Car sales continue to heat upDate posted: 7/24/14 10:00:00 AM
How fast are cars selling from dealership lots? According to a report from USA Today, summer auto sales have been so strong that many dealers are running out of their newest models.
More than a dozen models from various car manufacturers spent fewer than 30 days on dealers' lots before being snapped up by buyers. That's about half the average automakers consider to be the best rate of sales. Many of those in-demand models are luxury SUVs and performance cars, according to Kelley Blue Book.
Ford sales analyst Eric Merkle said larger vehicles are gaining popularity as gas prices have moderated. Merkle told USA Today it is "a very hot new vehicle ... in a really hot segment." He added that there is only an 11-day supply on lots of the new Lincoln MKC compact crossover.
Chrysler has noticed similar demand. With buyers coming to dealership lots in hordes, the company is lacking the appropriate inventory for its Ram pickups, Jeep Grand Cherokees and Wranglers.
Meanwhile, General Motors can't keep its Chevrolet Corvette or its biggest SUVs such as the Cadillac Escalade, GMC Yukon and Chevrolet Tahoe on lots.
"Every one we get, we're selling," Inder Dosanjh, a GM dealer in Dublin, California, told USA Today. "No rebates, no special leases, not even $100 off the car."
Dosanjh said he has pre-sold all the Escalades that he has been able to get a hold of.
Homeowners who are interested in buying a new car but don't quite have the funds for a major purchase should consider a home equity line of credit. This line, offered by a bank or financial institution, asks a homeowner to put their home down as collateral for a line of credit that can be used toward a payment on a car, home renovations or student loan repayment.
Sales are hot everywhere in the car industry
The total sales of new vehicles looks to be on pace to pass May for the highest monthly sales total in 2014, according to a monthly sales forecast produced jointly by J.D. Power and LMC Automotive.
The prediction is that total light-vehicle sales will reach nearly 1.5 million units in August, a 3 percent increase compared to August 2013.
John Humphrey, senior vice president of the global automotive practice at J.D. Power, said the robust sales pace goes to show the auto industry is healthy and thriving.
"We expect consumer spending on new vehicles in August to approach $39 billion, the highest level on record for the month of August and second-highest month ever behind July 2005 ($39.7 billion)," Humphrey said. "The record consumer spending is fueled by both high sales volumes and high transaction prices."
The joint prediction from J.D. Power and LMC Automotive expects retail car sales in August to reach 13.6 million units, an increase of more than 100,000 from the selling rate in July. The seasonally adjusted annualized rate in August is the sixth straight month where the rate has surpassed 13 million.
Sales should surpass 2013 figures
Jeff Schuster, senior vice president of forecasting at LMC Automotive, believes auto sales should hit 16.3 million units for total-light vehicle sales. If that comes to fruition, it would be a five percent increase over 2013.
"As a very robust summer selling season winds down, optimism continues in the auto industry for the remainder of 2014, with expectations of economic growth beginning to catch up to the growth in autos," Schuster said.
Another reason for industry confidence has stemmed from reduced factory shutdowns. Auto factories throughout North America produced 1.2 million vehicles in June 2014, a 17 percent increase from the same month the year prior.
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