Car prices hit a record in August as sales jump
Shoppers paid $31,252 on average for a new vehicle, according to TrueCar.
Auto sales increased across the board in August, with most carmakers' results beating The Street by 5% to 7%, CNBC's Phil LeBeau reported on Wednesday.
Stronger consumer confidence, big Labor Day sales and low interest rates on leases and loans drove that growth, LeBeau said. And while vehicle sales jumped, so did their price tags. The average transaction price hit a record $31,252 last month, according to TrueCar.
"Historically low interest rates as well as very attractive lease specials fueled by high resale values are enabling consumers to buy more expensive vehicles while still keeping payments at affordable levels," Jesse Toprak, a senior analyst at TrueCar, told USA Today.
Kelley Blue Book reported that the average transaction price is even higher, at $31,657. That figure is not a record, however, but a drop or 0.4%, or $138, from the previous month, according to KBB.
BMW brand sales saw one of the largest jumps in August, increasing by 45%. Honda (HNDAF) sales increased by 27%, Toyota (TOYOF) by 22.8%, Nissan (NSANF) by 22.3%, Mercedes by 20.5% and Chrysler by 11.5%.
General Motors (GM) sales increased 14.7% in August, compared with the expected 11%. GM brands all saw double-digit growth, with Cadillac increasing by 38%, Buick by 36.9%, GMC by 14.2% and Chevrolet by 10.4%.
Kurt McNeil, vice president of U.S. sales for General Motors, said he expects the growth to continue through the back half of the year.
"We continue to see the industry grow, slow steady growth, the positive economic factors we think outweigh any of the small, little speed bumps along the way," he said in the CNBC report.
One strong product last month was the Chevrolet Volt, thanks mostly to a $5,000 price cut. Its sales were up about 18% and 11% year-to-date, according to McNeil.
"We're finding great new ways to take cost out of the vehicle, passing some of that along to the consumer, which is always a good thing," he said in the report. "And it's still bringing great new consumers into General Motors showrooms."
GM has 60 days of inventory, so it's not likely to speed up production in the fourth quarter, according to McNeil, who said the company is "very much on plan." Others, like Ford (F), are eying an increase.
Ford sales increased by 12.7% in August. LeBeau said the company is now planning to hike fourth-quarter production by 7%, or about 50,000 vehicles, to about 785,000 vehicles. That will mark the highest quarterly production under CEO Alan Mullaly, according to LeBeau.
Demand is spread across segments as well as brands, according to LeBeau. Luxury and low-end cars as well as pickup trucks saw growth last month. "Ford sold an F-series pickup every 42 seconds in the month of August," LeBeau said. "That is an astounding statistic."
The monthly sales pace for August was 16.09 million vehicles, according to LeBeau, marking the first time since November 2007 that it has topped 16 million.
Besides obvious market losses and divorce law, one of the factors blamed in the average American's inability to retire is their fondess for new automobiles.
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