Arizonans finally appear ready to trade in that old junker for something a little more reliable.
New figures from the state Department of Revenue show sales of more than $450.7 million last month from motor vehicle dealers. That’s 11 percent higher than the year before.
And while all types of sales are increasing as the state and the nation emerge from recession, the pace of vehicle sales is running about 50 percent higher than the average of everything else.
Economist Dennis Hoffman of the W.P. Carey School of Economics at Arizona State University said it’s a simple question of pent-up demand.
“We went two to three years of unbelievably low auto purchase rates,’’ he said.
He said that in 2004, while the economy was still steaming along, vehicle purchases totaled more than 7.5 percent of total income earned in the state. But by 2009 it had plummeted to less than half of that rate.
Hoffman said things still are not the way they were back before the recession, pegging current auto purchases at about 4.1 percent of state personal income.
“So we’re climbing back up,’’ he said.
Bobbi Sparrow, president of the Arizona Automobile Dealers Association, said her members also have seen the return of willing shoppers.
“People were holding out,’’ she said.
“They were worried about buying new ones,’’ Sparrow continued. “Now I think they understand things are starting to look better.’’
She said that better economic news is leading to a change in spending habits.
“People have been just trying to take care of the vehicles they have and not buy new,’’ Sparrow said. “And now, they’re finally going back out.’’
Hoffman said some of that is pure engineering: The older vehicles that people have been nursing along are starting to wear out. But he said other factors are getting people onto the car lots.
“The deals are pretty good,’’ he said.
“For those that can get credit, boy, the credit terms are fantastic,’’ Hoffman said, including zero percent interest financing for four years or more.
“The manufacturers have been putting forth a lot of extra effort in terms of getting those deals out there for consumers,’’ Sparrow agreed.
And Hoffman said some of the boost in vehicle sales is purely psychological.
“They’re feeling a bit more secure in their jobs,’’ he said of those who have managed to weather the recession without being laid off. “They’ve made it this far, they’re still employed, they’re probably going to make it.’’