What's Driving Avis, Cars.com, and Group 1 Automotive Higher Wednesday

Shares of Avis Budget Group (NASDAQ: CAR), Group 1 Automotive (NYSE: GPI), and Cars.com (NYSE: CARS), various automotive stocks, all jumped over 10% Wednesday morning as the industry prepares for Memorial Day weekend, the first big promoted shopping event since the COVID-19 pandemic hit the U.S.

There are a number of developments that could be driving various automotive stocks higher Wednesday. Many entities are preparing for a big holiday weekend at auto dealerships. Edmunds noted that car shoppers can expect larger than usual discounts since there are more prior-model-year vehicles on dealership lots than we historically see in May, a scenario that will provide consumers larger incentives as dealers try to sell through older inventory. And there is certainly some deferred demand waiting to get back on dealership lots: Cars.com revealed Wednesday that its research showed that 33% of consumers who planned to purchase a vehicle in 2020 intend to do so this weekend. Interestingly, Cars.com's data showed that 62% of people plan to buy a car sooner than originally planned, thanks to COVID-19 -- possibly to avoid public transportation and ride-sharing services.

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Source Fool.com