It's good to be a car dealer again. Coloradans are buying more new cars these days than at anytime in the last decade, lifting the spirits of auto dealers after a bruising recession.
You can feel energy at Planet Honda in Golden, where Lisa and Michael Daley have fallen in love with a shiny new Honda CRV.
"It’s beautiful," said Lisa. "I named it already Ruby, because I’m getting a red car."
She wanted a small SUV, with the latest safety features, and, perhaps even more important, Bluetooth phone connectivity.
Lisa and Michael held onto their 2007 Honda Pilot through the recession. And they're not alone, on average people are keeping their cars for a record 11.5 years, according to IHS automotive. Now Lisa and Michael feel good enough about the economy to make a big purchase, and they’re paying cash for this new car.
"I think that Colorado has rebounded," said Lisa. "Much better, I think, than some other parts of the country. So I think that we’re lucky to live here, and so we do feel confident about that."
Nearing record growth
Lisa and Michael are part of a wave of pent-up demand sweeping auto dealers across state and the country. Car sales nationwide are expected to grow for a sixth straight year. If that happens, it would be the first time in the history of the auto industry. Haig Stoddard, Senior Industry Analyst with WardsAuto, said there's never been more than five straight years of growth.
And a noticeable difference these days is people are happy, according to the general manager of Planet Honda, Jeff Bejarano.
"Because they want to buy a car," said Bejarano. "During the recession, the people that bought cars had to buy cars. There was something wrong with theirs."
Coloradans bought 188,416 new cars in 2014, the most since 2002, and up 80 percent since the low point of 2009.
And that low point was the worst time in Lee Payne's long career in car sales. He owns Planet Honda and had to layoff a lot of people.
"I worked for free for a couple of years," said Payne. "Or actually I paid to work for a couple of years. So that wasn’t very fun either, but we survived it."
SUVs drive profits
Helping drive sales are high-dollar SUVs. Payne said the CRV is the best-selling car on the lot, by far.
Payne said falling gas prices helped, but so did the federal government’s new mileage standards that prompted innovation from car makers.
"New technologies and smaller engines producing more power and better gas mileage," said Payne.
And because SUVs are more expensive, they are also more profitable. This isn’t just good news for car dealers like Payne. The car industry in Colorado makes up about 20 percent of the sales tax base.
"That’s largely because it’s such a big purchase," said Tim Jackson, president of the Colorado Automobile Dealers Association.
He said SUVs are hot, but luxury models are also selling.
"People are buying a higher end of new car," said Jackson. "Instead of just the lowest point of entry, sometimes the highest point of entry."
That’s in part because interest and car makers are offering attractive incentives on lease rates. That helps make keep monthly payments affordable.
Planet Honda general manager Jeff Bejarano seems less interested in the type of cars people are buying from his showroom. He’s just excited to see people buying at all following the recession.
"It feels great," said Bejarano. "To finally come to work and know you’re going to have a good month or a good day or a good week."