After three years, new cars are finally selling again

PASCAGOULA, MS (WLOX) - For three years, the auto industry has been hammered by the recession, and tight credit. A recovery of sorts may now be underway. Sales of new cars in the U.S. increased by more than 8 percent last month compared to a year ago. Truck and small SUV sales were up by more than 11 percent.

Those numbers have coast automobile dealers smiling. Bobby Dalgo is one of them.

"We're seeing our sales increase. We're just waiting for everything else to catch up, construction, insurance rates dropping down so people can build and buy houses," Dalgo said. "That's what we're waiting on, but our business is up."

The same is true for most dealers and their makes and models, foreign and domestic.  Phillip Pogue is a dealer general sales manager.

"We are trending in the right direction. We're seeing a lot more customers and a lot more shoppers," Pogue said. "And the banks are starting to loosen up for us. So all in all, it's a lot better than it was. But turning the corner? I think it's too early to say."

While dealers are optimistic about the economy, the people they deal with are having a change in attitude as well. Another sales manager, Jerry Albritton, sees it every day.

"We hear less people worried about it because our traffic is up, and if traffic is up, then people are obviously less worried about their jobs," Albritton said.  "I think, overall, the economy is turning.  I think it's getting much better and 2012 should be a great year."

There are many reasons why new car sales are on the rise, but one of the more important reasons is this: The price of used cars has risen dramatically in just the past few years. So many people are saying why buy used instead of new when there's so little difference?

"They've gone up a thousand or two thousand dollars year over year for used car prices.  They usually don't go up, they go down," Dalgo explained. "So since they've gone up, there's a very small margin between a new and used car, and that's helped our new car sales."

And any help is very much appreciated.

The only type of vehicle that did not see a dramatic uptick in sales last month were large SUVs.  Dealers say people are buying smaller, more fuel efficient cars and SUVs to combat high gas prices.

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