Low rates attracting buyers

young graduates went shopping for a new car, said Kelley Blue Book analyst Alec Gutierrez. Relatively high gas prices also may have steered some buyers to more fuel-efficient models, he said. Gas averaged $3.60 a gallon nationwide in June, or 10 cents more than a year ago.

Sales of Ford’s recently updated Fiesta subcompact more than doubled, while the Hyundai Elantra small car saw a 22-percent gain.

Family-haulers also did well to start the summer road trip season. Honda said sales of its Odyssey minivan jumped 26 percent. The Toyota RAV4 SUV was up 36 percent, while sales of the Jeep Grand Cherokee SUV rose 33 percent.

Consumer confidence hit a six-year high in June. And the Standard & Poor’s 500 index had its best first half since 1998, up 12.6 percent. Those measures correlate strongly to auto sales, since people have to feel optimistic and financially secure before buying a car.

At the same time, rates on auto loans remained near historic lows in June. The rate on a fouryear new-car loan is averaging 2.7 percent, according to Bankrate.com.

Federal Reserve Chairman Ben Bernanke has pledged to keep shortterm interest rates at record lows until the unemployment rate hits 6.5 percent, if not longer. The unemployment rate is currently 7.6 percent. Auto loan rates are pegged to shortterm rates, so car buyers should enjoy low financing terms for a while longer.

Automakers can also keep rates low through their captive finance companies, Edmunds.com’s Caldwell said. She expects car companies to help keep rates low for a while, since raising them could hurt sales.

Auto executives said Tuesday that they’re not too concerned about loan rates, because there are so many other posi- tive factors encouraging buyers. Ford’s U.S. sales chief, Ken Czubay, pointed out that there are still 4 million pickups on the road that are 12 years old or older and will likely need to be replaced soon.