Dealers smiling as new car sales soar

Car sales are accelerating to record highs, with no signs motorists are reaching for the brakes.

Last month was the strongest May since 1990 for new passenger car sales, with more than 6000 driven off the lot.

Sales for February, March and April also climbed to 15-year highs.

The growth follows the biggest year on record for passenger car sales, with just under 230,000 new and used cars sold last year.

Old favourites dominated the sales table for 2004 - the Holden Commodore led the pack ahead of the Ford Falcon, Toyota Corolla and the Honda Accord.

Industry experts attribute the growth to a strong economy and more affordable new cars.

Motor Industry Association chief executive Perry Kerr said consumers were feeling wealthy, partly because of the buoyant property market.

A shortage of used cars between three and five years old also meant consumers could be confident they could later sell their new cars for a good price. "If you're trading in your vehicle and it's not that old you're getting a better price for it, so you can change over and change up," Mr Kerr said.

The market was expected to remain strong for the rest of the year, he said, with projections indicating this year's sales would exceed last year's total. "We're looking for another record year."

Despite pessimistic predictions from recent business confidence surveys, commercial vehicle sales hit 2358 last month - a 26 per cent increase on last May's total.

The managing director of Newmarket European, Ian Gibson, agreed strong sales were a sign of a solid economy. "A lot of people now can afford to commit to $30,000. It's not really going to put too much of a dent in their monthly income if they finance it."

The strong dollar had also made new cars more affordable, he said.

"It's cheaper to buy a new car now than it's ever been before."