Following the usual Black Friday auto deals festival and owing to the recent state of great health, the November figures are expected to be very positive, further signaling the recovery the US auto market has been going through.
With the latest predictions and forecasts that take into consideration the soon to be unveiled November figures, the seasonally adjusted rate for 2014 is at the higher end of 16 million and the consensus is that in 2015 it would pass above the 17 million units mark. There are skeptics though – saying the pace of growth is unsustainable in the long-run and that automakers’ finance arms and banks are relying too much on the expansion of subprime lending.
While easy credit should always be watched and closely regulated, it’s not particularly worrying today mostly because the industry and the financial aggregators have changed their strategies after the 2008-2009 economic crisis. Also, there are two main drivers of growth for new car sales. The first and most important is the average vehicle age – which has reached a record 11 years high. The second one is that with an improving economy comes together with an improving household budget. First of all, the Great Recession changed a traditional fact – Americans don’t drive old cars. So, with the economic crisis firmly in the past, the motorists revert to their habit of changing their cars faster. Secondly, as the unemployment rate takes a dive, hiring is growing again and households shed debt, buyers can think of the much anticipated car purchase.
Via Business Insider