Speed Bump Ahead for U.S. Car Sales

Investing.com - Higher interest rates and tax changes are likely to slow U.S auto sales in 2018.For the first time in four years, new car sales are expected to fall below the 17-million mark.Fitch Ratings is forecasting sales of 16.8 million in 2018.A record 17.55 million vehicles were sold in the U.S. in 2016, thanks to a strong economy.Analysts, however, say the best years are behind the industry, with several factors bound to hurt new-car sales.For one, higher interest rates mean higher monthly payments for the millions of consumers who took out a loan to buy a vehicle.And though the tax cut package lowers rates for individuals, the plan reduces the amount of state and local taxes people can deduct from their federal taxes, leaving less disposable income for consumers in high tax states.Analysts say an unusually large amount of pre-owned vehicles will hit the market this year, and their lower prices will attract consumers looking to make a purchase. "