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Truck Sales Outpacing Cars

Posted: Nov 08, 2010 10:22 a.m.

Trucks sales are moving at a brisk pace -- which couldn’t make the Big Three happier. But, many analysts think you should be happy about it too.

“Trucks outsold cars by the highest margin in nearly five years in October, a sign the economy may be starting to improve,” writes the Associated Press.

First, why you should be happy about the news: “Strong truck sales make economists giddy because they mean people are willing to spend money again. Small business owners feel comfortable enough to buy a new pickup truck or delivery van for their company; and regular folks are confident enough in their jobs and finances to take on beefy SUV payments,” explains AP.

Forbes explains that the news is good for the Big Three because “truck sales still account for a disproportionate amount of profit for General Motors, Ford Motor and Chrysler.”

The bump in truck sales may help explain why Chrysler is doing better than expected. Bloomberg writes that Chrysler “reported an $84 million third- quarter loss that was smaller than analysts estimated as U.S. sales improved faster than its American rivals.”

Aside from an economy on the mend, analysts say that the increase in truck sales is helped by a boost in consumer spending (personal savings rates are down compared to this past spring), affordable gas and hefty promotions. “Ford, which just wrapped up a month of zero-percent financing offers on its F-series pickup trucks, saw sales jump 24.2 percent in October,” writes AP.

Improved truck sales don’t necessarily mean that truck shoppers will see reduced incentives and discounts. Trucks and large SUVs are such profitable vehicles for car makers that there is usually a fair amount of wiggle room on the price.  Plus, since incentives are what helped move truck sales up, car makers may be unwilling to turn them off.  Qualified buyers can currently get 1.9 percent financing on the Chevrolet Silverado, while over at GMC you can choose from 1.9% financing or $2,500 cash back on the Sierra.  Dodge is offering a dizzying array of incentives on Ram trucks, including up to $3,500 on some models in some regions.

If you’re in the market for a new car, check out the U.S. News rankings of this year's best cars as well as this month's best car deals. Also, be sure to check us out on Twitter.