Jump to content
Create New...
  • William Maley
    William Maley

    Rise In Automotive Sales Has Some Analysts Worried

    William Maley

    Staff Writer - CheersandGears.com

    October 15, 2013

    On the face of it, sales for new vehicles haven't been better. Total sales for new vehicles could reach 15.5 million this year and some analysts believe that 2014 will see total sales reach 16 million vehicles. But with increase in sales, warning signs are appearing in automotive loans and leases which could put an end to the increases.

    Automotive News that the average loan length has gone up to 65 months (about five and a half years). While the longer length means a lower payment, it also means that many consumers will still be in the process of paying their old vehicle off when they decide to buy a new one.

    Also seeing a rise is the amount of subprime loans. During the second-quarter of this year, subprime loans accounted for 27.4 percent of loans made. That's an increase of two percent when compared to the same time last year. Now the good news is that delinquent loans (loans that three months or more overdue) are low and haven't increased with the number of subprime loans.

    Analysts worry that the gains gotten by 'easy credit' could easily tumble if interest rates are raised. That could lead to slower sales, increased inventory, and the piling on of incentives.

    Source: Automotive News (Subscription Required)

    William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster.

    User Feedback

    Recommended Comments

    I understand why analysts would (and should) be concerned with a high number of subprime loans. There is one thing they are not counting on: everyone needs transportation and public transportation thorughout most of the USA is not very good. (Compact cities do not count.) If there is another nasty recession where jobs are really scarce, expect all other expenses to be cut back except for car loan payments. There might be some more delinquent loans and even a few more repossessions, but it may not be that bad.

    Link to comment
    Share on other sites

    There are a lot more sub-prime buyers who've had problems over the last 7 years who have stabilized over the more recent term. These weren't particularly risky people, but just got caught in the economic downturn and have some credit blemishes for it.

    Link to comment
    Share on other sites

    they figure the risk of someone defaulting on a few hundred bucks a month is a lot less than that crazy home loan they would have been given 9 years ago.

    they want to keep sales up in the car market too, and not depress it permanently. I think it may be one of those deals where if you can breathe you will be able to get some kind of credit for a car loan. Maybe just not new all the time.

    Link to comment
    Share on other sites



    Join the conversation

    You can post now and register later. If you have an account, sign in now to post with your account.
    Note: Your post will require moderator approval before it will be visible.

    Guest
    Add a comment...

    ×   Pasted as rich text.   Paste as plain text instead

      Only 75 emoji are allowed.

    ×   Your link has been automatically embedded.   Display as a link instead

    ×   Your previous content has been restored.   Clear editor

    ×   You cannot paste images directly. Upload or insert images from URL.


  • google-news-icon.png



  • google-news-icon.png

  • Subscribe to Cheers & Gears

    Cheers and Gears Logo

    Since 2001 we've brought you real content and honest opinions, not AI-generated stuff with no feeling or opinions influenced by the manufacturers.

    Please consider subscribing. Subscriptions can be as little as $1.75 a month, and a paid subscription drops most ads.*
     

    You can view subscription options here.

    *a very limited number of ads contain special coupon deals for our members and will show

  • Similar Content

  • Posts

    • Those that cannot accept a multi-cultural world and immigration deserve to lose everything. I will stay professional, but believe that our North American Economy is about to get far worse over the long term than it is now. It is amazing how people do not seem to realize that the first two years of a new president is dealing with the ramifications of the last president. The high inflation was due to the failed policies of those before. We now have low unemployment and a strong economy. Will be interesting to see how it ends.
    • I say, let it get worse.  The people have spoken and this is what the MAJORITY voted for.  He even got the popular vote.  Therefore the people of America have spoken.   This is what they want.  This is what they feel comfortable with.   But I dont want to hear ANY whining from ANYBODY about what possibly may happen with him Him in power.  Fool me once,  shame on you!  Fool me twice, shame on me?   Technically this is how that saying goes.  But you never know. Maybe it really IS the lefty libtards that are the problem.   Hopefully it IS the lefty libtards that are the problem and the Messiah Trump will BE the solution to ALL of our problems.   I will be the first one to apologize if He actually does fix America's and Canada's problems.  And unite ALL of the world and the world gets to sing Kumbaya ALL in unison. Hopefully He is the next coming of Christ.   Keeping my fingers crossed but I aint holding my breath if you know what I mean.   
    • @oldshurst442 This pretty much sums up just how bad it is going to get. Trump's economic plans would worsen inflation, experts say | AP News
    • Not just iPhones... He tariffed Canadian wood the first time around as Pres and the prices of wood skyrocketed so American home builders bought American wood which was and is more expensive than Canadian wood.  I guess that is good for American wood producers. But for the fact that house prices also skyrocketed.  And considering that Canada and US have a more or less good trading thing going on...so not that good.  Not for the US and not good for Canada.  But Donald thinks otherwise. And all the folk that voted for him this time around think that the economy will get better?  I hope so for their sake. But Elon and Jeff B's billions rose quite a bit upon the announcement of his re-election.  I wonder if those  people that voted for him, I wonder if their wealth also rose instantly?    You poor bastards... You have no idea what is coming to you... (those that voted for him.  With the excemption of the rich of course)     Donnie Rides Again
  • Who's Online (See full list)

    • There are no registered users currently online
  • My Clubs

×
×
  • Create New...

Hey there, we noticed you're using an ad-blocker. We're a small site that is supported by ads or subscriptions. We rely on these to pay for server costs and vehicle reviews.  Please consider whitelisting us in your ad-blocker, or if you really like what you see, you can pick up one of our subscriptions for just $1.75 a month or $15 a year. It may not seem like a lot, but it goes a long way to help support real, honest content, that isn't generated by an AI bot.

See you out there.

Drew
Editor-in-Chief

Write what you are looking for and press enter or click the search icon to begin your search