Low Interest Rates Help Auto Sales Rise

Bloomberg News - February 28, 2013

New car buy­ers, shunned by lenders just four years ago, now are ben­e­fit­ing from his­tor­i­cal­ly low inter­est rates and more-avail­able cred­it and auto deal­ers are ben­e­fit­ing as well.

Find out what ben­e­fits low financ­ing rates have pro­duced.

Gen­er­al Motors and Auto Nation, respec­tive­ly the top-sell­ing automak­er and deal­er­ship group in the U.S., are among com­pa­nies point­ing to ample financ­ing for new car and truck pur­chas­es push­ing sales com­fort­ably past 15 mil­lion this year, the high­est since 2007.

“We have the best financ­ing avail­able for our cus­tomers ever,” Mike Jack­son, the chief exec­u­tive offi­cer of Fort Laud­erdale, Flori­da-based Auto­Na­tion, told a J.D. Pow­er & Asso­ciates con­fer­ence this month in Orlan­do, Flori­da. “I go back to ’08 and ’09, and I couldn’t get the Lord Above financed.”

“No indus­try has ben­e­fit­ed more from the unfreez­ing of the cred­it mar­kets than new and used vehi­cles,” Tom Webb, chief econ­o­mist of Man­heim Con­sult­ing, said this month in a report. “Although the imme­di­ate goal of Fed­er­al Reserve actions was to low­er long-term rates and sup­port the mort­gage mar­ket, it was auto-financ­ing mar­kets that enjoyed the first boosts.”

“Cred­it avail­abil­i­ty is a big part of sup­port­ing the growth of the auto indus­try” Joe Hin­richs, Ford’s pres­i­dent of the Amer­i­c­as, told reporters on Feb. 21 at the company’s engine plant near Cleve­land. “Deal­ers are feel­ing more opti­mistic about leas­ing and cred­it avail­abil­i­ty for con­sumers””

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