Trump vs. Biden Race Influencing U.S. Auto Sales: Report

The auto industry could sustain significant changes depending on how the upcoming presidential election goes, according to a report from Cox Automotive released today.

Experts predict that the state of the economy could hinge on the results of the 2024 election, with everything from interest rates to inflation up in the air as either President Joe Biden or former president Donald Trump seek a second term.

Because of economic uncertainty, many Americans have put off making big purchases on things like homes or cars. Inflation still stands above 3 percent, and many are hopeful interest rates will come down in the near term.

“If shoppers believe interest rates will be lower in the future, or that the economy will be improving, or worsening, postelection, they are more likely to stay on the sidelines, waiting for the dust to settle,” said Vanessa Ton, senior manager at Cox Automotive, as reported by Reuters.

The uncertainty around the presidential election also puts a wrench in many Americans’ plans, but this fear could dissipate once the election is settled. Ultimately, this could turn the auto industry, as well as the housing market, into a waiting game.

“There is a view from consumers now that if they wait, they’re going to get a better price,” Charlie Chesbrough, a senior economist for Cox Automotive, said in a news conference Tuesday.

Roughly 74 percent of consumers and 81 percent of car dealers said the election will impact inflation, but not everyone is convinced of how exactly vehicle sales could shift.

The report found 38 percent of car dealers believe the election will cause sales to worsen, while 31 percent said sales will get better or keep roughly the same.

The price of your car could also change in the months following the presidential election, or at least that’s what most consumers believe, according to the report.

A little more than 40 percent said vehicle prices would increase after the election, with 33 percent saying it wouldn’t likely change prices.

Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, said some of these predictions around the impact on auto prices could be misguided.

“Regardless of who wins in November, it’s highly unlikely we’ll see a significant dip in automobile prices any time soon,” Beene told Newsweek. “We’re anticipating interest rate cuts will come at some point in the next year. The Biden Administration will advocate for the current overview the Fed has offered, meaning interest rate drops will be small and gradual.”

Similarly, any price increases would likely be small and gradual as buyers begin to enter the market and are enticed by lower interest rates over time.

If Trump won the election, there are a few more questions concerning his potential influence on interest rates and the auto industry at large, though.

“With a Trump Administration, it’s a tad more difficult to predict if this outcome would be the exact same or vary,” Beene said. “During the first Trump term, lower interest rates were what was advocated for, and it’s possible a second term would do the same.”

Beene cautioned consumers from celebrating the possibility of lower interest rates too quickly, however.

“While that sounds good on paper, a sudden and perhaps dramatic decline in interest rates would more than likely lead to a sudden and dramatic increase in prices, as well.

“The bottom line is if you’re waiting for election night to determine whether you should purchase an automobile or not, you need to use a better indicator, which is ‘Do I need a new automobile at this moment or can I get by with what I have?'” Beene said.