Even as gas prices rise higher and consumers continue to try to save, auto sales are picking up. It seems like consumers have held onto their old vehicles long enough. With their cars driven into the ground, more people are hitting the dealership for the new car splurge.
Auto sales have been healthy for quite some time now. But the latest reports show the industry is going strong. On Tuesday, major automakers reported that sales for August increased 19.9%, even as gas prices, which traditionally stymie sales, spiked, The New York Times reported. Automakers like GM, Ford, Toyota and Chrysler drew a combined 1.28 million new car sales in August, bringing the year-to-date increase to 14.7% over the first eight months of 2011.
Interestingly, it doesn’t seem like it’s the gas efficient cars driving demand. Instead, it’s pickup trucks that are behind the increasing sales, reports The Associated Press. Demand for full size pickups increased 16%, with sales of Chrysler’s Ram and Toyota’s Tundra posting significant gains – a whopping 68% in the latter case. Some say part of that demand is replacing worn down pickups, while another part is due to the increasing health of the housing market. Because as home construction gains momentum, so does a need for construction workers and their trucks.
Credit unions are already relishing in strong auto loan growth. In the second quarter, credit unions captured 15% of auto loan originations as year-to-date auto sales increased by 18.3%. Total auto loans increased 4.78% to $172.7 billion as of June 2012, according to Callahan & Associates’ Peer-to-Peer data.
So the trend of credit unions capturing an increasing amount of an increasing market continues, auto loans will provide a strong balance sheet point for the rest of 2012.