The improving economy and growing consumer demand for newer, more fuel-efficient vehicles that include the latest safety features and in-car connectivity are driving the trend.
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"Right now the auto industry is in the midst of a cycle where sales and pricing are very strong," said J.D. Power's Deirdre Borrego. "I'm cautiously optimistic that will continue at least through next year."
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The increase, while welcome news for the auto industry, has led some to question whether the strong market is sustainable.
"As long as the economy remains strong and interest rates stay relatively low I think sales will hold up well," Borrego said.
As retail sales climb to a record high, automakers and dealers are selling vehicles for record prices.
J.D. Power said the average transaction price paid by consumers at dealerships this year is $30,026, which will likely lead to an all-time high of $407 billion for retail sales in the U.S.
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"Consumers are able to pay more for the cars and trucks they're buying because auto loan interest rates have been so low," Borrego said. "At the same time lenders are writing loans for longer terms, so monthly payments have stayed relatively flat for car buyers."
The average monthly payment for new vehicle buyers is $457, according to J.D. Power. In addition, the firm calculates almost one-third of all auto loans for new vehicles are for a term length of six years.