Last year we were really selling new vehicles. This year it's been a struggle. There's too much inventory,'' she said. She said activity in the new car market is off between 15 percent and 20 percent and says part of it has to do with rising auto prices. She said the leasing market is still strong, but below last year's levels.
Leases bolster new car sales because they take cars out of dealers' showrooms.
Unlike 60-month payments to buy a new car, leases can be as short as two years and automotive manufacturers make deals on certain models to make leases more attractive. She said that to sell more new cars, dealers are discounting them and making less and less money. She's hoping this is just part of a trend that will reverse itself as auto manufacturers work on ways to cut costs. The average 30-year FHA market rate is expected to remain relatively stable during the fourth quarter because of an anticipated increase in rates by the Federal Reserve after the November election. Many economists thought the Fed would raise rates last Tuesday, but it left them alone.