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US auto sales surprise with strength in June

By WTOP Staff

DEE-ANN DURBIN
AP Auto Writer

DETROIT (AP) — U.S. auto sales grew at the fastest pace in eight years in June, surprising the industry and setting it up for a strong second half of the year.

Sales rose 1.2 percent over last June to 1.4 million cars and trucks, according to Autodata Corp. GM, Toyota, Hyundai and Nissan all saw increases over last June. Honda sales were flat, while sales at Ford and Volkswagen were down.

June’s annualized sales rate — which estimates annual sales if they stayed at the same pace every month — was 16.98 million. That was the fastest pace since July 2006 and higher even than May, which also surprised the industry with its strength.

Jesse Toprak, an auto analyst for the car buying site Cars.com, said buyers are out because of low interest rates, a strong stock market — which improves confidence — and great new vehicles. An easing in lending standards is also adding more potential buyers to the market.

“We’re getting set up on a very good footing for the second half of the year,” Toprak said. “The last two months have exceeded expectations, which tells us that the consumer demand is very strong.”

Toprak said he may increase his annual sales forecast from 16.1 million vehicles to 16.3 million based on May and June sales. That compares with 15.6 million vehicles sold in the U.S. last year.

May sales were helped by five sunny weekends and the Memorial Day holiday, which got June off to a slow start. But Ford’s U.S. sales chief John Felice said sales picked up at the end of last month as automakers started promoting Independence Day sales.

Analysts saw plenty to like in June. Forecasting firm LMC Automotive said automakers are carefully balancing production with demand, which has helped them maintain profits and cut back on big incentives that can eventually hurt resale values.

TrueCar estimated incentive spending rose 1.6 percent in June to an average of $2,735 per vehicle. Both GM and Nissan lowered incentives by 12 percent from last June.

While incentives may be lower, buyers are taking advantage of good lease offers and low interest rates. The average interest rate for a 60-month new car loan is 3.18 percent. Three years ago, that was closer to 5.5 percent, according to Bankrate.com.

GM’s sales were up 1 percent over last June despite a continuing parade of recalls. GM’s total safety recalls for the year reached 29 million vehicles on Monday, when the automaker announced six new recalls of 8.4 million cars. Two of those recalls were for ignition switch problems, the same issue that began the company’s recall crisis in February.

Kelley Blue Book analyst Alec Gutierrez said GM is benefiting from its new lineup of SUVs, which hit the market at a time when buyers are gravitating toward bigger vehicles. Sales of the Chevrolet Tahoe large SUV nearly doubled to more than 11,000, while sales of the GMC Yukon more than doubled to 3,946. Cadillac Escalade sales were up 57 percent.

Toyota’s sales rose 3 percent as the Camry and Corolla sedans both posted double-digit gains. Sales of the new 4Runner SUV were up 42 percent.

Ford’s sales dropped 6 percent as the company cut back on discounts for the F-Series pickup, which is the best-selling vehicle in the U.S. Ford is trying to limit sales of the outgoing F-Series as it prepares to close its truck plants and change over to a new, aluminum-sided F-150 pickup, which will go on sale late this year. F-Series sales fell 11 percent in June to 60,560.

Other automakers said:

— Chrysler’s sales jumped 9 percent on strong demand for the new Jeep Cherokee SUV and other models. It was the company’s strongest June since 2007, with gains for the Jeep, Ram, Dodge and Fiat brands.

— Honda’s sales were flat. Sales of most models declined, including the Odyssey minivan and CR-V SUV, but sales of the Accord and Civic sedans were up.

— Nissan’s sales were up 5 percent on strong sales of the new Rogue SUV as well as higher car sales. Sales of the Sentra small car were up 68 percent.

— Hyundai’s sales rose 4 percent on the strength of the new Sonata sedan, which jumped 29.5 percent.

— Subaru’s sales were up 5 percent on strong demand for the new Forester, which was up 30 percent.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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