DETROIT (AP) — U.S. car and truck sales are expected to hit their highest level in nearly six years in March, as buyers armed with tax refund checks were lured by flashy new vehicles and low interest rates.
Auto companies release U.S. sales figures Tuesday.
Analysts predict total sales of nearly 1.5 million cars and trucks, a number not seen since May 2007. That's almost double the 855,000 vehicles sold in March 2009, the low point for sales during the economic downturn, according to Ward's AutoInfoBank. Sales are expected to be up 3 to 5 percent over last March.
Alec Gutierrez, a senior market analyst with the car pricing company Kelley Blue Book, said the improving job market is boosting sales. The number of Americans seeking unemployment benefits fell to a five-year low during March. Low interest rates are also making new-car purchases more appealing, Gutierrez said. The average rate for a 60-month new-car loan is now 4.12 percent, down from 4.52 percent at this time last year, according to Bankrate.com.
And Gutierrez says tax refunds can also spur purchases. The average federal tax refund this year is nearly $3,000, or enough to cover the down payment on a three-year lease of a Toyota Camry hybrid or a BMW 3-Series sedan.
Full-size pickup truck sales are expected to rise nearly 15 percent in March, following big gains in February, Kelley Blue Book said. Construction companies are rapidly replacing their truck fleets as the economy improves and they win more business.
Gutierrez said incentive deals — such as the $7,500 cash back now offered for the Chevrolet Silverado pickup — are helping truck sales, and should continue for a while. General Motors, Ford and Chrysler each have a healthy supply of trucks for sale and GM wants to clear out older models before introducing its new Chevrolet Silverado in a few months.
"Consumers looking for a new pickup truck should not hesitate to pull the trigger," he said.
Crossovers are also gaining, thanks to redesigned models like the Ford Escape and Toyota RAV4. Small cars are down slightly, in part because gas prices are relatively low. Gas averaged $3.64 per gallon at the end of March, down from $3.78 at the end of February and $3.91 in March of 2012, according to AAA.
Honda's sales gain should be among the best for March. Sales rose nearly 9 percent, according to car buying site Edmunds.com. Honda's U.S. sales chief, John Mendel, estimates that sales of the recently redesigned Honda Accord midsize sedan increased around 30 percent last month. The Accord may have even outsold the Toyota Camry — the perennial best-selling midsize car — for the first time since October 2011.
Volkswagen, GM and Chrysler should also post sales gains between 5 and 10 percent in March, analysts said.
Alan Batley, GM's U.S. sales chief, called March a strong month both for his company and the U.S. industry overall.
He expects industry sales ran at an annual rate between 15.3 million to around 15.5 million for the month. That's lower than the recent peak of 17 million in 2005, but it's healthy compared with the anemic 10.4 million recorded during the recession in 2009. March is expected to be the fifth consecutive month with an annual sales pace over 15 million, according to Edmunds.com.
"We've tracked well all month," Batey said in an interview Wednesday at the New York International Auto Show. "We expect we'll show a nice increase."
Toyota Motor Corp. will likely report a smaller gain. Toyota's sales were unusually strong last March, when its supply of cars finally returned to levels seen before the 2011 earthquake in Japan.
AP Auto Writer Tom Krisher contributed from New York.