It looks great that the Seasonally Adjusted Annual Rate (SAAR) is sticking around 14.5 million 8 months into 2012. Sales are up 20 percent year-over-year. But you need to look at the footnotes to see if there is confidence in the numbers, or if there is a reason for worry.
I looked at the sales numbers and the information Truecar.com put together and saw some real strength in consumer confidence. Truecar has worked with over 4,600 car dealers, since 2005, long enough to gather year-over-year data.
Year-over-year has seen an increase in the average price of a vehicle. Truecar collated the numbers that show the industry average price for a new car is $30,274. In 2011, a year earlier, the average price for a new car was $29,846, an increase of 1.4 percent.
One of the reasons sales could be on the upward swing is financing is becoming available. Reid Bigland, President, and CEO of the Dodge brand, talked about financing at a luncheon, “now that the credit market is loosening and function a little more normally the subprime (and prime) buyer is able to get financing, where they’ve been locked out of the marketplace up until 12-18 months ago. Now they’re returning, and it’s alleviating some of that pent-up demand in the marketplace today.”