This week GM and Ford are expected to report global profits, most of them coming from North America.
The Americans’ passion for pickup trucks has taken the price for such a new vehicle to $31, 000. As Americans are willing to make big purchases when it comes to trucks, automakers are able to reduce costs on cut-rate financing, rebates and other sales lures.
“People complain cars are expensive, but they also buy the most expensive ones,” said analyst Jesse Toprak of TrueCar, which tracks pricing data. “People are happy to pay more if they get more.”
Loans are beginning to get longer, and during the fourth quarter of 2012 they averaged 65 months, while those 72 months or longer accounted for 30% of the total of new-vehicle retail sales during the first half of this year, an increase from 29% during the same period in 2012. Leasing has also gone up to 24% from 21% in the first half of 2012.
The average transaction price for GM and Ford is with $2,000 higher compared with the industry average, with $33,218 for GM and $33,272 for Ford in June. Last month the average pick up was sold for $40,361, an increase of 2%.
“The stage is set for stronger growth for the rest of the year,” said Robert Dye, chief economist at Comerica Bank.