The auto industry is celebrating another stellar month. In August, propelled by cheap leases and Americans in a buying mood, it sold cars at a rate that translates to more than 16 million vehicles a year. In other words, it's back to pre-recession 2007.
For the month, it was 1.5 million cars sold. What Americans buy isn't changing much, with the Ford F-150 holding onto the top spot with sales up 22 percent (the best month since 2006). Home construction is also booming, so the demand for work trucks is soaring, and Ford moves an F-150 every 42 seconds these days. Ford also sold 8,292 electrified vehicles in August, up 288 percent over the same month in 2012.
The Toyota Camry is still the most popular car out there, though the revamped Honda Civic soared 58 percent and the Toyota Prius, a Top Ten best seller, is moving briskly (up 29 percent).
People appear to be bargain shopping, and why shouldn't they be? According to Edmunds.com Senior Analyst Michelle Krebs, "General Motors and Nissan showed this month that announcing price cuts drive sales. GM re-priced the Chevrolet Volt in August and sales soared to its highest levels ever. Nissan cut prices some months ago on seven models including its core ones, and Nissan had sales up 22 percent."
Car buyers were also snapping up bargain leases. I've reported here that $199 leases were helping move a host of electric cars, but they're moving conventional cars, too. The average lease payment now is $408, down from $416 last year, and at some dealerships one out of three cars is leased. Want to pay $199 a month? Look at the Chevy Malibu, the Honda Accord and the (totally hot) Toyota Camry, which sold 44,713 last month. The Malibu is up 16.5 percent, and the Accord 10.8.
If I were buying a new car, something I really have to do one of these days, I probably wouldn't actually buy it — leases are the way to go, particularly with the EVs I'd likely consider. You don't particularly want to own a lithium-ion battery, because its replacement cost is currently very high and new, better technology is right around the bend. Smart, for instance, has Battery Assurance Plus that guarantees the cell capacity for a whopping 10 years.
Almost all automakers did well in August, but Volkswagen — with the misfortune of not having many new models in showrooms — was still down, 1.6 percent in August, 3.3 percent in July. Everybody wants the newest, shiniest cars. The average transaction this month was $31,252, says TrueCar, which shows many buyers are going upscale.
As at the end of World War II, pent-up demand is fueling the stellar car sales. The average vehicle on the road today is 11 years old, so no wonder people who just got rehired or are feeling good about the economy are ready to put money down. If I had a 2002 Corolla with 150,000 miles on the clock, I'd consider trading it in, too.
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