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Archive for the ‘Financing’ Category

Used Vehicle Prices Rising, Pushing Buyers to Look at Leasing

Rising interest rates hastening trend.

by on Nov.09, 2018

Used car shoppers are finding higher prices than ever for vehicles.

New vehicle prices have reached all-time highs this year and now used vehicles, the haven for car buyers looking for a deal, have now joined new cars, setting a new pricing benchmark.

The average price of a used vehicle is now $20,084, the highest since 2005 and a 3.5% increase year over year, Edmunds notes, adding that increase is rising as it jumped to 5% in Q3. American preferences for expensive new trucks and utility vehicles pushed new vehicle prices over the $36,000 mark, according to Cox Automotive.

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In short, buyers are paying more for a vehicle and with interest rates rising, the options for cutting down that monthly payment are getting tougher. (more…)

Millennials Spending Big on Cars — With Auto Loans to Match

Everything's bigger in Texas, including auto loans.

by on Nov.07, 2018

Texas millennials have higher auto debt than anywhere else in the country, largely because they purchase trucks.

The adage says everything is bigger in Texas. Well, when it comes to car loans, it’s true.

A new survey by Lending Tree reveals that millennials in the Lone Star State are spending big on new vehicles – trucks – and have the large car loans to prove it. Texas is the nation’s largest consumer of new trucks, which are typically not cheap.

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More than 25% of all registered vehicles in Texas in December 2017 were privately owned, non-fleet trucks. Ford F-Series trucks sold at a national average transaction price of $46,600 per truck in September. Texans prefer trucks to the point that six manufacturers — GMC, Ram, Ford, Nissan, Chevy and Toyota — have Texas-edition trucks in their line-up. (more…)

New Vehicle Prices Continue to Rise in Fourth Quarter

More content, higher interest rates driving increase.

by on Nov.01, 2018

Ford's new SUV sales are on the rise, as is its average transaction price by $1,400 per vehicle.

Despite predictions of an overall decline, U.S. auto sales rose slightly in October, led by companies with shiny new sport-utilities and crossovers to offer buyers.

However, those more desirable vehicles combined with rising interest rates are resulting in new vehicle prices that are on the rise. This is likely, at least according to one automaker, put a dent in sales for the remainder of the year.

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During its sales call, executives at Ford Motor Co. warned sales numbers will continue to fall in 2018, in part because of the rising interest rates pushing up prices. (more…)

GM Offers First-Ever Extended Bumper-to-Bumper Warranty

Company claims it could raise resale values.

by on Oct.15, 2018

GM's new extended warranty is accepted at all GM dealers across the U.S.

The difference between buying one new vehicle or another can often come down to the tiniest of things, but General Motors is now offering a big thing that it hopes will make a big difference: an extended bumper-to-bumper warranty.

The company is offering what it is calling the first ever true extended bumper-to-bumper warranty that covers Chevrolet and GMC products for five years or 60,000 miles, whichever comes first, while Cadillac and Buick owners can get a six-year or 75,000-mile warranty.

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“One of the best things about buying a new vehicle is the peace of mind that comes with the warranty,” said Ken Mac, director of Chevrolet, Buick, GMC, Cadillac Protection.  (more…)

Strong Demand, Interest Rates Causing Jump in Used Car Prices

Compact, midsize sedans driving the shift.

by on Oct.08, 2018

Used vehicle prices are on the rise and that's unlikely to change in the near term, especially for compact and midsize sedans.

Car buyers looking for a deal by getting a used car are going to be sorely disappointed — used vehicle prices are on the rise.

According to the latest data from Manheim, used vehicle values set a new record for the third month in a row, which is unusual. The abnormal summer bounce began in mid-June and drove prices higher for 11 straight weeks.

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That changed some with the arrival of September, which saw several weeks of normalizing depreciation. However, it wasn’t enough to offset the overall jump in prices as 3-year-old vehicles are now worth 4.5% more than they would normally be worth had typical depreciation occurred through July and August, according to Manheim. (more…)

Fade of Zero-Percent Financing Makes Leasing More Appealing

Rising interest rates pushing buyers toward leases.

by on Sep.14, 2018

Zero-percent financing deals are increasingly difficult to find these days, pushing some into leasing.

