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Auto Sales Declining in Florida and Many Other States

Florida Auto Insurance - Florida Personal Insurance

The number of households that do not have a car has become more common than 5 years ago. According to the American Census Bureau, there was an increase of about 500,000 more households that decided against owning or leasing a vehicle between 2010 and 2015, than in previous years. Furthermore, U.S. car sales fell in 2017 for the first time since 2009.

Many experts have predicted this trend as millennials reject the U.S. car-buying culture and ride-sharing services, such as Uber or Lyft, disrupt the auto industry. Surprisingly, the shift is happening in many states, some of which have a high rural population (such as Maine and Vermont), which demonstrates that car-free living isn’t just an urban hipster trend. Florida ranks sixth in the country with a 6 percent increase in the number of households who are car-less.

While experts aren’t completely sure what is stimulating the shift, several indicators have been noted.

  • Perhaps the biggest change has come due to the advent of ride-sharing apps making it easier for city-dwellers to function without owning a car
  • There is a decrease in the number of younger drivers getting licenses
  • Many cities are building up transit alternatives, such as public or shared transportation
  • Car share services avoid issues like parking, tolls, traffic congestion and the financial burden of car ownership

The reduction in car ownership in the U.S. has caused car production to outpace the demand. Car dealers are offering larger discounts and incentives to win sales. This leaves car manufacturers with two options. One is to cut car production, which will lead to job cuts, or increase discounts to maintain sales – causing them to earn less or post losses.

The auto industry makes up about 3 percent of the nation’s Gross Domestic Product (GDP). The GDP is one of the main indicators used to measure the country’s output and is considered a barometer of the health of the economy. When the auto industry is in decline, it hurts the GDP. Several auto makers, such as Toyota and Ford, have admitted that their forecasting expects the entire industry to continue to decline. So far, the reduction in auto sales has proven to be manageable for the economy, but experts don’t know what the future holds for the auto industry.

In order to combat the decline in auto sales, some auto makers are considering developing other types of mobility devices, such as scooters and electric bikes. Other companies,  such as GM are developing their own car-sharing services. Ford is planning to partner with public transportation and bring autonomous taxis to the market as soon as 2021.

When it comes to insurance for your transportation vehicles, whether it is auto, truck, or recreational, contact the experts at Lanier Upshaw to learn about our customized insurance solutions.