August 2013 Looks to Be the Biggest Month Ever for New-Car Sales

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Patrick T. Fallon / Bloomberg / Getty Images

“It’s a good time to be in the car business,” says one car dealership owner in Wisconsin. This isn’t just part of some sales spiel either.

“People just seem ready to do something,” Wally Sommer, whose family owns Buick-GMC and Subaru dealerships in Mequon, Wisc., explained to the Milwaukee Journal Sentinel recently. What he’s talking about is ending the looky-loo stage, getting off the fence, and actually buying a new car. “We’re seeing it from a lot of different types of customers. It’s a good time to be in the car business.”

Sommer says his GM sales are up 40% over last year, and Subaru sales have increased 20%. His dealerships are hardly the only ones thriving this summer—and this month in particular.

J.D. Power has estimated that based on the pace set in early August, new car sales will hit 1.27 million units by the end of the month—a 12% increase over August 2012, and the highest tally since the onset of the Great Recession. What’s more, because the average price paid for new cars has risen over the years, and “consumers are spending more on new vehicles than in any month on record,” J.D. Power “anticipates that consumer spending on new vehicles in August will be close to $36 billion, which would be the highest level on record.”

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The average price for a new car was $30,500 in 2012, which was then an all-time high. The average jumped to over $31,000 for March 2013, and has remained at over $31,000 through the summer months.

It appears as if August 2013 will get some unusual help in reaching new sales highs due to a “calendar quirk,” as an Automotive News writer put it, which includes five weekends—all of Labor Day weekend included—in the numbers for August.

Month after month of strong sales in 2013 appear to have come as a result of ordinary consumers feeling confident enough in the economy and their financial well-being to take the plunge and buy new vehicles. (It probably also helps the cause that the average car on the road was recently estimated to be 11.4 years old, an all-time high.) According to data rounded up by Edmunds.com, new cars have accounted for around 29% of all car sales lately, up from 27.6% last year. Leasing has also been on the rise: About 25% of new cars sold this year have been leased, up from 22% in 2012.

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Sales may not keep soaring as the summer comes to a close, however. The same calendar quirk that’ll help August’s sales total will take away sales from September, which is usually a slower month at dealerships anyway. As the Auto News story notes, “August’s gain will be September’s loss.” But because Labor Day is considered a decent time to buy a car, and because dealerships are especially motivated to boost August sales to new heights, buyers should have a better than average chance of negotiating their way to a solid deal this weekend. A roundup of new-car deals by TrueCar.com should get you started.

23 comments
Franssenior
Franssenior

@chgroenusa Iedereen rijdt zijn autootje op. Vroeger kocht je na een jaar of 2 een nieuwe en ruilde je in.

warnat
warnat

Buying a new care is a fool's errand.  You may as well flush your hard-earned cash down the toilet.

CharlieHeston
CharlieHeston

Ya know, for a guy who's set to destroy our economy, President Obama has a weird way of going about it.

toborzgrrl
toborzgrrl

I finally bought (after 5 years of looking) because the vendors finally had non-hybrid cars that approached the gas mileage of my 13 year old Saturn. They were all slightly smaller than the Saturn, but I did not want to go thru another winter with the old car.

cleverlyc
cleverlyc

Stupid Obama!!

abnerq
abnerq like.author.displayName 1 Like

@cleverlyc  You mean that: "Kenyan born, white people hating, socialist commie, wealth redistributing destroyer of America... let's get it right! He should have let the auto industry disappear and just let the "free market work its magic".... like having Bain come in, break up the auto companies, sell off their assets, offshore all jobs and walk away with billions in their pocket, all the time proclaiming how great the "free market system" is. By the way, Reagan's former budget director and creator of supply side economics(and former darling of the right), David Stockman now says supply side economics was an abject failure and what we have today is a "rigged market system"... that's why the right now longer likes him... funny how that works.

CharlieHeston
CharlieHeston like.author.displayName 1 Like

@abnerq @cleverlyc I have so much respect for the way David Stockman came clean about the sham perpetrated upon this country called Supply Side Economics (aka, Trickle Down Theory.  aka, Reaganomics.)  Yes, Reaganomics was an abject failure, just like its namesake.  There's really no debating that at this point.

zacharyp87
zacharyp87 like.author.displayName 1 Like

Not necessarily. In July I bought a new car. Not a new car "loan" as you put it. I paid cash because I don't go out looking for things to spend my money on every paycheck and live at the very top of my budget as Americans like to do. It's nice to be able to write a 35,000 dollar check and not batt an eye, especially considering I only make a modest 50k a year.

CharlieHeston
CharlieHeston

@zacharyp87 Not really a wise use of your cash, given where interest rates are right now - like 0%.  Oops, you blew that deal.

Toodle68
Toodle68 like.author.displayName 1 Like

@zacharyp87  Sorry, but that was not the best move.. with zero % interest, it would be better to take a loan and invest the 35k.

ChuckJones1
ChuckJones1 like.author.displayName like.author.displayName like.author.displayName 3 Like

barbara, math/history must have failed you at some point.  let's revisit the Car Allowance Rebate System, aka "cash for clunkers." in 2009 690k vehicles were redeemed by the program and in 2009 there where >193million light duty vehicles registered in the usa. if 690k older vehicles were removed and replaced with 690k new vehicles, the average fleet age would not statistical decrease based on the large number of vehicles the light duty fleet ie: personal vehicles. simple math and averages.  your words of marxist-lite economy suggest your really haven't thought about numbers and averages, concrete facts, using math makes life difficult, much easier to parrot what you have heard.

BarbaraGordon
BarbaraGordon like.author.displayName 1 Like

Of course it's a good time to be in the car business. Under the Obama administration, the average age of registered motor vehicles still on the road broke the ten year mark for the first time in US history. (This is in spite of cash for clunkers taking older cars off the road in droves, which should have had the effect of lowering the average...) People weren't buying because this marxist-lite economy made them too poor and/or too economically insecure to be able to afford a new vehicle. They're going back to the showrooms because they literally have NO CHOICE. As a nation, our rolling stock is being driven into the ground. Car dealers can't even find quality used cars to sell. 

abnerq
abnerq

@BarbaraGordon did a worm crawl into your ear and make you crazy? We understand that you hate the president, but you've just shown yourself to be another: reality must conform to my ideology" wacko..

Toodle68
Toodle68

@BarbaraGordon  Yet someone else who completely ignores the events of 2008 and the effects into 2009 and the Obama administration.

MichaelLombardi
MichaelLombardi

OK sure cars sales are good but the majority of low income families that are sold a new car will default on the loan and probably not make it to the third payment. 

rcon
rcon like.author.displayName 1 Like

Ah...the whiners are out in force today.

PhilipLivingston
PhilipLivingston like.author.displayName like.author.displayName 2 Like

For everyday folks, a new car is the easiest and quickest thing to buy. The purchase requires little or no cash in many cases, only a commitment to pay in the future. Perhaps this should be referred to as a new car 'loan' boom, not a new car sales boom.