Line, a branded line of older, high-mileage trade-in vehicles that in the past were sent to auction but are now reconditioned and sold in dealerships.
The company posted a record profit in the second quarter as used-car sales jumped 11 percent. The used-car segment represents 10 percent of the company’s business, up from 4 percent historically.