September U.S. sales fell for most major automakers from the post-Hurricane Harvey bump a year ago. But another factor is emerging as a headwind to sales: affordability for some new-vehicle shoppers.
As vehicle transaction prices and interest rates keep rising and automakers reduce incentives, analysts and dealers are signaling that the resulting higher prices for consumers could be hitting a critical point, if they haven't already.
"We've seen more of a shift to leasing because leasing payments tend to be less than buy or purchase monthly payments," said Wes Lutz, chairman of the National Automobile Dealers Association and owner of Extreme Dodge-Chrysler-Jeep-Ram in Jackson, Mich.
But higher prices are hitting leases, too. Jonathan Banks, vice president of vehicle valuations and analytics at J.D. Power, said customers who leased at the ideal time — three years ago, when interest rates were lower and residual values were higher — are returning to the market at the worst time.
"There's a lot of consumers that are kind of screwed," Banks said. "You come back to market, you're paying $299 or whatever for your Fusion or Camry, and now they want $399. That's a big deal."
But if affordability is a growing problem, automakers aren't widely sounding the alarm.