Affordable Credit Keeps Auto Sales at a Steady Clip in May

SANTA MONICA, CA--May 29, 2014: Edmunds.com forecasts that 1,547,771 new cars and trucks will be sold in the U.S. in May, for an estimated Seasonally Adjusted Annual Rate (SAAR) of 16.2 million. The projected sales will be an 11.5 percent increase from April 2014 and a 7.3 percent increase from May 2013.

"Credit conditions are making it easier to buy or lease a new car," says Edmunds.com Senior Analyst Jessica Caldwell. "Shoppers are opting for longer terms at lower interest rates. In other words, they're able to afford more expensive cars by keeping their monthly payments at or near what they're used to paying."

SALES VOLUME FORECAST, BY MANUFACTURER

 

Edmunds.com's finance data shows that the average new loan term during the first four months of 2014 was an all-time high of 66 months. And the average interest rate for new loans (4.4%) in 2014 is only slightly higher than the all-time historic lows that have been well publicized within the last two years. Edmunds.com also points to loans secured with lower credit scores and all-time high lease penetration (27.9% YTD, through April) as sure signs that credit continues to loosen.

Edmunds.com estimates that retail SAAR will come in at 13.2 million vehicles in May, with fleet transactions accounting for 18.3 percent of total sales. An estimated 3.05 million used cars will be sold in May, for a SAAR of 36.4 million (compared to 3.10 million – or a SAAR of 35.9 million – used car sales in April).