US car sales are on track to reach 16,4 million vehicles this year, up 6 percent from 2013 and a record level since 2006. But there’s another important indicator that speaks volumes about the economy’s recovery: Americans are spending more money per car than before.
Since 2009 the annual revenue from U.S. car sales has increased 61 percent to $522 billion, according to analysis from TrueCar. This means that the average cost of a new vehicle sold has risen from $31,077 to $31,798.
According to TrueCar president John Krafcik, analysts are underestimating the health of the U.S. auto industry. “It’s extraordinarily relevant that people are willing to pay more for automobiles. Especially when the narrative has largely been that cars are playing less of a role in our lives,” Krafcik told Businessweek.
There are four main reasons for this increase in spending per car: the buyers’ preference for bigger vehicles that tend to cost more, the cars’ better standard equipment than before, low interest rates which allow buyers to spend more on cars, and the luxury segment’s growth.
Crossovers have been one of the the fastest-growing car segments in history, luring buyers who once would have chosen sedans. “All other things being equal, Americans want a bigger car if they can get one,” Krafcik says. The market certainly reflects his statement: in the first nine months of the year, large luxury SUVs as the Lincoln Navigator (pictured) and Infiniti QX80 have sold faster than anything else.
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