June 3rd, 2015
Americans are buying new cars in larger numbers than previous years, and auto sales in the U.S. continue to surge. Many of the major car companies are reporting strong sales and forecasting sustained sales for the rest of the year, Daily Finance reported. If the pace of current sales continues throughout the year - which many industry experts anticipate - it will be the best performance since 2006. Pickup trucks and SUVs were once again the best sellers.
General Motors is forecasting solid sales, with a seasonally adjusted annualized rate of 17.6 million vehicles and industry sales expected to surpass 17 million vehicles - a ten-year high.
Both GM and Fiat Chrysler Automobiles' saw sales increases, with the former experiencing a 3 percent boost and the latter getting a 4 percent bump. Meanwhile, sales at Ford Motor fell 1 percent, as the F-Series pickups dropped by 10 percent.
Longer auto loans
In addition to auto sales reaching near-peak levels, Americans are extending the length of their auto financing. According to USA Today, average new car loans have reached 67 months, which marks a record length for loan repayments. Longer loans with 73- to 84-month financing periods also reached a new high of 29.5 percent.
Melinda Zabritski, Experian's senior director of automotive finance, noted that if consumers take a long-term loan, that means they need to own the car for longer, the source reported. If the consumer tries to sell the car before completing repayments, he or she runs the risk of facing negative equity.
"While longer-term loans are growing, they do not necessarily represent an ominous sign for the market," said Melinda Zabritski, "Most longer-term loans help consumers keep monthly payments manageable while allowing them to purchase the vehicles they need without having to break the bank."
With so many new car purchases with longer loan financing periods, consumers need to ensure they have cheap and affordable insurance. CoverHound provides auto insurance options from their convenient and easy-to-use website.