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October Surprise? Auto Sales May be Strongest Since '09

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Marc Romanelli | Riser | Getty Images

Could it be automakers are getting a Halloween treat early?

Both TrueCar.comand Edmunds.com are predicting October will have a sales pace of 13.4 million vehicles.

If those predictions hold up, October would register the strongest monthly sales pace since August of 2009 when Cash for Clunkerscreated a rush into showrooms.

So what's behind the increased sales?

It certainly isn't because of lush incentives alone. The industry average is roughly $2,600, up just 4% up from October of last year. And yes, the deals being offered by Toyota and Honda are among the richest those auto makers have ever offered, but they are not outrageous compared with the competition.

In reality, what we're seeing is the pent up demand from people either deciding, or being forced, to dump their old cars and trucks. The economy may be struggling, but for many people they can't put off buying a new car any longer. It helps that credit availability is much better today than it was a year ago.

This end of year increase in sales is not a total surprise among the automakers. Several executives have predicted since early this year that sales would pick up as we head into the new year. Accordingly, they've been gradually increasing production.

While all of this is welcome news for auto dealers, most are remaining cautious. Consumer confidence remains fragile, and that's one of the primary drivers for auto sales.

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