Is the car market about to crash?
It’s been 10 years since the last big economic downturn, and many people are starting to feel like another one is on the horizon. The stock market has been volatile lately, and there are concerns about trade wars and rising interest rates.
One sector that could be particularly vulnerable in a recession is the auto market. Sales of new cars have been slowing down in recent months, and there are some signs that the industry is headed for a tough times.
Here are three signs that the car market is heading for a crash:
1. Used car prices are falling
One of the first signs that the car market is in trouble is falling used car prices. When demand for new cars falls, there are more used cars on the market and prices drop.
We’ve already seen this happening in 2018. According to Kelley Blue Book, the average price of a used car has fallen by more than 3% since last year.
2. Auto loan delinquencies are rising
Another sign that the car market is in trouble is rising auto loan delinquencies. This is when people fall behind on their car payments and start to default on their loans.
According to the Federal Reserve, the delinquency rate for auto loans is currently at its highest level since 2012. This is a worrying sign that people are struggling to keep up with their car payments.
3. New car sales are slowing down
One of the most obvious signs that the car market is in trouble is slowing new car sales. This is a key metric that analysts use to gauge the health of the industry.
According to the latest data from the automakers, new car sales in the US fell by 3% in 2018. This is the first time that sales have fallen in four years, and it’s a sign that the market is starting to cool off.
These are just three of the signs that the car market is heading for a crash. If you’re thinking about buying a new car, it’s important to be aware of the risks.
The good news is that there are still some deals to be had out there. If you’re patient and willing to negotiate, you can find a good deal on a new car. But it’s important to remember that the market is changing and a recession could be on the horizon.