Biggest Sales Month of the Year Still a 7 Percent Drop from a Year Ago

December is not stacking up to year-ago numbers for sales of new vehicles, but the final month of 2016 was the best in more than a decade.

Ford dealership
Frank Duenzl—Frank Duenzl/picture-alliance/dpa/AP Images

U.S. car dealerships are having their best sales month of the year, but it's not stacking up to last December, the industry's best month in more than a decade.

New-vehicle sales are likely to decline 7 percent year-over-year to 1.57 million units this month, resulting in 17.6 million seasonally adjusted annual rate, or SAAR, estimates Kelley Blue Book.

"December should be the biggest sales month of the year, and despite our expectations for significant year-over-year declines, the projected SAAR of 17.6 million would be the third highest of the year," said Tim Fleming, a KBB analyst. 

Still, the year-ago comparison should be put in perspective, said Fleming, who noted that December 2016 was the strongest month in almost 15 years.

"We're still expecting a year-end sales push from many manufacturers, which will translate into incentives and discounting, but since the sales objectives should be reduced from last year's peak, we are projecting slower sales than last December," he added.

The December 2017 estimate, while down from the year-ago month, is up 13 percent from last month, according to KBB. Retail sales are expected to make up 82.4 percent of volume this month, down from 82.8 percent in December 2016.

After a record year in 2016 and seven straight yearly increases, KBB expects sales for 2017 to come in at 17.1 million, down 2 percent from last year and the fourth-biggest sales total ever. For 2018, Cox Automotive, Kelley Blue Book's parent company, projects new-car sales of 16.7 million.