New-car sales have reached a record high this year. Car dealers across the Valley say the jump in sales is good news.
New cars are rolling of the lot at a rate of more than 2,000 per hour. General Motors and Ford are leading the way this year with car sales.
GM has sold 2.8 million cars and trucks, while 2.4 million new Ford cards and trucks are on the road.
Todd Daughterman, general manager of Columbiana Ford, said sales have increased approximately 15 percent from last year. He attributes the jump to low gas prices.
“With gas prices below $2 a gallon, people can afford to go a little less miles per gallon but get comfort, so SUVs and trucks have really picked up this year,” he said.
Diane Sauer, owner of Diane Sauer Chevrolet in Warren, said with a number of automotive manufacturers in the area, that also means an increase in their profits.
“Clearly, we have a huge automotive presence here in this Valley, with the Lordstown plant,” she said. “Delphi still has a presence here and all of the satellite companies in seating and transportation. So, it’s really good for our area.”
Good lease terms and low interest rates have helped drive the boom. Interest rates will increase slightly now that the Federal Reserve has raised its rates, however.
The Fed coupled its first rate hike in nine years with a signal that further increases will likely be made slowly as the economy strengthens. The central bank said in a statement after its latest meeting that it was lifting its key rate by a quarter-point to a range of 0.25 percent to 0.5 percent to end a seven-year period of near-zero borrowing rates. The Fed added that it expects only “gradual increases.”
Dealers are hoping that won’t scare borrowers away.
“It’s not going to be that noticeable, that’s what I’m thinking,” Sauer said. “I don’t know about the psychology, but everything I’m hearing is it’s such good news, because it means our economy is on track.”
Dealers say they think sales will keep growing over the next few years.
“Even though sales have spiked, the average year of the car is still 11, 11-and-a-half years old,” Daughterman said. “So there’s still a necessity to have to buy a car.”
The Associated Press contributed to this report.