Americans are buying cars again

As the the nation's largest automaker, GM has a pulse on industry-wide trends, and the company said overall car sales to US consumers are now back to where they were before auto sales fell sharply in the spring following Covid-fueled job losses and widespread work from home.

It's an important milestone for the industry, and a much faster recovery than many experts were forecasting. GM made the announcement Tuesday alongside a release of its own fourth-quarter sales figures.

It doesn't mean that auto sales are all the way back: Fleet sales, which typically make up about 20% of overall US sales, are still way off, GM said. That's especially true for sales to rental car companies, which account for roughly half of fleet sales.

At GM specifically, fourth-quarter sales were up nearly 5% from a year ago -- but it's not a fair comparison, as GM's fourth quarter 2019 sales were impacted by a prolonged strike at the automaker. GM's full-year sales were down about 12% from 2019.

GM said its average transaction price in the fourth-quarter was a record $41,886. The full-year average of $39,229 also set a record.

GM also said car buyers are spending more on the vehicles they are buying, choosing more expensive models like larger SUVs and upgrading to more expensive package options -- all good news for automakers. The strong retail numbers also mean the automakers didn't need to offer as much in terms of incentives to attract buyers.

Other automakers are due to report fourth-quarter US sales later Tuesday or Wednesday. Those competitors are also forecast to report stronger sales than in the second and third quarter, but many will report a drop compared to a year ago, because unlike GM, their fourth quarter 2019 sales were not impacted by a strike.