Car Market Changing Direction
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The car market is withstanding various changes due to changes in consumer preference and other factors. Different car companies announced lower production due to lower demand. The new car sales are about 6% lower in June than a year ago in the United States. The overall car sales are even with a larger fall.
On the other hand, the electric car sales seemed to be going further up. Electric car sales have jumped for BMW. Moreover, they represent about 7.9% of the total car sales for the company. At the same time, after Hertz filed for the bankruptcy, the company is selling thousands of its used cars at very cheap prices. There are approximately 700,000 cars in the company’s fleet. Some cars have been selling for $1,000 to $2,000 below the market prices of about $7,000. Meantime, the continued offers by car companies and dealers are shaking up the market of cars, which brings us to the way the consumers view car sales. The changes in their opinions of what to purchase is occurring.
One of these changes is whether to lease or buy a car. Many people are considering lease options rather than buy options compared to the few months ago. Some cars such as Toyota 2020 Yaris purchasing price start at $15,000 plus. Sometimes the signing amount is about $2,000. While, leasing is an attractive option to many. Honda 2020 Acura ILX can be leased for $229 a month. Various models can go as low as $139 with sedans lease price usually not being above$300 a month. Toyota Corolla lease is about $209 a month. The effective monthly costs are about $270.
Car companies which sell online such as CarMax (NYSE:KMX) and CarGurus (NASDAQ:CARG) have seen a jump during certain announcements in stock price in June. At the close of the month, the share price of KMX was at 89.05 US dollars while of KARG printed at 25.25 at the end of the month of June. The changes are seen below for the month of June.
KMX 89.05 +1.71%
CARG 25.25 -2.42%
The reduction in sales did not occur only in the United States. In other countries, such decline has also occurred. For example, UK economy had the largest monthly fall on record with 20.4% decrease in April.
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