New car sales have remained strong in 2016, although it’s unclear whether they’ll break the record 17.5 million units sold last year. Sales have been boosted by a strengthening economy, rising wages, low gas prices and pent up demand following the recession.
That strong demand by car buyers is also fueling an increase in prices, with the transaction price for light vehicles averaging about $35,000 in November, nearly $600 more than a year earlier, according to Kelly Blue Book. The rising prices reflect continued consumer interest in more expensive trucks and SUVs rather than cheaper, smaller cars.
Easy credit for car loans has certainly helped sales, though there are growing signs of trouble in the auto loan market. The percentage of subprime borrowers who are more than 90 days late on their loan payments hit its highest level since 2010, according to new data from the New York Fed.
The number of cars sold and U.S. prices for those cars have increased for seven straight years, although analysts believe new car sales might be at or near a peak as higher prices push buyers to start looking at high-quality used cars instead.