BANDON, Ore. — More Americans are looking to buy vehicles, and they are planning to spend more on them, according to CNW Research.
Of U.S. prospective car buyers, 14.8 percent said they planned on making a used-car acquisition. That’s up 8.6 percent with a 3 percent increase in anticipated budget. On the new-car side, 14.5 percent are looking to acquire a vehicle this year, up from last year’s 13.3 percent and up 12.7 percent from 2010. The buyers in this group say they will have a budget for the vehicle that is about 2.9 percent more than the amount reported in 2012.
CNW’s Art Spinella said the recession is coming to a close for many industries, and “as seen with new and used cars, there has been a resurgence based on pent-up demand being sated.”
Also, the higher anticipated budgets for buying cars indicates a willingness to dip into savings and to borrow a bit more in order to acquire that desired product, Spinella stated in the company’s monthly newsletter.
The news wasn’t all good, however. In a 1985 Wish List study, a new vehicle was third on the list of products or services consumers wanted to buy that cost more than $2,000, and a used vehicle was listed as 14th. Now, new and used cars are virtually tied at 8th and 9th.
“Beware that much of consumer spending plans this year are because of delayed purchases rather than new intentions,” Spinella noted. “Americans sorely want to come out of their constrained spending mode brought on by the recession. But first they want to ‘catch up’ on their previous wish lists before committing to anything new.”
Spinella anticipates that April’s gain in used-car sales will be slight, up about 1.5 percent, with most of the increase coming from private party sales. Used-car sales for franchised dealers are set to increase a shade over 1 percent to 1.38 million units, while independent dealers will basically remain static compared to last year at 1.23 million.
The trend toward lower FICO scores among used-car buyers continues, falling to 561.3 in the opening days of April. The share of sub-670 credit-score buyers increased to 46.9 percent from March’s 46.37 percent and from 35.22 percent from a year ago.
A new addition to the Used-Car FICO data is monthly tracking of retired military credit scores. While CNW has had the data since 1995, it has never been part of a regular release.
In April, Retired Military FICO was 609.8 for used cars and trucks. Except for eight months in 2008, retired military has remained in the 600s since 1995.
“Expect the trend toward private party sales to continue for the next four months,” Spinella wrote. “Overall, however, all channels are going to finish the year ahead of 2012.”