Car shoppers are always looking for a deal, and often they’re excited by the prospect of zero percent financing; however, those deals are getting tougher and tougher to find.

The percentage of sales with zero percent finance deals has been cut in half in the last two years — dropping from 14.6% of transactions in August of 2016, to 10.4% last August to just 7.4% this August, according to Edmunds.

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This drop during the last three Augusts sparks interest because zero percent financing deals usually abound in August and September.

“August truly represents the month that we would have expected to see a turnaround in this trend if one was imminent,” said Jeremy Acevedo, Edmunds’ manager of industry analysis. “Moving forward, shoppers will likely need to do a bit more digging to find other ways to save on a new vehicle because it looks like zero percent finance deals are going the way of the dodo.”

(more…)

Car Buyers Paying More, On Time as Lenders Raise Risk Threshold

Average credit score for new vehicles is 715.

by on Aug.30, 2018

Experian reports that new cars are more expensive than ever with an average monthly car payment of $525.

Americans are shelling out more than ever to buy new and used cars, on average, however, their also doing a better job of making those monthly loan payments on time, according to Experian.

Experian’s “State of Automotive Finance” report reveals that 30-day delinquencies dropped to 2.11% from 2.2% a year ago, while 60-day delinquencies dropped to 0.64% from 0.67% over the same time period.

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“As we monitor the health of the automotive market, delinquencies are one of the most telling metrics. If this downward trend continues, it can be an encouraging sign,” said Melinda Zabritski, Experian’s senior director of automotive financial solutions. (more…)

New Vehicles Sales Fell in Q2, as Leasing Rates Rose

Mercedes-Benz boasts highest average lease price.

by on Aug.17, 2018

Leasing rates rose in the second quarter of 2018 with SUVs accounting for the largest portion of those leases.

Though auto sales were down overall in the second quarter of 2018, folks leasing instead of buying new vehicles were doing their level best to keep sales numbers high despite lower incentives, according to a new study.

Swapalease.com notes the average months remaining in leases rose during the second quarter to 28.8 months compared with 25.1 months in the first quarter. The rise is an indication that people were looking to get out of their leases early in search of a better vehicle or deal.

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Not only was that measure up, the average miles remaining fell from 23,115 to 22,617 left in their contract, which is only a slight decrease. The ratio of months remaining to miles remaining, according to the website, is an indicator that people are driving more. Those looking to get out leases early could have been creeping up on their contract limit, forcing them to make a move earlier. (more…)

Buyers Sit Out July Due to Higher Interest Rates, Fewer Incentives

Transaction prices were up $925 in July.

by on Aug.01, 2018

AutoNation CEO Mike Jackson called July a "clunker" when it came to the sales results, adding that every sales year has one.

Analysts and industry executives have been pointing to the second half of this year, expecting sales to decline so July’s results weren’t a complete surprise.

However, with a second quarter GDP at 4.1% and promises by President Donald Trump that the good times are going to continue to roll, at least economically, what caused the slump in car sales to occur as the negative nellies said it would”

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It’s multiple factors, starting with vehicle loan interest rates. The annual percentage rate (APR) on new financed vehicles averaged 5.74% in July 2018 compared to 4.77% in July 2017, according to Edmunds.com. (more…)

US Auto Sales Predicted to be Flat in July

Possible price hikes pulling sales forward.

by on Jul.27, 2018

July new vehicle sales are expected to be basically flat compared to year-ago results.

As they have through the first half of the year, new vehicle sales are expected to remain level during July as the auto industry edges into the second half of the year with carmakers predicting a drop in profits during the last six months of 2018.

Cox Automotive said this week it expects U.S. new-vehicle sales in July to reach 1.41 million units, mostly unchanged when compared with year-ago levels thanks to what it described as pull-ahead buying by consumers concerned about future price hikes.

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However, with one less selling day this year, the seasonally adjusted annual rate (SAAR) for July would be 17.1 million, an increase from the 16.7 million sales rate posted in July 2017. (more…)