Millions of Americans, it seems, felt that the time was right to trade in their clunkers for a new set of wheels.
Sales of cars and light trucks surged an incredible 58% in March compared to last year, according to Bureau of Labor Statistics data. Some 1.6 million vehicles were driven off car lots during the month, representing over 18 million on a seasonally-adjusted annual rate (SAAR).
There could be several reasons why car sales skyrocketed last month, the most obvious being that pandemic restrictions are gradually being lifted. A fresh infusion of stimulus money also didn’t hurt.
But then there’s the matter of cost. Due to the global semiconductor chip shortage, which has temporarily halted production at some North American auto plants, the price of used vehicles is up an eye-watering 26% from last year, according to the Manheim Used Vehicle Value Index. Borrowing costs are also on the rise, prompting consumers to act fast.
Last month, I advised readers to buy a new car now if they were in the market for one, and it looks as if many Americans were of the same mind. I expect prices to climb even more before they start to plateau.
Luxury Carmakers Set New Sales Records
Looking globally, I was surprised to see just how well the luxury vehicle market performed in the first quarter. Daimler-owned Mercedes-Benz sold over 78,000 cars and trucks during the period, a 16% increase from last year. Toyota’s Lexus brand took the number two spot in terms of sales, moving 74,000 units for the quarter.