Auto Loans Outlook Brighter in 2010

[Jan 6, 2010.]

 

Light Vehicle Sales Surged in December

Today's Financial Times reports that 2009 ended strongly for U.S. car sales. Ford did especially well, with its December 2009 sales up about a third over the same month in 2008.

Indeed, most manufacturers ended the year well, and, according to Ward's Automotive Group, light vehicle sales last month topped a million units, compared with 891,000 in December 2008.

However, the good news is tempered by other Ward's data that suggest that sales for the whole of 2009 were down to 10.4 million units, from 13.2 million in 2008. And by the FT's assertion that, "...much of the increase [in December] came from a surge in low-margin transactions...to car rental companies, and other fleet operators."

Auto Loans Drought Behind Some Carmakers' Woes

That makes sense. Because everyone knows that sales have been hit by a drought of cheap loans in the consumer sector of the auto business. Until recently, qualifying for auto loans meant either having a great credit score or being prepared to pay over the odds in interest.

But things are already looking brighter, with the Boston Globe running a story yesterday under the headline: "Looser credit helping to lift auto sales." And the piece went on to say:

...partly because of loosening credit, analysts expect more than 1 million cars and light trucks to have been sold in December, the best monthly performance since Cash for Clunkers in August.

Financial firms wrote 5.5 percent more car loans in the third quarter compared with the prior three months, Experian Automotive says. Fourth-quarter figures aren't yet available, but Jesse Toprak, vice president of the auto pricing tracker TrueCar Inc., said December saw an uptick in auto-loan approvals for consumers with average or above-average credit.

More Optimism Among Dealers

Also yesterday, mySA, the web site of the San Antonio Express-News ran a story about the light vehicle market. The reporter, David Saleh Rauf, spoke to the heads of two leading, local dealerships, both of whom expressed optimism for their businesses in 2010, and beyond, with one of them saying: "I see recovery next year. I see some of it already."

American Vehicle Manufacturers Still Face Challenges

One piece of unwelcome news that arose from Ward's figures is that, throughout 2009, buyers continued to favor foreign manufacturers. The most popular model was the Toyota Camry, which sold 321,000 units, almost twice as many as the most popular domestic car, the Ford Fusion (162,000 units). And the first five spots in the top-10 list were all occupied by Japanese vehicles.

Explore Your Auto Loans Options

Whatever your personal circumstances, and whatever sort of car you wish to buy, you stand a better chance of getting an inexpensive fast loan now than at any time for quite a while. Compare the market for auto loans here.

 

About Author:

Peter Andrew has been writing about -- and for -- business for more than two decades. For the last couple of years, he has found himself increasingly specializing in the U.S. financial sector.