New light-vehicle sales in September 2023 increased year-over-year for the 13th straight month. September 2023’s SAAR of 15.7 million units represents an increase of 14.4% compared to September 2022. Raw volume in the third quarter of the year totaled 3.95 million units, up 16.8% compared to the third quarter last year. According to Wards Intelligence, fleet deliveries represented an estimated 16.1% of total sales in September 2023, up slightly compared to August 2023’s 15.1%.
Sales would have likely been slightly higher in September were it not for the ongoing UAW strike and its impact on light-vehicle production. So far, impacts to production have not been significant enough to slow sales, but October’s sales results could be impacted if the strike continues to expand during the month. New light-vehicle inventory on the ground an in-transit totaled 1.93 million units at the start of September. We expect new light-vehicle inventory to fall somewhere between 1.9 and 2.0 million units by the time final inventory data for September are tallied.
According to J.D. Power, the average monthly payment on a new vehicle finance contract is expected to total $726 in September 2023. The average monthly payment has increased by $15 compared to September 2022 primarily to due higher interest rates. The average interest rate on a new vehicle finance contract is on pace to be 7.3%, an increase of 162 basis points year-over-year. Payments have risen despite a slight decrease in the average transaction price, down $94 year-over-year, and higher OEM incentive spending. J.D. Power expects that average incentive spending per unit will total $1,802, an increase of 82.8% compared to September 2022, but down roughly $100 compared to August 2023.
Looking ahead into the final quarter of the year, we expect that new light-vehicle sales should continue at similar levels that we’ve seen throughout the year. With the total duration and breadth of the UAW strike still a big unknown, it’s difficult to estimate just how much new light-vehicle sales will be impacted yet. Still, we expect that new light-vehicle sales will increase significantly compared to 2022. Our forecast for sales in 2023 has increased slightly to 15.4 million units.
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