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Auto Dealership Sales Ride Wave of Strong US Economy in 2016

Posted by Joe Gargiulo | Tue, May 24, 2016 @ 04:00 PM

US auto unit sales will nudge slightly in 2016, the seventh consecutive year of increase according to a special report by TD Economics released April 21, 2016. The six-page documents states that auto sales will “reach a TD-Econ-Rpt-2016-auto-sales.pngpeak of 17.6 million units this year before edging down to 17.3 million units in 2017.” The report attributes the bullish growth to “a solid economic backdrop and attractive financing conditions.”

The 17.4 million units sold in 2015 were the highest total on record while the movement of 17.1 units during the first quarter of 2016 represented a 2.5% increase over the same period one year earlier.

“The availability of credit and affordability of vehicles is a winning combination for auto sales in 2016,” said Andrew Stuart, president and CEO of TD Auto Finance. “With the current state of the economy, buying a car is now more attractive than ever, making it an exciting time to be in the automotive finance industry.”

Changes to Buying Habit

The report referenced a drop of 4.6% in unemployment and a growth of 4% in employment income, and said that “disruptors” such as self-driving vehicles “could be a positive for auto sales in the future.”

Other Noteworthy Trends

  • The average term of new-vehicle ownership has jumped from 52 months in 2005 to 78 months in 2015 while the average age of vehicles is now 11.4 years, representing a 13% increase since the recession.
  • The transfer of the population to urban centers will diminish vehicle ownership in a limited manner.
  • Millennials living with parents and sharing vehicles will lessen ownership numbers.
  • Couples are waiting longer to buy autos since they are waiting longer to have children. (“The average age of a woman having her first child reached a record 26.3 years in 2014, up from 22.7 years in 1980.”)
  • Car-sharing membership orgs and new taxi services are on the rise, but will not seriously impact vehicle sales.

In conclusion, the report stated that “automakers are likely to enjoy sales around the 17 million unit mark for a few years … but a longer-term norm for sales is likely closer to the mid-16 million unit range, as the recent trek above 17 million is still satisfying pent-up demand that was built up during the recession.”

The stability of US auto sales provides the incentive for auto dealerships to refine their practices in the finance office where it is critical to get customers in and out without delay. The CrossCheck C.A.R.S. program was designed specifically with that in mind. Accept more checks; spend less time on bookkeeping; and increase sales in the process. Learn more by downloading our free guide.

 

C.A.R.S Insider's Guide

Topics: Auto Dealerships

Written by Joe Gargiulo

Marketing Specialist Joe Gargiulo has 25-plus years in marketing, communications and copy writing. As a writer, he enjoys connecting story leads to all aspects of the human experience.