On the heels of positive reports from the nation's largest car makers, one industry analyst predicts car sales will reach double-digit gains in the new year. The National Automobile Dealers Association forecasts new car sales will top 12.9 million in 2011 thanks to higher trade-in equity and stronger consumer credit reports
However, Paul Taylor, NADA's chief economist, states there are outside forces that could derail that sales rate, most notably the real estate market. Negative trends in the housing market may prevent consumers from putting down money on a new car when their property value is in a state of uncertainty. "The problem in the real estate market is too many houses," Taylor said at the NADA Convention and Expo in San Francisco, which ends Monday. "The car market has too few used vehicles." Taylor added that used cars could play a very favorable role in purchasing power this year. Dealers have a lot to gain from a strong used car inventory, while consumers would benefit from strong trade-in value. Car sales in 2010 totaled slightly more than 11.5 million. If his prediction were to hold water, it would represent a 12 percent increase year-over-year.