Despite the auto industry's lament that it's stuck with tons of unsold cars, it turns out Americans are slowly starting to buy more vehicles and are putting down bigger dollar amounts than they used to, causing a surge in revenues.
In fact, TrueCar, a website that connects buyers with dealers, says the money brought in from car sales has shot up by 61 percent since 2009. This year alone Americans are set to buy 6 percent more cars than they did in 2013, making it the biggest year for car buying since 2006, BloombergBusinessweek reported.
TrueCar president John Krafcik, former CEO of Hyundai North America, says car people have been seriously downplaying the state of the auto industry.
"It's extraordinarily relevant that people are willing to pay more for automobiles," he told Businessweek. "Especially when the narrative has largely been that cars are playing less of a role in our lives."
Businessweek says there are four major reasons why Americans are willing to pay more for their cars, ranging from a desire for bigger, more luxurious cars to an obsession with modern gadgets in the latest models.
People want larger cars to fit their big families, and that means higher price tags. Bloomberg also reported that crossover vehicles are more popular than standard sedans these days, and luxury versions are even more in demand.
Plus, 1-percenters are skewing the market. The ultra wealthy are buying cars that can jump into the seven-figure range. Consider Porsche's 918 Spyder, which has an entry level of $850,000, and Ferrari's limited edition $1.35 million sports car. Even Mercedes-Benz is developing an armored sedan that will likely sell for around $1 million.
Car shoppers also gravitate toward the latest, coolest technology like navigation, video screens and safety features. And more stuff costs more money. Plus, low interests rates are helping them splurge.