Surge in auto sales isn't necessarily driven by recovery

April 7, 2012 at 10:04PM
In a Feb. 29, 2012 photo, Fiat 500 vehicles are displayed at the Golling Fiat dealership in Birmingham, Mich. Chrysler Group was the first automaker to report sales Tuesday, April 3, 2012. Its U.S. sales jumped 34 percent in March on strong sales of Fiat small cars and Chrysler sedans.
In a Feb. 29, 2012 photo, Fiat 500 vehicles are displayed at the Golling Fiat dealership in Birmingham, Mich. Chrysler Group was the first automaker to report sales Tuesday, April 3, 2012. Its U.S. sales jumped 34 percent in March on strong sales of Fiat small cars and Chrysler sedans. (Associated Press - Ap/The Minnesota Star Tribune)

The economy remains wobbly, unemployment is still high, and yet people are buying new cars at a pace that would suggest a sweeping wave of prosperity.

Even auto industry analysts concede that it's counterintuitive -- until you take a closer look at what's being traded in for new wheels.

The average age of vehicles traded in within the United States in January and February was about 6.2 years old, according to Edmunds.com. That's the oldest on record, with the notable exception of July and August of 2009, when the average trade-in age was off the charts because of the federal Cash for Clunkers program.

But now, no such rebate program exists. In fact, Edmunds said, automakers' incentives in February this year were the lowest since February 2003.

Auto sales figures for March showed the strongest pace since early 2008.

Analysts say the evidence is irrefutable: Consumers who were holding onto aging cars through the recession are finally returning to the new-car market.

"I think people are hitting the breaking point, where they're saying, 'OK, it's better to get a new car than put more money into the old one,'" said Jessica Caldwell, senior analyst for Edmunds.

David Rodgers, senior vice president and general manager of the Sullivan Automotive Group, which oversees Northern California dealerships, said that, more than car age, he's been struck by the high mileage he's seeing on trade-ins.

"The average [age] is running about three to four years older than what we were seeing before [the recession], but the mileage is what is really noticeable," he said. "We're seeing 200,000 to 250,000 miles on some cars, where we were seeing 85,000 to 130,000 or 140,000 before."

Numerous analysts were citing "pent-up demand" for new autos even during the darkest days of the recession. They just did not know when the logjam might break.

about the writer

about the writer

MARK GLOVER, McClatchy Newspapers

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