Confident in the economy and cheered by cheap gas, Americans are likely to push new car sales to their highest level in a decade this year.
As reported by the Associated Press, analysts expect sales to reach 17 million for the first time since 2005. That’s close to the record of 17.3 million set in 2000.
Low gas prices are giving buyers more confidence, whether they’re buying their first subcompact or upgrading to a larger SUV. Gas prices started this year at an average of $2.23 per gallon, down 33% from the beginning of 2014, according to AAA.
The Energy Department estimates that lower gasoline prices will save U.S. households $550 this year — about four months of lease payments on a 2014 Honda Civic. Popular new vehicles, like the Jeep Cherokee and Subaru Outback, are also drawing buyers.
Sales have now grown for five consecutive years — a rarity in the volatile auto industry. While sales are growing, the pace has slowed from double-digit increases in 2011 and 2012. That’s good news for buyers, who can expect to see bigger discounts in competitive segments like midsize cars as automakers fight to steal sales from each other.
Alec Gutierrez, an analyst with the car buying site Kelley Blue Book, thinks sales could stay in the 17-million range for the next two or three years if interest rates stay low and the U.S. economy remains healthy.
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