August was the best sales month for new cars in six years for the nation’s dealerships, including many in South Jersey.
Major American and Japanese automakers posted at least double-digit increases in sales in August as buyers put down payments on new pickup trucks and small-to-midsize cars.
Dealers posted sales of more than 16 million cars in August, a pace not seen since November 2007, a month before the recession began.
“July was the best month in six years for us. August looks like it’s even better,” said Jim Appleton, president of the New Jersey Coalition of Automotive Retailers, a trade group. “Sales are definitely booming at this point.”
Honda reported the biggest gain, with sales up almost 27 percent over August 2012. Toyota sales rose nearly 23 percent, while Nissan was up 22 percent.
At General Motors, sales increased almost 15 percent for the company’s best month since September 2008. Chrysler and Ford each reported 12 percent gains. Auto stocks rose, with Ford and GM up about 4 percent.
“We had a good month,” said Paul Gentilini, of Dennis Township, co-owner of Gentilini Motors in Woodbine. “Our Chevy business was up 25 or 30 percent. Ford was up 20 percent in our F-sales. Our F-series truck sales were going gangbusters.”
Ford Motor Co. sold more than 70,000 F-series pickups nationwide last month.
Gentilini Motors is moving its Chevrolet dealership from Washington Avenue to Route 550 next to its Ford dealership early next year.
Gentilini said much of its gains in truck sales came from builders and construction contractors who are back to work after Hurricane Sandy struck New Jersey last October.
“People started putting money into their houses and that put money into the contractors’ pockets,” he said. “I think the rest of the year is going to be strong. The industry is predicting a 15-million sales rate, the highest since 2006.”
There is also pent-up demand among local residents who have been holding onto their cars longer than normal, he said.
The car industry is on better footing than it was in 2007. Prices are high and automakers aren’t resorting to huge discounts to pull customers into showrooms. The average new car or truck sold for an estimated $31,252 last month, up almost $1,000 over August of last year and $24 higher than the previous record in December of 2012.
Five automakers, Chrysler, Ford, Honda, Nissan and Volkswagen, all had record-high selling prices last month, according to TrueCar.
Avalon Honda in Middle Township saw a 30 percent jump in sales in August over last year. General Manager Rick Kull, of Egg Harbor Township, said lenders are offering good interest rates.
“People have been holding off. We had people who took a lot of time shopping. If you’re going to get a good deal on a car, now is the time to do it,” he said.
The dealership’s most popular lines are Civics, Accords and CRVs, he said. Honda sold nearly 35,000 CRVs nationwide in August.
“I expect a good September,” Kull said.
Ray Burke, of the Burke Motor Group in Middle Township, said his dealership had a strong summer.
“Both July and August were good months for me. I’m probably about 30 percent over the same time last year,” he said. “It’s a welcome development after the lean years we had. It feels pretty good.”
His dealership on Stone Harbor Boulevard offers Chevrolet, Buick, Cadillac, Volkswagen, Subaru and GMC cars and trucks.
Americans are keeping their older cars much longer, he said. The average age of the American used-car fleet is pushing 13 years, he said.
“I see a lot of cars coming into our service department with well over 100,000 miles. Twenty years ago, I don’t think most people thought cars would go that far,” he said.
“Leasing has come back again. There’s a lot more leasing activity than there was for years during the recession,” he said.
Meanwhile, customers are offering larger down-payments, perhaps suggesting they have been planning the purchase for a while, he said.
“That confidence with the consumer is important when you have a big-ticket item,” he said.
Burke said this buyer’s market could have momentum to carry sales well into 2014.
“I think it’s going to stay good for at least the next year,” he said. “There seems to be quite a bit of potential for a run like this.”
That’s good news for other parts of South Jersey’s economy, the retail group’s Appleton said.
“We lost 20 percent of our dealers in New Jersey and 8,000 (dealership) jobs during the downturn,” Appleton said. “We’re not yet adding new dealerships in New Jersey. But as sales come back, jobs will come back. Dealers are hiring in sales and support roles.”
This has a positive influence on other sectors of the economy such as lending, he said.
“There’s a multiplier effect,” he said.
The Associated Press contributed to this report.
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