Demand for trucks and SUVs is so strong that automakers are raising prices, and consumers are willing, and able, to pay. Bobbi Rebell reports.
Consumers are paying up to hit the road. The average price paid for a new vehicle in the United States rose 2.5 percent in June from a year ago to $33,340, according to Kelley Blue Book. Ford reported the highest gains in vehicle pricing, up 6.6 percent from last year. Senior Director of Insights Karl Brauer: SOUNDBITE: KARL BRAUER, SENIOR DIRECTOR OF INSIGHTS, KELLEY BLUE BOOK (ENGLISH) SAYING: "There seems to be plenty of demand and willingness to pay even a higher price. I think, it's because you have fairly easy credit. You have also got lots of leasing going on which mitigates the monthly cost, and you've got longer loan terms too. Plenty of people are taking these six and seven-year loans. All of that adds up to a lower hit to your monthly budget, which makes most consumers willing to pay more up front." U.S. auto sales, considered by many to be an early snapshot into consumer spending each month, are up about five percent in June for the industry. The biggest winners - truck and sport utility sales. Growth continues to race past sedans, thanks to low gas prices. For example, Ford's SUV sales rose ten percent but car sales fell 3.5 percent. Sales of Fiat Chrysler's Jeep SUVs jumped 25 percent. For the industry, the pace of gains has slowed but remains solid. SOUNDBITE: KARL BRAUER, SENIOR DIRECTOR OF INSIGHTS, KELLEY BLUE BOOK (ENGLISH) SAYING: "They are kind of flattening out, but they are flattening out at around 17 million units a year, which is close to the record. Our best year ever was 2000 with 17.4. So, anytime we are above 17 million units, we are doing extremely well. It looks like we are going to head there again this year." The National Automobile Dealers Association this week raised its forecast for 2015 auto sales to 17.2 million vehicles from 16.9 million. It would be the sixth straight year of gains since the recession.