Auto sales stay strong in September, rise 13 percent
DETROIT -- Americans found plenty of reasons to buy new cars in September, making auto sales a bright spot in the economy for yet another month.
Total U.S. sales rose 13 percent from a year earlier to nearly 1.2 million. If they stayed at that pace, they'd reach 14.9 million this year. Sales rose for most carmakers, led by big gains at Toyota, Honda and Volkswagen.
Low interest rates, aging vehicles that need to be replaced and appealing new models are the main drivers of this year's consistently strong sales, says Jessica Caldwell, an analyst for the Edmunds.com automotive website.
"That's a good combination to get people shopping again,"Caldwell says. "That's really what sells cars."
Record-high gas prices shifted buyers away from trucks toward smaller cars. Sales rose 40 percent or more for the Chevrolet Cruze, Ford Focus, Toyota Corolla and other compacts. Gas prices have jumped 14 percent since July 1, and hit $3.79 per gallon at the end of September, a record for that time of year. Small cars now make up 23 percent up new-car sales, up from 21 percent in July, according to Ford's top U.S. sales analyst Erich Merkle.
Here are the factors that drew buyers to dealerships in September:
FINANCING: Low-interest loans are easy to get again, now that banks have loosened lending. New car loans carried an average interest rate of 4.05 percent in September, the second-lowest rate after December 2011, according to Edmunds.com, which started collecting data in 2002. People with good credit can get a 2-percent rate from a bank or credit union.
NEW MODELS: New vehicles always pique buyers' interest, and there are a lot of them hitting the market now, including redesigned versions of big sellers like the Honda Accord, Nissan Altima and Ford Escape. Sales this year have also gotten a boost as Toyota and Honda reentered the market after the Japanese earthquake.
CONSUMER CONFIDENCE: Consumer confidence, one of the biggest factors influencing car-buying, jumped in September to the highest level since February. It was bolstered by a brighter outlook for overall business conditions and hiring.
AGING VEHICLES: Many Americans have to buy a new car because their old one is on its last legs. The average age of a car or truck on U.S. roads is approaching a record 11 years. Even people who buy new cars are keeping them for almost six years before getting rid of them, the longest time ever, Polk says.