Cheap financing, improving consumer confidence and a rebound by Toyota Motor Corp have all contributed to the most spectacular auto sales in the past 4 ½ years in the U.S.
While analysts had estimated sales of 14.5 million units, the actual sales on an annualized basis till September were 14.94 million, the highest rise since March 2008, four months after the U.S. recession of 2007 to 2009 began.
The sales for September month rose to 1,188,865 new vehicles, up 13 percent. Analysts had expected only a 9 percent increase. According to General Motors Company(NYSE:GM) and Ford Motor Company(NYSE:F), rising home prices and fewer jobless claims were the reasons for the rise in car purchases.
Easier availability of cheap financing was another factor which spurred auto sales. A large number of Toyota buyers last month received in no interest loan.
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"The money is so cheap now," said an analyst at TrueCar.com, and added, "Higher resale values and cheap money has been enabling automakers to offer some of the most attractive leasing programs we've seen in years."
"I think in general with the economy chugging along at about 1.5 percent to 2 percent that we are gradually seeing people come back," said Ellen Hughes-Cromwick, chief economist at Ford.
The largest U.S. automaker General Motors has said that the sales of its mini, small and compact cars nearly doubled last month. Ford’s small car sales were also up by 73 percent. This is because the rise in fuel prices has encouraged people to shift from trucks to cars.
"There has been a fundamental shift of truck to car that we've been seeing for the past few years," said Don Johnson, sales chief at Chevrolet, and went on to say that the September results indicated a continuation of that trend.
At closing bell, Ford shares were trading at $9.79, down 1.4 percent. On the other hand, the General Motors stock had climbed a 2.6 percent and was changing hands at $23.68.