The auto industry wins the silver lining award from the affects of Hurricane Sandy: November car sales jumped 15 percent on strong demand from people replacing cars destroyed by the storm, Americans feeling more confident in the economy, and an easier access to credit.
November was the strongest month of sales since January 2008, nine months before the financial collapse that sunk the economy, according to AutoData. The auto industry began feeling the effects of the recession long before the rest of the economy. More than 1.09 million cars were sold in November, up from 1.02 million a year ago.
That puts sales at a seasonally adjusted annualized rate (the figure automakers look at to compare month-to-month sales, which tend to fluctuate with the weather) at 15.54 million, compared with 13.55 million last November.
Auto loans are easier to get now too. Credit clearing house Experian (EXPN) recently reported that sub-prime lending in the auto category was about 43% of loans, up from 42% in 2008 when such lending peaked before the financial crisis. Underwriting, such as income verification, has stiffened since then. Finance companies, though, have loosened lending for those with low credit scores, but who have solid incomes.
But automakers warned that talks of the "fiscal cliff" could put a damper on the party, if Congress and the White House can't reach an agreement. The "fiscal cliff" term refers to the tax increases and government spending cuts set to roll into effect starting Jan. 1 if the government can't come to an agreement to cut the deficit.
"Exactly how much growth we can expect next year will depend on how Congress and the president resolve the fiscal cliff issue," said Kurt McNeil, General Motor's (GM) head of U.S. sales. "Markets and consumers hate uncertainty."
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Hurricane Sandy Boosts Car Sales in November