DETROIT -- Early economic indicators signal U.S. car dealers will sell more vehicles this year, but not on the new-vehicle side.
It will be a good year, but "it's an 'Oh, shift, moment,' " with credit being the most important thing to watch, Cox Automotive Chief Economist Jonathan Smoke told the Automotive News World Congress here last week.
Smoke forecasts 16.7 million new vehicles will be sold this year, down from 17.1 million in 2017. But that dip will be offset by a 500,000-unit rise in used-vehicle sales to 39.5 million, he said.
Smoke is expecting that higher interest rates and tighter credit this year will drive many consumers to buy a used vehicle instead of a new one. Most of those buying used cars will be millennials, who are often saddled with student loans and remain credit challenged, he said.