Cha-ching: Auto sales to reach $1.1 trillion

2014 is shaping up to be a blockbuster year for the auto industry.

According to a forecast released by TrueCar on Thursday, combined new and used auto sales are likely to rise 8.3 percent to $1.1 trillion in the U.S. alone—momentum that isn't expected to slow anytime soon.

A salesperson (left) shows vehicles to a shopper at a Toyota dealership.
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The data service firm said it expects Americans to purchase 54 million new and previously owned cars, trucks and crossovers by year's end. But it's not just volume that's driving the revenue boost. Thanks to a slowly improving economy and a drop in gas prices, automakers have been able to raise prices at a time of strong demand.

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"The overall buying power in the auto market sometimes isn't fully appreciated," said John Krafcik, president of TrueCar. "To put this in perspective, new vehicle revenue alone will surpass the value of new single family homes in the U.S. nearly three times. It's a remarkable year for the industry as both sides of the market are seeing notable growth and commanding strong pricing power."

New car sales have exceeded industry forecasts for most of 2014, a trend analysts expect to continue through December. Some industry experts are anticipating even better numbers in 2015, saying the market for new car sales could match or exceed previous peaks in the 17 million range.

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How much more prices will rise in the process remains to be seen. But according to TrueCar, the price of the average new vehicle jumped 1.9 percent compared to last year, to $31,831. Used vehicle prices, meanwhile, have increased 5.1 percent, to an average $16,335.

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The sharp price gains in previously owned vehicles have been due, in part, to a shortage of "nearly new" off-lease vehicles coming out of the industry's worst downturn in decades. TrueCar said it expects this supply to be more normal in 2015, with 10 percent more vehicles that are five years old or younger being available.

"This is the last year we expect used supply to be impacted by the recession's pullback in new vehicle buying," said Larry Dominique, head of ALG, the analytics division of TrueCar.

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That could mean a price break for used vehicle buyers. Hearst's Black Book, which tracks auction and dealer traffic, has noted that prices have already begun to fall in some previously owned segments of the market.