✓ Link copied to clipboard! The number of new cars sold in the U.S. in September 2024 is expected to be less than the number sold in September 2023. But, there's good reasons why that's not bad news, experts say. J.D. Power and GlobalData projected in their joint September forecast retail and non-retail new vehicle purchases for September 2024 to be 960,500, down 13.2 percent versus September 2023's numbers (1,129,659 units). September sales are expected to be down in large part due to the timing of Labor Day weekend. Auto sales calendars do not follow traditional Sunday through Saturday, first of the month through the last day of the month standards of measurement. Rather, they look at selling days. More From Newsweek Vault: Is an Extended Car Warranty Worth It? "U.S. light vehicle sales in 2024 have been against a conflicting backdrop: Inventory has improved, incentives more available," Stephanie Brinley, associate director of AutoIntelligence at S&P Global told Newsweek. "However, vehicle prices are receding very slowly and interest rates remain high. Over the course of 2024, buyers seem to be increasingly cautious, tempering growth potential. The situation means that 2024 light-vehicle growth is slower than what we saw in 2023, when there was slowly recovering inventory market and less uncertainty." How does this benefit buyers? "From a consumer perspective, three key factors will shape auto sales for the remainder of the year: discounts (from both manufacturers and dealers), interest rates, and trade-in values," Tony Salerno, managing director and practice leader of automotive advisory and analytics at J.D. Power told Newsweek. Buyers could be in for big discounts heading into the holiday season. "While part of this is due to a shift toward more affordable vehicle segments, the bulk of the reduction comes from original equipment manufacturer incentives and dealer discounts. Most automakers have managed their inventory levels fairly well, but if days supply begins to increase, we can expect to see more incentives," Salerno said. J.D. Power and Global Data projected that average incentive spend in September 2024 per vehicle has grown 63.2 percent from September 2023. It is currently on track to reach $3,047. Challenges continue for car dealerships Buyers are shifting their behavior into more affordable models, Salerno said. This has lead to over a $1,000 drop in average transaction price per vehicle according to J.D. Power. "Transaction prices are trending towards $44,467—down $1,296 or 2.8 percent—from September 2023. The combination of lower retail sales and lower transaction prices means that buyers are on track to spend nearly $40.4 billion on new vehicles this month—16.8 percent lower than September 2023," the company's press release reads. On top of that, inventories are up. "Retail inventory is projected to be 1.8 million units, a 6.2 percent increase from August and a 30.7 percent increase from September 2023. Rising inventories are leading to larger discounts from both manufacturers and retailers. However, the inventory situation continues to be inconsistent across brands and models, with some popular vehicles remaining in short supply," King said. Increased inventories are directly related to fewer vehicles arriving on the lot pre-sold by retailers. J.D. Power has forecasted that about one-third of those vehicles will sell within 10 days of arrival, down from 58 percent in March 2022. The companies project that dealer profits will be down 29 percent in September 2024 versus September 2023 when the numbers are tallied. How much are Americans paying per month for their new car? J.D. Power and Global Data expect Americans will be spending an average of $734 per month on their vehicle purchase. This is up $11 from September 2023, despite lower interest rates. Pandemic era leasing behaviors set up today's woes When new vehicles were in short supply during the COVID-19 pandemic, buying options were limited. And, many chose to cut short or run out their leases without replacing a household vehicle due to a lack of commuting. "Lease expirations this September are down 28 percent from the prior year, leading to fewer opportunities for new sales as consumers have more discretion when to trade-in their vehicles – many of which are waiting for better deals," Salerno said. U.S. Federal Reserve Chair Jerome Powell holds a press conference in Washington, DC, on September 18, 2024. On Monday, Powell said interest rate cuts can continue if the U.S. economy continues to evolve as expected.... U.S. Federal Reserve Chair Jerome Powell holds a press conference in Washington, DC, on September 18, 2024. On Monday, Powell said interest rate cuts can continue if the U.S. economy continues to evolve as expected. More