Maryland new-car sales continued at a healthy pace in April, surprising even those dealers who usually are die-hard optimists.
The public bought 36,452 new cars and light trucks during April, an increase of 6.5 percent from sales in April 2001, according to figures released yesterday by the state Motor Vehicle Administration.
It was the ninth increase in the past 10 months, and the best April in 11 years.
"Business has been very good. There's no question about that," said Peter Kitzmiller, president of the Maryland New Car and Truck Dealers Association, a trade group representing most of the state's 350 new-car dealerships. "They are better than we expected.
"The economy of Maryland has got to be a big part of what's going on," he added.
Kitzmiller said that most dealers had expected sales to drop during the early part of the year because of the popularity of the zero percent finance plans that were initiated after the terrorist attacks in September.
"Everybody thought we were pulling car buyers ahead by three or four months," Kitzmiller said. "We thought we were tapping future sales late last year. But that doesn't seem to be the case."
Used cars, a key part of most new-car dealerships' business, also continue to sell at a robust pace.
According to the MVA, motorists bought 59,817 previously owned vehicles in April. This represented a gain of 13.3 percent over used-car sales in April 2001.
Used cars always outsell new models by a big margin, primarily because of their lower purchase price.
The average new car cost $23,540 last month. That compares with $7,133 for the average used car.
There are other factors feeding the new-car buying spree in Maryland and the rest of the country, according to George E. Hoffer, an economics professor with Virginia Commonwealth University in Richmond and an auto analyst.
"First of all," he said, "cars are more affordable today. Ten years ago it took 30 weeks of median family income to pay for the average new car, today that's down to 23 weeks."
Hoffer said the popularity of leasing has also been a boon to dealers. He said the way leases were structured consumers are forced to pay "an unrealistically high price" at the end of the lease if they want to buy their cars. "This means that a great many people are being forced into the market whether they want to or not."
Incentives didn't end with the demise of General Motors' popular zero-percent financing plan. Hoffer said manufacturers are still offering rebates as high as $3,000 and $4,000 on selected models.
He said rebates have also been altered to appeal to a wider variety of motorists. He said there are financing plans that save money for persons who borrow to pay for a vehicle and lower vehicle prices for those who pay cash.