Increased consumer confidence is also a factor in this year's auto sales gains. On Tuesday, automakers reported solid increases in September. Total sales for the month are expected to exceed 1.1 million vehicles, up 11 percent from September 2011.
Analysts expect sales to total about 14.3 million this year, up from 12.8 million last year. Sales peaked at 17 million in 2005 before hitting a 30-year low of 10.4 million during the recession in 2009.
Auto purchases have been robust in part because people are replacing cars they kept during the recession. The average age of vehicles on U.S. roads is nearly 11 years.
Bargain loan rates are also fueling sales. Some banks and credit unions are offering 2 percent financing to auto buyers with good credit. Rates from some automakers' finance companies are even lower.The auto industry's recovery could inject itself into Wednesday's presidential debate. Obama has boasted that the bailout of General Motors and Chrysler helped save more than 1 million jobs. GM and Chrysler have since returned to profitability and hired thousands. Detroit's automakers build most of their cars in the Midwest, including Ohio, an election battleground state. Romney has countered that the auto companies should have gone through bankruptcy with private funding and been allowed to recover with government-backed private loans. The steady rise in home prices may also be affecting voter perceptions of the economy. The price increases coincide with higher sales fueled by record-low mortgage rates. The gains could embolden people who had been spooked by their shrunken home values or wary of selling or investing in a home. A gauge of prices calculated by CoreLogic, a private data provider, jumped 4.6 percent in August compared with August 2011. It was the sharpest year-over-year gain in more than six years. Other home-price measures have also risen. The Standard & Poor's/Case Shiller index rose in July compared with a year ago, a second straight increase. And an index compiled by a federal housing regulator has reported annual increases.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV