Sizzling summer sales: Why higher-end cars, trucks, SUVs are bigger than ever

The sizzling summer sales season appears to be especially hot for higher-end luxury and mainstream car models, as well as trucks and SUVs.

And that trend won’t cool any time soon, according to an analysis by Edmunds.com, as positive economic conditions “are encouraging shoppers to seek out bigger and more expensive vehicles.”

“The cost-conscious, fuel-efficient mentality from the recession and early recovery years has faded,” said Lacey Plache, Edmunds.com chief economist, whose team analyzed two years’ worth of data from the website in compiling the report, “What car shoppers want now.”

American car shoppers are going bigger in 2015.

American car shoppers are going bigger in 2015.

“We expect these economic trends to continue into next year at least,” she added, “so there’s every reason to believe that shopper preferences for larger and more expensive vehicles will continue along the same path that we’ve seen emerge in the past year or so.”

That’s very good news for car dealerships in the midst of some of the biggest sales months of the year.

Positive economic trends include lower unemployment, higher consumer confidence and lower gas prices, as well as low interest rates, low inflation and heavy vehicle replacement.

Two of the biggest factors that are encouraging shoppers to get more expensive vehicles are cheaper credit and the movement toward leasing, according to Edmunds.

Leasing is on a record pace in 2015.

Leasing is on a record pace in 2015.

May figures show that 9.5 percent of buyers who financed new vehicles got zero percent loans – the highest percentage since last September. “And over 28 percent of new cars and trucks sold so far in 2015 were leased, putting the year on pace for the auto industry’s highest lease penetration rate ever.”

Industry experts are predicting that around 17 million new vehicles will be sold in 2015.

Meanwhile, the lower interest in fuel efficiency is driving car shoppers away from the two most popular segments of recent years – midsize and compact cars – as well as hybrids and electrics.

“The share of shoppers configuring higher-end, better-equipped vehicles has increased while the share configuring lower-end vehicles has decreased,” according to Plache.

“The upgrading of the new-vehicle market also is obvious when you consider that trucks and SUVs have outsold cars in each of the last 21 months, despite significant average price differences,” said Edmunds.

“In May, for example, the average transaction price for trucks and SUVs was nearly $37,000, while the average transaction price for cars was about $27,400. Most shoppers are not only more attracted to those bigger vehicles, but they are paying on average $9,500 more to own one.”

Now, that’s hot fun in the summertime.

Posted in News, Selling, Trends

Written by

Enjoy this Post?

Remember to subscribe to our RSS Feed and if you would like, please share this post.

Comments are closed.