BANDON, Ore. — The auto industry continued to exhibit underlying strength on the backs of subprime and Hispanic new-car buyers in September, CNW Research reported last week.
Compared to September 2013, subprime approvals are up 17.7%. On a month-over-month basis, subprime approvals increased only a third of a percentage point, according to the firm.
“While that [month-over-month] figure doesn’t seem like much, it reveals a strong but measured approach to providing loans to these folks,” wrote Art Spinella in his firm’s monthly newsletter.
September sales also got a boost from Hispanic car buyers, which, according to CNW, could outpace African-American new-car buyers for the first time since CNW began tracking vehicle purchases by race and ethnicity. In September, CNW’s true delivery rate for Hispanic new-car buyers was 1.53 million units, while the TDR for African-America buyers was slightly less at 1.51 million.
“This marks the first time the Hispanic new-car market has surpassed African-Americans since CNW began measuring these buyers some 15 years ago,” Spinella noted.
The market research firm also noted a 6.6% drop from a year ago in its Jitters Index, which measures consumer optimism. “Americans continue to feel a bit more comfortable with their home-centric issues,” Spinella wrote. “Note that the overall jitters score remains far worse than [before the 2009 recession].”
At the dealership level, automotive retailers not only experienced an increase in floor traffic (up 10.5% from a year ago) in September, they were able to close more deals (up 3.4% from a year ago). “And an increasing number of shoppers are looking for diesel alternatives, although lower gasoline prices have clipped a bit off of consideration,” Spinella noted.
According to CNW, better than 29% of new-car shoppers are considering diesel, while the percentage is smaller on the used side at 22%. But according to Spinella, used-vehicle shoppers are more determined to find diesel than new-car shoppers.
“Hybrids, on the other hand, are not as strongly desired on the used side, with only 18% saying they would consider a hybrid as a key reason for buying a particular make or model,” Spinella noted. “Interestingly, the used-vehicle hybrid consideration carries no premium over a non-hybrid model, while diesels have a $715 advantage over non-diesel models of the same category and condition.”