expected a rise of less than 9% in U.S. sales but the actual increase was 13%. Cheap financing helped fuel the increase in sales. Almost a third of Toyota purchasers took advantage of no interest loans to finance their purchases.
Analyst Jesse Toprak
"The money is so cheap now... Higher resale values and cheap money has been enabling automakers to offer some of the most attractive leasing programs we've seen in years."
Interest rates on a 4 year new car loan were around 3.19% in September 2012 compared to 4.29% in September 2012 according to Bankrate.com.
Consumers delayed purchasing big ticket items during the recession. Average age of vehicles being driven rose to record highs. Now, as consumers need to replace their old vehicles and the economy begins to recover, auto sales are improving.
As fuel prices rise and consumers are less affluent, sales of smaller cars have surged. GM claimed that sales of its small and compact cars almost doubled in September. While Ford saw its sales virtually flat, its small car sales rose about 73%. Don Johnson, the Chevrolet sales chief, says that there is a definite trend toward purchasing cars over trucks.
Toyota had the largest increase in sales in September up a whopping 41.5%. from last September. Honda also saw a big rise of 31%. Of the U.S. big three, Chrysler did the best with a 12% increase. Chrysler, is now a subsidiary of the Italian car maker Fiat
. Sales of the Fiat brand jumped 50% in September. The small efficient cars may be gaining a U.S. customer base. GM followed with a 1.5% gain but Ford sales were almost flat over a year earlier. Volkswagen also did well with a 34.4% increase. Nissan suffered a slight decline in sales.
No doubt, as fuel prices remain high, sales of small and more fuel efficient vehicles will increase as cash-strapped consumers are forced to replace their aging vehicles.