Experts See Auto Sales Recovering Next Year; Prices Could Rise

Posted: October 26, 2009

Americans bought more than 16 million cars in 2007. We bought just over 13 million in 2008. Despite the sales frenzy triggered by the government's Cash for Clunkers rebate program, many analysts believe we won't quite have bought 10 million by the end of 2009. Some say, however, that the downward trend will reverse itself soon.

Reuters reports, "U.S. auto sales are projected to rise nearly one-fifth to 11.8 million units in 2010, influential industry tracking firm CSM Worldwide said on Wednesday, citing signs that the worst of the economic downturn had passed." The total "would represent the first year-on-year increase in U.S. light vehicle sales since 2005."

We may never see a return to brisk pre-recession numbers. The Oakland Press notes, "President Barack Obama's Auto Task Force, uncertain about the industry's outlook...insisted on ‘realistic' sales targets, which meant that, after bankruptcy, both General Motors and Chrysler would be able to survive on sales levels that would have been considered impossible less than two years ago." The administration "was concerned that the American appetite for automobiles has been permanently diminished."

And, while a sales increase would be great news for battered automakers, it might be bad news for the average new car shopper. Joe Barker, an analyst at CSM, told Bloomberg, "Incentives coupled with already high car company discounts have put a new automobile within reach of consumers that would have shopped for a used vehicle."

A faster sales pace could cause automakers to reduce the aggressive discounts they've used to sell cars in the current economy -- so if you are in the market, you may want to act now before the recovery gains more steam. Check out the U.S. News rankings of this year's best cars as well as this month's best car deals.

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