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U.S. new-vehicle sales in 2018 rise slightly to 17.27 million [UPDATE]

DETROIT — Sales of new vehicles in the U.S. rose slightly in 2018, defying predictions and highlighting a strong economy. Automakers reported an increase of 0.3 percent over a year ago to 17.27 million vehicles. The increase came despite rising interest rates, a volatile stock market, and rising car and truck prices that pushed some buyers out of the new-vehicle market. Industry analysts and automakers said strong economic fundamentals pushed up sales and should keep them near historic highs in 2019. "Economic conditions in the U.S. are favorable and should continue to be supportive of vehicle sales at or around their current run rate," Ford Chief Economist Emily Kolinski Morris said after the company and other automakers announced their sales numbers Thursday. That auto sales remain near the 2016 record of 17.55 million is a testimonial to the strength of the economy, said Mark Zandi, chief economist at Moody's Analytics. The job market, he said, has created new employment, and wage growth has accelerated. "That's fundamental to selling anything," he said. "If there are lots of jobs and people are getting bigger paychecks, they will buy more." The unemployment rate is 3.7 percent, a 49-year low. The economy is thought to have grown close to 3 percent last year, its best performance in more than a decade. Consumers, the main driver of the economy, are spending freely. The Federal Reserve raised its key interest rate four times in 2018 but is only expected to raise it twice this year. Auto sales also were helped by low gasoline prices and rising home values, Zandi said. It all means that people are likely to keep buying new vehicles this year even as they grow more expensive. The Edmunds.com auto-pricing site estimates that the average new vehicle price hit a record $35,957 in December, about 2 percent higher than the previous year. It will be harder for automakers to keep the sales pace above 17 million because they have been enticing buyers for several years now with low-interest financing and other incentives, Zandi said. He predicts more deals in the coming year as job growth slows and credit tightens for higher-risk buyers. Edmunds, which provides content, including automotive tips and reviews, for distribution by The Associated Press, predicts that sales will drop this year to 16.9 million.

Chevy Volt 'Drive My Way' test cuts out the dealership

Last month, the 2016 Chevrolet Volt won the 2016 Green Car of the Year Award at the Los Angeles Auto Show. Awards are nice, but General Motors is now offering to make some folks' familiarity with the second-generation Volt a little more personal. Chevy is enacting what it calls the "Drive My Way" program, where the automaker brings a 2016 Volt directly to some prospective buyers for a 30-minute test drive with no dealer required, according to Hybrid Cars. Kind of like Tesla, only different. RedCap Valet is administering the program and is helping to track drivers' behind-the-wheel behavior, including keeping records on speed, acceleration, and braking habits. General Motors representatives didn't respond to a our request for further details about how many people will be chosen for the program or how these folks were picked to participate in "Drive My Way." Through November, the Volt's sales were down 23 percent from a year earlier to about 13,000 units, so any momentum for the 2016 version is a good thing. If you're just looking for numerical improvements, the new version has got you covered. It can go as far as 53 miles on electricity alone (about 15 miles further than the previous generation model) and it's got better miles per gallon and MPGe ratings as well. Of course, numbers alone aren't usually enough sell a car. Experience counts. So we ask, dear readers, if having a 2016 Volt brought to you for a half-hour test drive might make it more likely that you'll buy one of these extended-range plug-in vehicles. While you're waiting for a new Volt to arrive at your house, you can take a look here for our First Drive review. Related Video: Featured Gallery 2016 Chevrolet Volt: First Drive View 24 Photos News Source: Hybrid Cars Green Chevrolet GM test drive volt extended-range plug-in

Subprime financing on the rise in new car sales, leasing too

We all remember the financial crisis that began several years back. At its core was a splurge of subprime lending for housing loans. The housing bubble burst, triggering a collapse of the mortgage-backed securities market. Apparently, those types of loans still exist in the automotive industry, and the market share for these types of "nonprime, subprime, and deep subprime," loans has grown 13.6 percent compared to the third quarter a year ago.
According to an Automotive News report, high-risk lending expanded to 24.8 percent of total loans in Q3, up from 21.9 percent for this time last year. As this level increased, average credit scores of borrowers dropped to 755, down from 763 a year ago. In that time, the average financing amount increased $90 per vehicle, to $25,963.
At 818, Volvo maintains the highest per-owner credit score, while Mitsubishi has the lowest, at 694. The highest rate of borrowers was at Toyota, with 14 percent of the market, followed by Ford with 13.1 percent and Chevrolet at 11.1.