Oct. 2 - U.S. auto sales rose more than predicted in September, thanks to better credit conditions and lower prices, but good deals may be coming to an end. Carmen Roberts reports.
Auto sales rise in September as Americans continue to unleash pent-up demand to take advantage of incentives and affordable deals. But a big part of those sales -- the price of new cars and trucks -- may have hit bottom. Competition for buyers has been so strong during the wobbly global economy that automakers were forced to cut prices. Still, don't look for prices to fall further, especially as European car makers complain prices have hit unprofitable levels. John Giamalvo is Director of Dealer Strategy for Edmunds.com. SOUNDBITE: JOHN GIAMALVO, DIRECTOR OF DEALER STRATEGY, EDMUNDS.COM (ENGLISH) SAYING: "When you start to hear the Europeans complaining about profitability based on the pricing and remaining competitive, I think that's indication that we may have fallen in price to an area where they should stay stable." TrueCar.com says increased consumer demand may also keep prices from falling further. The average transaction price was unchanged in September compared to August, and rose about one percent from a year ago. Relatively low prices combined with low interest rates have made cars more affordable by driving down monthly payments. SOUNDBITE: JOHN GIAMALVO, DIRECTOR OF DEALER STRATEGY, EDMUNDS.COM (ENGLISH) SAYING: "The Fed definitely helps when you see those zero, zero, zero deals. Zero money down, zero payment for the first month and a low monthly payment, and that certainly gives the perception when consumer confidence ticks up a little bit, 'Hey I can afford a new vehicle.' New cars are also more affordable on an income basis. Comerica Bank says the cost is about 23 weeks of income -- only slightly more than the record low when the survey started in 1979. But with auto prices poised to go higher or at best hold steady, for Americans who have been hanging on to their cars an average of 6 years, now may be the time to make a deal. Carmen Roberts, Reuters.