2015 Sonoma County car sales highest in a decade

When Kirstyne Lange’s 2011 Toyota Corolla started having electrical problems last year, she had a choice.

She could continue forking over hundreds of dollars to her mechanic to try to track down the problem, or she could trade it in an upgrade to a more reliable ride.

A few years ago, her career track less secure, the 26-year-old probably wouldn’t have felt confident enough to buy a new car. But last year Lange, now an assistant admissions director at a San Rafael high school, was feeling better than she had in years about her financial future.

She was gainfully employed, close to finishing her master’s degree and, having just turned 25, felt like she deserved a car that reflected her values.

“I wanted something cute and sporty, but not gas-guzzly,” Lange said last week.

So Lange went to Hansel Toyota in Petaluma and, after some hard bargaining, bought a Scion tC for just under $20,000.

Now she’s commuting in style and comfort in a fuel efficient, two-door coupe packed with modern technologies, like a touch-screen enabled audio system.

“It’s actually a really great road trip car,” Lange said, noting that she has taken it to Las Vegas, Arizona and Southern California and still loves it.

Sonoma County car sales kicked into high gear last year, with dealers selling more new cars and trucks than any time in the last decade.

Local dealers sold 21,957 cars and trucks in 2015, an 8 percent increase over 2014 and their best showing since 2005, when before the recession and housing market collapse, they sold 21,942 new vehicles, according to Experian information services group.

The local results were even stronger than the national sales jump of 5.7 percent in 2015, which pushed sales to 17.5 million light vehicles.

It’s been a long slog back from that brink, when in 2008 taxpayers bailed out Chrysler and General Motors and in 2009 local car sales tanked to under 10,000 vehicles, jeopardizing the livelihoods of local dealers.

But the rebound in the economy and real estate market, low unemployment, easy credit and low gas prices are all fueling a resurgence in new car buying.

“2015 was the best year ever for my company,” said Henry Hansel, owner of the county’s largest auto group.

That’s saying something for a dealership group that’s been around since 1961 and sells 12 brands in eight auto centers in Santa Rosa and Petaluma.

Sales group wide were up 11 percent by volume, slightly higher in revenue, said Hansel.

While low interest rates and gas prices are important, Hansel said the single greatest driver of new car demand is consumer confidence, which he said has returned at all levels. Combine that with marked improvement in vehicle features, and the buyers are coming out of the woodwork.

“The offerings from manufacturers today are safer, more comfortable and are just more appealing, so I think that’s getting people off the fence,” said Hansel, who has also made substantial investments in his dealerships in recent years.

On a percentage basis, Subaru had the most robust gains in the group, up 35 percent in volume, Hansel said. Ford sales surged 12 percent, while Toyota and Honda sales enjoyed 8 percent increases, he said. Even Volkswagen, which had a disastrous year in terms of brand reputation following revelations of widespread emissions cheating, eked out a 1 percent increase, Hansel said. He attributed that to fiercely loyal customers, aggressive incentives, and the fact that it’s the only mass-market German auto brand.

Jim Bone, co-owner of the Jim Bone Auto Group, which operates Nissan, Kia and Fiat dealerships on Santa Rosa Avenue, agreed that car makers have really stepped up their game in recent years. Nissan has done a particularly good job of updating its wide lineup of vehicles with attractively redesigned vehicles.

“We just got lot of fresh faces for 2015,” Bone said.

These include updates of the popular Altima, Sentra and Maxima sedans, as well as the redesigned Rogue, which is competing well in the red-hot compact SUV market against rivals like the Honda CRV and the Toyota Rav4, Bone said.

Sales of new Nissans were up 26 percent last year, Bone said.

There is a “huge pent-up demand” out there for new vehicles because so many people held off on upgrading as the economy recovered from the recession, he said. That plus improved reliability have pushed the average age of the cars on the road up to over 11 years.

But the technology in cars and trucks has improved dramatically in the last few years. These include features such as auto parking, lane departure warning systems and automatic braking detectors.

“It’s technology that really serves a purpose in terms of customers’ convenience and safety,” Bone said. “It’s not just gadgetry.”

Lisa Musella said she was blown away by the new technology in today’s cars. When she and her husband moved to Santa Rosa from the Los Angeles area a year and a half ago, she was driving a 20-year-old Lexus sedan that had been her grandfather’s.

The 39-year-old publicity manager for the Santa Rosa Symphonic Chorus liked the car, but the gas mileage was horrible. Then after it inexplicably lost power driving up the Cotati grade, Musella sought out something more reliable.

“We had just bought a house, so the timing of my car dying was not good,” she said.

Seeking the reliability she remembered from her days owning an Accord, she went to Manly Honda in Santa Rosa and walked out with a sporty new Civic EX sedan for about $22,000. She said the technology built into the car, such as satellite radio, voice texting and doors that automatically lock when she walks away from the car, just wowed her.

“There are all these cameras and sensors that are all new to me, and I totally love it,” Musella said.

While low gas prices are contributing to strong demand for traditional gas-powered vehicles, they’re having the opposite effect on some all-electric models.

Average gas prices in the state have been on a three-and-a-half year slide, falling 42 percent from their high of $4.67 in October of 2012 to $2.71 last week.

Lower gas prices and increased competition in the all-electric category have sales of the pioneering Nissan Leaf wilting, Bone said.

The model, first introduced in 2010, now has competition from new all-electric entrants from Fiat and Kia, among others. Its sales were down 30 percent last year, Bone said.

Those areas of weakness are being more than offset by the market’s overall strength. Demographic trends are also playing a role, he said.

The Nissan brand is very popular with Latinos, and sales are benefiting from the surge in that population in the county, Bone said.

Latinos now make up 26 percent of the population in Sonoma County, a 300 percent increase over 20 years ago, according to the Sonoma County Economic Development Board. Last week at the Santa Rosa Avenue dealership, Francisco Sanchez took delivery of a new Nissan Frontier crew-cab, a pickup truck with room for his growing family and more. The 37-year-old janitor has been driving a 2001 Honda Civic, but with three kids, ages 17, 13, and 7, and plans to start a new business, he needed something bigger.

Sanchez, who grinned as he accepted the keys from salesman Javier Ronquillo, said he plans to begin renting inflatable bouncy houses for birthday parties, and needed the pickup truck to haul around the equipment.

Nearby, waitress Josie Ortega and Martin Chaparro, were eying a Nissan Armada, a large SUV. They were looking for a replacement for her 2004 Cadillac Escalade, which had several minor problems creep up in recent years.

With three kids and two other young family members she shuttles around town to and from school and other events, Ortega said she needed something large and reliable. But she wasn’t sure they’d be able to get a new vehicle in their $30,000 price range.

The Armadas run from the high $30,000s to nearly $50,000, depending on options. But Ortega spotted an advertisement promising $6,000 off a 2015 model, and she thought that might get them within striking distance.

Hoping to finance no more than $15,000 of the cost, her hopes of getting into a new vehicle would all depend on the trade-in value for her 12-year-old Escalade, she said.

“That’s a pretty tight budget,” she said.

All the high-tech features in today’s new vehicles are coming with a cost, as the average cost of a new car increased 3.4 percent in 2015, to $33,543, according to Kelley Blue Book, the automotive research and valuation company.

That’s worrisome to Hansel, who said there are signs of “headwinds” in the future as consumer debt levels climb.

The higher car prices are spurring strength in the leasing side of the business, however, as drivers are looking for ways to get the best of both worlds – the latest features and a low cost of ownership.

“Cars are changing so quickly now that you can lease and then in two, three or four years, you can decide if you want to keep it,” Hansel said.