SCHAUMBERG, Ill.-New car sales continue to climb, late-model mid-sized used cars are showing a sharp drop in value, and consumers feel they have more money in the monthly budget for a car loan but don't want to go long term, especially on a lease.
Those data points were shared by Black Book, Experian Automotive, and Swapalease.com.
Experian reports that total vehicle purchases were up by more than 370,000 units, going from 3.2 million registrations in Q2 2011 to 3.6 million in Q2 2012. The metric has been steadily increasing since the economic downturn, when vehicle purchases dropped to 2.5 million in Q2 2009, the company pointed out. Toyota posted the largest unit sales gain with 145,000 additional registrations, followed by Chrysler with more than 83,000 new registrations.
In the used car arena, the average age of vehicles increased from 10.6 years in Q2 2011 to 10.8 years in Q2 2012, according to Experian. Late-model mid-size used cars are starting to see noticeable price drops because of the introduction of several 2013 mid-size models, observed Black Book, Gainesville, Ga. "The mid-size segments are already being impacted by the flurry of newly redesigned models planned for this fall," said Ricky Beggs, senior analyst. "The redesigned mid-size cars will have a prolonged impact on prices for late-model used cars in the same segment. Traditional used-car shoppers of mid-sized cars will instead take a closer look at the new models that come with many new designs and technology features, as well as better fuel economy."
With leasing, lenders should be aware that consumers now feel like they can pay more monthly, uncovered Cincinnati-based Swapalease.com in a national online consumer survey. The company found that 43% of drivers say they can increase their monthly car payment as much as $150 because of their job status. However, only 30% of those polled are comfortable with a car payment commitment beyond two years because of long-term employment confidence.