Domestic and Foreign, New and Used, Luxury and basic transportation models are all showing signs of pent-up demand for auto dealers around the country. Sparked in part by the bankruptcy of Chrysler and GM, 1800 pending dealer closings and promises of scarce inventory on popular models, consumers have flooded dealer showrooms filled with hope of scoring a “giveaway” deal.
While rebates approach six and eight thousand dollars and interest rates hover between 0% and 5.99%, the eager car buyer is finding his trade-in severely under-valued and attractive financing options limited to those with superior [read:720 FICO] auto credit scores.
“This has been the problem for the past 18 mos.” Jim M., LV Import/Domestic dealer, laments. “The clients are UPSIDE-DOWN (owe more than it’s worth) on their car, have little cash to put down, and the banks won’t finance the negative balance , plus the taxes and fees.”
National auto auctions are seeing record numbers of cars, including many brand new ’08 and ’09 models, direct from targeted Chrysler, Jeep, Dodge and GM dealers. Used car prices have remained stable, even with the inventory influx, as demand for used cars has outstripped new car purchases the past year. Auto loans on used cars have been cut significantly, putting pressure on consumers to put down more cash, go longer term (avg. car loan is now 72 mos./6yrs.) and pay higher interest rates for less than perfect credit.
GM and GMAC have promised to assist remaining Chrysler/Jeep/Dodge dealers with auto loan financing, yet the bankruptcy has put a halt to dealer agreements and buying. Much of the sales spurt started with Memorial Day weekend, came from buyers with lease expiration’s, cash or positive trade-in equity.
As more American’s stay closer to home this summer, sales of vans and SUV’s continue to increase. With gas prices low, consumers are not shunning four day family drive-aways to the mountains and shores.
Chrysler Town and Country, Toyota Sequoia, Nissan Armada and Honda Odyssey are best-sellers this summer season. Stow ‘n Go folks, summer selling season is upon us.
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