Based on U.S. sales from all automakers, the seasonally adjusted annual rate (SAAR) of sales based on September’s final numbers is 17.54 million. The record high actual sales for any year is 17.55 million in 2016.

The SAAR calculation has risen above 18 a couple of times this year and it has fallen below 17 a couple of times. Since the beginning of January 2017, the monthly SAAR has risen above 17.3 million only twice, and one of those times came in September 2017 when the SAAR reached 18.2 million. That’s the month consumers replaced vehicles damaged or destroyed by Hurricane Harvey. According to Automotive News, it’s the fourth-best September ever recorded.

September sales were down 5.5% year over year, and the drop is almost entirely due to Hurricane Harvey. Over the first nine months of 2018, total actual sales are up 0.5% at 12.94 million. Actual September sales totaled 1.44 million light vehicles (cars, sport utility vehicles and pickups).

Only one of the Detroit Three posted a year-over-year U.S. sales gain in September. Fiat Chrysler Automobiles N.V. (NYSE: FCAU) reported total sales of 199,819 vehicles in the month, a rise of 14.5%. For the year through September, FCA’s sales total 1.68 million vehicles, up 6.4% compared with the same period last year.

Ford Motor Co. (NYSE: F) reported sales dropped 11.3% in September, and sales are down 2.4% for the year to date. Ford sold 196,496 vehicles in September and has sold 1.88 million for the year to date.

General Motors Co. (NYSE: GM) sold 235,228 vehicles in September, down 15.8% year over year. Sales for the year to date totaled 2.17 million, down 1.2% year over year. Because GM does not report monthly numbers, this figure is an estimate, but the year-to-date total is actual sales.

Toyota Motor Corp. (NYSE: TM) sold 203,098 vehicles in September, down 10.4% year over year. For the year to date, U.S. sales are down 0.4%.

Honda Motor Co. Ltd. (NYSE: HMC) sold 132,668 vehicles in September, a drop of 7% year over year. Year to date, sales dropped 2% to 1.21 million units.

Nissan/Mitsubishi sold a total of 130,524 vehicles in September, down 12%, and year-to-date sales were down 4.5%.

Volkswagen sales fell 2.6% to 55,266 vehicles in September but are up 4.7% for the first nine months of the year.

Mercedes-Benz sold 30,715 vehicles last month, down 5% year over year, and year-to-date sales are down 5.8%.

BMW sold 29,549 vehicles in September, up 0.2% for the month, and sales are up 1.7% for the year to date.

Sales of light trucks rose 2.2% in the month while sales of passenger cars dropped 20%.

Rising interest rates and higher gasoline prices could dampen U.S. demand through the end of the year and beyond. Availability of the once-ubiquitous 0% financing offers has dropped to 5.6% from 10.1% a year ago. Consumer confidence is high, however, and the U.S. economy continues to put up solid growth numbers. These downside and upside risks are pretty much in balance.

What could tip that balance are rising prices for new vehicles. Lightly used cars coming off lease will compete with new vehicles for consumers’ attention and cash. Monthly used car sales typically run about three times higher than new car sales. Industry data firm ALG estimates the average transaction price for a new light vehicle last month was $33,436, up 2.3% year over year.

Automaker and dealer incentives were slightly lower last month averaging $3,785 per vehicle, $100 less than in August according to ALG. The Detroit Three are the biggest spenders.

Jonathan Smoke, chief economist at Cox Automotive, said:

The new-vehicle market is challenged by affordability, and ironically the most affordable and most popular vehicles are imported and face the threat of new tariffs which will drive their prices higher.

Jeremy Acevedo, Edmunds manager of industry analysis added:

The trickle-down effect of elevated interest rates really started hitting car shoppers in September. While new vehicle prices continue to rise, favorable credit offerings are growing increasingly more difficult to come by. Buying conditions are far less amenable for consumers than they were before, which might come as a shock for shoppers coming back to the market for the first time in a few years.

While things might get worse, after the first nine months of 2018, things are looking pretty good. Keep an eye on the SAAR for the next few months. A couple of months in a row below the mid-16 million range could signal a downturn in new car sales. Until then, keep calm and drive on.

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