New vehicle sales plunged in February

Rising interest rates among factors cutting into purchases

Despite a strong start to the year, Houston-area new car and truck sales tumbled in February.

There were about 5,800 fewer new vehicles sold in the Houston region in February, about 20 percent fewer than in January, according to data from the TexAuto Facts Report published by Houston-based marketing and data company InfoNation.

Compared with February 2022, sales fell by 12 percent: 11 percent for trucks and 17 percent for cars. The decline in sales was less dramatic in the suburban counties within the Houston area. Car sales there declined by 9 percent year over year, and truck sales increased by 2 percent, contributing to sales being roughly unchanged.

Despite the February slump, January’s strong sales helped keep year-todate vehicle sales in the region 5 percent higher than the first two months of 2022. That keeps the area close to the 7 percent increase in sales this year forecast by industry analysis company Edmunds. Exact data on total U.S. auto sales for the first quarter of 2022 will be released in March.

Nationwide, sales slowed during the second month of the year, according to analysis by Cox Automotive, but were still higher compared with the same month in 2022.

The number of new vehicles on car dealership lots has been increasing since late last year as the supply of various vehicle parts has improved, according to the National Automobile Dealers Association. In 2022, new vehicle sales declined by more than 8 percent, according to NADA, mostly because of a global microchip shortage and other supply chain disruptions.

But rising prices and soaring interest

rates could do damage this year, according to analysis by Cox.

While the average sales price of a vehicle last month in the Houston region — $52,284 — was slightly less than in January, it was about $2,300 more than in February 2022, when the average price was $49,955.

Financing also has become more expensive as interest rates on car loans increased to over 6 percent last month from just under 4 percent in February 2022 according to consumer data research firm Statista.

In the last quarter of 2022, the share of Americans paying at least $1,000 per month on car loans hit historical highs — 15 percent of those who finance a new vehicle and 5 percent of those who finance a used vehicle, according to Edmunds. The average payment in the final three months of 2022 was $717 for a new vehicle and $563 for used.

Dealers who offer electric vehicles got some help from the federal government last summer that may have boosted sales of electric vehicles in January. The Inflation Reduction Act extended a $7,500 tax credit associated with purchases of qualifying electric vehicles starting in January. Electric vehicles accounted for about 7 percent of all registrations for new light-vehicles in the first month of the year, according to Experian data obtained by Automotive News. In January 2022, it was only 4.3 percent. February data has not been publicly released.

Photos by Raquel Natalicchio/Staff photographer Fred Aguilar looks at the features inside Ford’s new electric vehicle, the Mach E, recently at a Houston-area dealership. Vehicle sales in the Houston area fell 20 percent from January to February.

Despite the February slump, January’s strong sales helped keep year-to-date vehicle sales in the region 5 percent higher than the first two months of 2022.

Raquel Natalicchio/Staff photographer Ford’s new electric F-150 Lightning at Hellman Ford Dealership in Houston. Registrations for new electric vehicles jumped to a rate of 7 percent in January.