ALAMO, Calif. and LOS ANGELES – With the credit crisis at full tilt and new car leasing programs on the endangered species list, consumers are uncertain how they will finance their next auto purchase – and a substantial number may opt out of the new car market, buy a less expensive new car or a used vehicle, or postpone their purchase entirely, according to a Global Debt Network Automotive (GDNAuto).
These are among the findings of a new nationwide survey of 1,000 consumers conducted by market researcher Synovate of Chicago for Global Debt Network Automotive, a nationwide online loan portfolio marketplace where automobile dealers, banks, credit unions, hedge funds and other financial institutions can come together to securely evaluate, price, sell and purchase asset-backed debt.
In response to the question, "The auto leasing business has experienced a shake-out of late: What do you plan to do if leasing becomes less available to you?" Thirty-seven percent of respondents said the recent sharp decline in new-car leasing programs may cause them to select a used car instead (19 percent), postpone their auto purchase for the time being (11 percent), or purchase a less expensive new car (7 percent).
Twenty-one percent of those surveyed said they would consider purchasing rather than leasing their car of choice, while only 2 percent reported they would pursue obtaining a new car lease from an alternative source, such as a finance company, bank or credit union. Almost 40 percent said they were uncertain how the shake-out in auto leasing might affect their auto purchase plans.
"The survey confirms what we've been hearing in the marketplace: that American consumers are uncertain how they will finance their next automobile and this uncertainty is causing them to consider a variety of options, including buying a less expensive new car, a used car, or postponing a purchase until conditions are more favorable," said Michael Sheridan, founder and president of GDNAuto. "Although these results are bad news for car manufacturers and lenders who have discontinued popular leasing programs, and for the new car dealers who have relied on these programs to boost sales, there is a tremendous opportunity for used car dealers and lenders to grow their business by introducing financing options that will have broad appeal to low- and moderate-income consumers being driven in growing numbers to used car lots."