Gas prices may be rising, but that is not deterring a strong increase in auto sales. As automakers reported a 19.9 percent rise in sales regardless of the steep price at the pump in August. Overall, the automobiles sales have increased 14.7 percent in the last twelve months. Despite gas reaching $3.80 a gallon last month, according to the AAA Daily Fuel Gauge Report, auto sales hit double digits. It appears as if the economy may have received a much needed tune up.
Hybrids and small cars are leading the way to higher sales for automakers as consumers seek to replace older vehicles they've been holding on to with newer models that have higher fuel efficiency. These increases are partly attributed to Toyota and Honda recovering after the Tsunami in Japan as well as Detroit firms rolling out models with better mileage, according to the Times.
"The choices for fuel efficiency are so plentiful it's harder for a consumer to walk away because of gas prices," said Jesse Toprak, an analyst with TrueCar.com, told the New York Times.
Further, new loans with little to no interest have bolstered new car sales, according to the Detroit Free Press. As many as 8.5 percent of the purchases recorded between January and August were made with 0 percent financing. The Federal Reserve is utilizing a program called quantitative easing to keep interest rates low, thus encouraging banks to give loans and consumers and businesses to seek them. The auto sales numbers indicate to political leaders, bankers and economists that the policy is working, according to the news source.