Courtesy of The Los Angeles Times
May is turning out to be another good month for car sales, according to auto research firms J.D. Power and Associates and TrueCar.com.
Both TrueCar and J.D. Power forecast that May auto sales will top 1.4 million vehicles, about an 8% increase from the same month a year earlier.
Sales are running at a healthy pace this month even before the Memorial Day weekend, traditionally one of the busiest weekends of the year for auto dealers.
Pickup truck sales are particularly strong. Truck sales are going up because of a rebound in the housing and construction trades and an improving outlook for small business.
“Full-size truck sales continue to gain momentum in May and we expect the segment to post a 22% increase, compared to the nearly 9% industry increase,” said Jesse Toprak, senior analyst for TrueCar.com.
The strong demand for pickups has pushed average transaction prices to record levels. The average transaction price for all new vehicles so far in May is $28,921, J.D. Power reported.
Low interest rates combined with the use of extended-term vehicle loans — 72 months or longer are fueling the higher prices.
LMC Automotive projects that the industry will sell about 15.4 million vehicles this year.
“This is the time of year when the automotive industry holds its collective breath as the recent past has dealt with a spring slowdown in demand. However, the current pace suggests full steam ahead for the second half of 2013,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive.
“Economic and market head winds have been minimized, while demand continues to build momentum,” he said.