New vehicle sales on pace to be best since 2008

Consumers lured to showrooms by low interest rates.

Man, 68, drowns at Caesar Creek Lake
5/26/12
Water rescues prompt warning from health officials
5/25/12
Beach Waterpark sued for failure to deliver
5/25/12
Raleigh Trammell’s defense opens in felony trial
5/25/12
UD to move satellite campus to Dublin
5/25/12
> More headlines

By Thomas Gnau and Cornelius Frolik
Staff Writers 8:33 PM Sunday, December 11, 2011

DAYTON — Propelled by a strong November, new auto sales in the United States are on pace to reach about 12.7 million this year, which would be the largest amount sold since 2008, according to industry estimates.

The improving sales suggest some consumers who have postponed the purchase of new cars and trucks are being lured to showrooms by low interest rates, fully stocked inventories, and the high value of trade-ins, automotive analysts said.

“Sometimes people can upgrade to a newer vehicle that is economical, safer, (has) better fuel-mileage and greener and end up paying less than what they are currently paying because they get out of a higher interest rate,” said Tim Doran, president of the Dayton Area Auto Dealers Association. “We are seeing some pretty good floor traffic.”

Across the country, light vehicle sales through the end of November were 11.53 million, up 10.4 percent from the same point in 2010, according to Autodata Corp.

About 994,721 passenger cars and light trucks were sold last month, up 14 percent from November 2010.

The pace of sales last month was greater than any month since the “cash for clunkers” program, which gave consumers an incentive to trade-in their old vehicles and buy ones, analysts said.

Auto dealers are expected to sell 12.7 million light vehicles this year, up from 11.5 million in 2010 and 10.4 million in 2009, according to WardsAuto Group. It would be the most vehicles moved since 2008, when consumers purchased 13.19 million new cars and trucks.

Consumers “are feeling more confident about making a big-ticket item purchase,” said Jesse Toprak, vice president of industry trends and insights for TrueCar.com, a publisher of new car transaction data.

Ohio’s auto market is also on the road to recovery. There were 434,990 new-vehicle registrations in Ohio in 2010, up 9.5 percent from 2009, according to the most recent data from the National Automobile Dealers Association.

Still, new-vehicle registrations fell short of 2008, when owners registered 487,357 cars and trucks, the association said.

Not only are buyers buying more, they’re paying more. Thomas King, a senior director with auto industry information services company J.D. Power & Associates, said the average new car selling price in 2006 was $26,000. Today, it’s nearly $28,000, he said — a result of the industry’s transition to a lower-volume, higher-price business model.

J.D. Power also tracks the average age of used vehicles traded in for new ones. King said the average age of vehicle trade-ins in 2006 was about five and one-half years. Today, it’s more than six years, he said

With the average age of vehicles on U.S. roadways approaching 11 years old, many consumers are concerned about breakdowns and are deciding it is time to replace their aging vehicles, analysts said.

“A lot of people get a new vehicle because they cannot stand the unknown,” said Doran, with the Dayton auto dealers association. “It’s, ‘I think my vehicle’s running fine, but boy, I don’t want to have any big problems with it.’ ”

There’s not only greater consumer confidence, but greater need, said Larry Taylor, owner of Vandalia’s Beau Townsend Ford. “A pent-up demand” is driving new-car sales because motorists can keep their vehicles going for only so long, he said.

Another contributing factor is the high value of trade-ins because of limited supplies of used vehicles, said Susanna Gotsch, industry analyst with CCC Information Services, a provider of data and software services.

About 60 percent of new vehicle sales include a trade-in, and consumers are getting more in return for their used cars and trucks because people are holding onto their vehicles longer, shrinking the pool of used ones available, she said.

Jeff Reichard, of Dayton’s Reichard Buick GMC, said his service business is up 7 percent this year compared to last. And his parts distribution business is doing well.

“It’s a revenue generator,” Reichard said of his parts distribution business, which delivers parts to other dealers, as well as body and service shops within a 100-mile radius.

Share this article