March is turning out to be the best month for auto sales in at least six years. The Associated Press reported that major automakers including Ford, Chrysler, Toyota, General Motors and Nissan all reported increases, with some reporting their best monthly totals since the start of the Great Recession in December 2007.
Buyers were lured to showrooms by flashy new vehicles and low interest rates. Moreover, they continue to replace older cars and trucks — the average age of a vehicle on U.S. roads is more than 11 years.
“A strong first-quarter close and increased consumer confidence continue to position the auto industry as a leader in the economic recovery,” Bob Carter, Toyota’s senior vice president of automotive operations, said in a statement.
Sales at Ford and General Motors each rose about 6%, while Chrysler sales rose 5% compared with last March. Toyota and Nissan each reported 1% sales increases, but Nissan said March was still the best month in company history. Chrysler sold nearly 172,000 cars and trucks, its best month since December 2007, while Ford reported its best month since May 2007 with sales of about 236,000.
Toyota sold more than 205,000 cars and trucks in March, its highest total since August 2009, when the government paid people to trade in their clunkers for new vehicles. But Toyota’s pace of growth is slowing because sales are being compared with huge monthly increases last year. Both Toyota and Honda had big years in 2012 as they recovered from a 2011 earthquake in Japan that hobbled their factories and caused shortages of cars and trucks.
Industry analysts estimate that total March sales reached nearly 1.5 million cars and trucks, a number not seen since May 2007. Total U.S. sales are expected to be up 3% to 5% over March 2012.
The strong numbers are another sign that Americans are buying cars in increasing numbers as their financial situation improves.
Alec Gutierrez, a senior market analyst with Kelley Blue Book, said the improving job market is boosting sales. The number of Americans seeking unemployment benefits fell to a five-year low during March. Low interest rates are also making new-car purchases more appealing, Gutierrez said. The average rate for a 60-month new-car loan is now 4.12%, down from 4.52% at this time last year, according to Bankrate.com.
Gutierrez also said tax refunds may have spurred purchases. The average federal tax refund this year is nearly $3,000, or enough to cover the down payment on a three-year lease of a Toyota Camry hybrid or a BMW 3-Series sedan.