September auto sales beat forecasts as Toyota gains
By Deepa Seetharaman and Bernie Woodall
DETROIT (Reuters) - U.S. auto sales for September looked set to jump about 13 percent from a year ago, beating analyst estimates because of cheap financing, stronger consumer sentiment and rebounding sales from foreign automakers including Toyota Motor Corp (7203.T: Quote).
The annual auto sales pace for September is on track to reach 14.8 million vehicles, Morgan Stanley analysts said, higher than the 14.5 million rate estimated by analysts.
Toyota sales chief Bob Carter said September's auto sales rate would hit 14.9 million, the industry's best level since March 2008.
Automakers are offering zero percent financing on some models, and credit is more accessible to subprime, or less-qualified, borrowers. About 80 percent of new vehicle transactions are financed, said R.L. Polk analyst Tom Libby.
"The money is so cheap now," said Jesse Toprak, TrueCar.com analyst. "Higher resale values and cheap money has been enabling automakers to offer some of the most attractive leasing programs we've seen in years."
The interest rate on a 48-month new car loan was about 3.19 percent last month, down from 4.39 percent in September 2011 and 7.45 percent in May 2009, according to Bankrate.com.
Cheaper loans coupled with improving consumer sentiment have boosted auto sales, particularly since the second quarter. Both General Motors Co (GM.N: Quote) and Ford Motor Co (F.N: Quote) pointed to signs that home prices and housing starts were improving.
Auto sales also continue to benefit from Americans' growing need to replace aging cars and trucks, which are pushing past the point of repair. Continued...