CrossCheck Blog

CrossCheck Blog

Check Processing & Payments Information

Auto Sales Increase as End of Year Wraps Up

Posted by Brandon Weaver | Thu, Dec 13, 2012 @ 03:30 PM

silver lexus bow2012 is coming to an end. Black Friday and Cyber Monday have both come and gone. Retailers and auto dealerships alike can still capitalize on holiday and year-end sales. Concerns over the fiscal cliff loom, but not to worry, auto sales are still expecting to increase and be healthy for the industry.

This time of year it has become a tradition of sorts: the Lexus December to Remember commercials where they highlight a shiny new model wrapped in a giant red bow. Of course, they're advertising the next year's model and low interest rates encouraging you to lease or buy as a Christmas gift to your loved one.

Contrary to Lexus' belief, you do not need a giant bow to sell your new inventory either. Sadly, a natural disaster may prove to be beneficial for auto dealers. Hurricane Sandy devastated millions of people on the Eastern seaboard. As a result consumer automobile demand is picking up because of it. Not to mention more rental cars are being shipped to the Northeast as many people have filed insurance claims to recoup their losses. Once these insurance claims are processed, new car buyers will increase too. In fact, November auto sales were boosted by pent-up demand as consumers replaced their aging vehicles.

A dropping unemployment rate helps auto sales too. The Bureau of Labor Statistics and Trading Economics both report a 7.7% unemployment rate for November 2012. With more people getting back to work, more discretionary income becomes available possibly put toward the purchase a new vehicle.

us unemployment rate

Likewise, with lower unemployment and younger consumers wanting their independence, Millennials are a prime demographic to target because of their growing purchasing power and desire to purchase vehicles that are 'wired.' Plus, high used car values could be helping young buyers who have something to trade-in or sell when buying their next vehicle.

In addition, Motor Intelligence reports that U.S. light-vehicle sales Seasonally Adjusted Annual Rate (SAAR) is expected to be more than 15 million in November for the first time in years:

us light vehicle sales increasing

Specifically relating to November auto sales, NADA reports the following:
  • Morgan Stanley estimates between 300,000 and 400,000 units in SAAR performance for November was a result of Sandy replacement vehicles
  • Hybrid sales have increased 66.1% in 2012 on volume of 384,554 units
  • Plug-in hybrid sales reached 33,594 units through November, up from 6,142 just one year ago

Many signs point to an improving car buying market. Attractive advertising, lower unemployment, year-end close outs, even natural disasters help auto sales and dealerships across the country. Are you poised to take advantage this holiday season and kick-start the new year? What is holding you back?

 

auto dealer remote deposit capture
 

Topics: Auto Dealerships

Written by Brandon Weaver