When the sales were tallied for April, the combination of pickups, crossovers and SUVs made up over half of the total US volume for the month. The basic rule of economics teaches that high demand leads to growing prices. Therefore, it’s hardly surprising that people are paying more to get into one of these vehicles.
According to research by Edmunds into the month’s sales, transaction prices for fullsize SUVs were up nine percent from a year ago. Additionally, it was the 20th straight month of trucks outselling cars in the US. The thirstier vehicles have been pushing down the country’s average fuel economy, however.
On the other end of the spectrum, small cars are sitting around dealers for up to three months and facing growing inventories. With that kind of environment, their transaction prices aren’t showing the same growth as their higher-riding counterparts.
Auto loans continued to grow as well, and Edmunds found a new record of an average 67.8 months for April. This trend has been building for quite a while as people opt for more time to pay off their cars to be able to afford more features. Even for the last quarter of 2014, Experian found a new record of outstanding debt of $886 billion.
The government is predicting gas prices in the US to stay low through the summer, and fuel might even drop to the cheapest since 2009. With no reason to put on the brakes, the strong market for SUVs and crossovers is likely to just keep on truckin’.