What Drove U.S. Auto Sales Into High Gear?

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Sept. 3 (Bloomberg) -- Kelley Blue Book's Karl Brauer and Dealertrack Technologies' Dave Winslow discuss U.S. auto sales in August with Pimm Fox on "Taking Stock." (Source: Bloomberg)

From los angeles, dave winslow.

All right, let's begin with you, karl brauer.

Jeep was the big winner for chrysler, right?

Up 49%. that is a pretty crazy number when you think about it.

What is that happening?

Is it because people cannot get enough jeeps or is it about that sector of the market, these smaller crossover suv?

It is a little of both.

That segment of the market is on fire.

Any model will sell well because that is where the population is going for new vehicles.

But then you have the new cherokee, which was vertically times to take advantage of this cultural shift in vehicle buying.

Now you have a well-received small suv in the small suv marketplace that is on fire.

Dave winslow, a cultural shift also in the way people buy automobiles.

Tell us what is happening with online, specifically with mobile . yes, absolutely, a big shift.

A big increase in mobile.

It was some data, if you can.

What numbers?

Yes, 108 resent increase in august -- 108% increase in august, year-over-year.

We look at the consumer looking at a product on a dealer website -- that was up 30% for new cars.

20% for used cars.

You see people using these smaller devices to shop for a major purchase like a new car.

It is sending more people to be dealership lot and they are more prepared than ever to make that purchase when they get there.

Dave winslow, does this mean the way auto dealerships advertise and market is going to change?

-- change where that money is flowing?


We have seen a lot more money going to advertisements in europe.

More in digital advertisements for dealerships.

They are advertising on other research sites.

Kelley blue book is one.

Car and driver.

He transferred to digital advertising, where consumers are spending time shopping for cars, we are seeing those two marriott better.

-- we're seeing those two marry up better?

Can people look for a nissan road, and determine where they are, what they are looking for, and determine where the dealerships have what they are looking for?

Yes, and that is that big shift to digital.

We have mastered the art of cooking people up to the car they want using our research capabilities.

And then finding the dealer who has that vehicle and the price they should pay according to our data.

What makes automobile is on fire according to your data -- and i mean in a big way?

It really is cheap.

Cheap, by far as a -- jeep, by far as a brand, they are of the most.

I think it was 20% this month.

Ram is up 39%. jeep is up 49%. when you have a truck and suv heavy divisions cashing in on the suv buying pattern right now, you pretty much have everything going the way you want it.

Dave winslow, tell us about auto financing now.

You have to hold onto the car for 60 to 72 months?

There is quite a shift in the industry.

The rates of lowered, but to your point, they have extended out in time.

A lot of people looking at new dealership websites, a lot of that is being driven by the fact that they can get the vehicle they want, they are aspirational for.

When those terms get extended out, it opens up an array of vehicles that people can look at and get into.

The effects of course -- they are longer-term.

People can get into the car that may have been won or two points up from what they were looking for as far as the model, but now they can get into those with the longer finance rates.

It is opening up a whole new market for new vehicles.

Getting them into the vehicles aspirational he they were looking for.

They were spending a lot of time looking for the vehicles on the dealership website, and of course going into the dealership to purchase them and that 30 to 90-day time frame.

What about an array of problems?

If you are buying a car with a 60 or 72 month term, they may sound good now, but asked for two months 50. what does it look like -- but fast-forward to month 50? what does that look like?

The average vehicle is seven years old.

In theory you could pay the loan and still own it for four -- four years after you pay it off.

It is not too big a deal.

You do hope it will not be a problem with people having these long loans, having default situations -- or negative equity and the automobile.


That is the unfortunate thing.

Initially all of that money is going to interest, so you're going to be upside down and you have a seven-year loan.

So, dave, you better like the car you get today, because you may be stuck with it for a while.


A seven-year term is a long time to keep a vehicle.

To karl's point, people are keeping cars longer.

The is -- that is riding digital advertising.

The product on the market is better than it has ever been.

All the manufacturers are releasing more innovative products.

We saw it with the jeep and the grand cherokee.

As long as people are patient and wait out that 6, 7 years, that equity will him back and they will be in the buying cycle again at that point.

Dave winslow, what do you drive?

I drive and audi s4 and we have a mini van to all the kids around.

Karl brauer, what is your vehicle of choice?

This text has been automatically generated. It may not be 100% accurate.


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