Cheap Financing and Low Gas Drive America’s Truck Boom
Americans are known to live with the motto that says “bigger is always better”. Keeping this in mind, the driving records show that most Americans also demand for the biggest rides for roads. Following the hot selling streak that soared high in November for pickup trucks, crossovers, and SUVs, consumer demand this month has increased for the trucks that have powerful combination of cheap financing and low gas prices.
Finally, people have accepted the fact that gas prices will remain low for quite some time, and keeping this in mind, people have added this into their spending habits. On average, a gallon of gas costs $2, and it is not surprising at all to see a rise in the sales of trucks jumping 20 percent higher this month, making it another month that has seen more trucks selling with companies making more profits.
Nissan is another company that was able set a record in the sales of SUVs and trucks last month. It was able to achieve a 15% increase in its profit margin. General Motors saw an increase of 4% and Ford trucks climbed higher with 18.3%. November was a strong month for most companies that sold low gas and cheap financing trucks, and this month too every company is hoping to see the numbers double again. With Ford’s new Kentucky Plant, it is predicted that the sales and production of truck models will continue to increase for the next couple of years, at the same time providing more job options for people.
Cheap gas is one of the factors that most drivers demand SUV’s and trucks; another major factor is the low rates of interest. Having low financing costs clearly means that the buys can borrow more money to pay up for vehicles that are expensive, at the same time they can spend lesser amounts of money on the utility of the vehicle. Combining these two factors, America now has a stable situation where automobile buyers don’t have to worry about monthly installments for their cars, or paying extra to fuel their trucks.
Then again, what will happen if the gas prices continue to escalate high and the interest rates also increase? An analyst at UBS, Colin Langan said such move will only increase the demand for more expensive, larger vehicles. The rising rates will not kill America’s truck boom.
Langan also said that if the interest rates continue to increase, that’s not good news for the truck industries, but looking at this historically, since the 1980s, there have been just five periods in which interest rates were increased; however, sales also rose in those years. Clearly, that indicates the economy too was improving in those times. So if the economy is strong, the interest rates will also rise up, and the sales of automobiles will also rise along with the rates. – See more at: http://truckernews.com/cheap-financing-and-low-gas-drive-americas-truck-boom-p567-90.htm#sthash.a5eyNrMa.dpuf