According to recent automotive industry reports, car prices are on the rise and so are sales.
TrueCar recently issued a report estimating that the transaction price for light vehicles sold in the United States averaged $31,125 in June, up 2 percent on a year-over-year comparison and 0.5 percent on a month-over-month comparison. Experts attribute strong sales to high consumer confidence and price increases to the preference for the "high-contented" vehicles being offered at car dealers today.
"Consumer confidence is continuing to fuel demand for new vehicles and consumers' preference for high-contented vehicles is sending prices higher," said Jesse Toprak, senior analyst for TrueCar. "Ford and Honda are both at record highs, and GM is $1 shy of its highest-ever average transaction price, which has brought the industry average to its second-highest level ever. Our data shows the only month with a higher industry average transaction price was December of last year."
The report showed that the most expensive vehicles in June were sold by Volkswagen at $33,802, followed by Ford, General Motors, Chrysler, Toyota, Nissan, Honda and Hyundai/Kia.
As the economy took a turn for the worst in 2008, many Americans put off a new car purchase. As a result, demand for new vehicles has been building and now with increasing consumer confidence and a stable economy, Americans again feel comfortable to make a purchase. Therefore, automakers know they do not have to convince consumers with high incentives to make a purchase, since they are already likely to do so.
TrueCar reported that the average incentive for light vehicles was $2,537 in June, accounting for a decrease of 0.6 percent on a year-over-year comparison and 4.4 percent on a month-over-month comparison.
While the selling price has increased for new cars on the market, drivers are encouraged to take extra precautions to ensure their vehicle looks clean. Husky Liners® custom fit floor mats not only keep a vehicle's interior spotless, but they also making cleaning up easy. This ensures that if you sell your car later on down the road, the interior will be one aspect to help you get the highest price.
June sales increased nearly 8 percent
TrueCar also issued a report expecting that June sales are expected to reach 1,380,543 units, up 7.8 percent on a year-over-year comparison and down 3.9 percent on a month-over-month comparison. This translates to a seasonally adjusted annualized rate of 15.7 million new car sales in June, up from 15.3 million a month before and up from 14.4 million a year before.
"Despite the lackluster performance in financial markets in June, new vehicle sales reached their highest levels in six years – yet more proof that the recent surge in consumer demand is real and not going anywhere," said Jesse Toprak, senior analyst for TrueCar.com. "The better news for the automakers is that they are back to selling nearly 16 million units a year collectively while spending less on incentives, thanks to the best selection of vehicles ever in their showrooms; product is the king once again."
Edmunds on the same page
A separate report from Edmunds.com showed that they expect a similar sales month in June. According to the automotive website, June sales are expected to reach 1,365,496 in June, down 5.3 percent from a month before but up 6.3 percent from a year before.
"Within the last month we saw a slowing stock market and a stalled unemployment recovery, but the automotive market continues to shine through it all," said Edmunds.com Senior Analyst Jessica Caldwell. "The first half of 2013 was every bit as strong as the auto industry could expect at the beginning of the year, and there's no reason why the next six months can't maintain the same momentum."