Affordable Credit Fuels May Sales Pace, Edmunds.com Reports
Edmunds.com predicted today that May sales will reach 1.55 million units. The SAAR is expected to reach 16.2 million.
SANTA MONICA, Calif. —Edmunds.com reported today that it expects 1.55 million new cars and trucks will be sold in the United State in May. Officials also estimated that the seasonally adjusted annual rate (SAAR) will be 16.2 million.
The vehicle information site’s projection would represent an 11.5 percent increase in sales from April 2014 and a 7.3 percent increase from May 2013, official said.
“Credit conditions are making it easier to buy or lease a new car,” says Edmunds.com Senior Analyst Jessica Caldwell. “Shoppers are opting for longer terms at lower interest rates. In other words, they’re able to afford more expensive cars by keeping their monthly payments at or near what they’re used to paying.”
Edmunds.com’s finance data showed that the average new loan term during the first four months of 2014 reached an all-time high of 66 months. The average interest rate for new loans (4.4%) in 2014 was only slightly higher than the all-time historic lows that have been well publicized within the last two years. Edmunds.com also pointed to loans secured with lower credit scores and all-time high lease penetration (27.9% YTD, through April) as sure signs that credit continues to loosen.
Edmunds.com estimated that retail SAAR will come in at 13.2 million vehicles in May, with fleet transactions accounting for 18.3 percent of total sales. An estimated 3.05 million used cars will be sold in May, the firm added, for a SAAR of 36.4 million (compared to 3.10 million — or a SAAR of 35.9 million — used car sales in April).
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