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Auto Sales Hit Four-Year High; Signs Point To Continued Positive Sales

Oct 09, 2012

U.S. auto sales rose 13 percent in September, representing a sales pace not seen since March 2008. According to industry reports, sales totaled 1,188,899 light vehicles for the month, almost 100,000 more than most forecasters had expected.The seasonally adjusted annual sales rate (SAAR) rose to 14.9 million. That’s higher than the cash-for-clunkers 14.6 million SAAR in August 2009 and the best since the near-15 million mark in March 2008. And it seems most of the ingredients are in place for a continued surge in U.S. auto sales this Fall.Part of the positive outlook is the sheer necessity of consumers to replace aging vehicles. According to Experian Automotive, the average car or truck on U.S. highways is now 11 years old and, according to J.D. Power and Associates, the average trade-in vehicle is now more than six years old.Low interest rates and other attractive loan terms are also becoming more prevalent. According to Experian, the average interest rate on a new-vehicle loan was only about 4.6% in the second quarter.With the new model year vehicles arriving on dealer lots, it will become more and more vital to move the older models. This may lead to an increase in manufacturer incentives later in the Fall.