Affordable Credit Fuels May Sales Pace, Edmunds.com Reports
Edmunds.com predicted today that May sales will reach 1.55 million units. The SAAR is expected to reach 16.2 million.
SANTA MONICA, Calif. —Edmunds.com reported today that it expects 1.55 million new cars and trucks will be sold in the United State in May. Officials also estimated that the seasonally adjusted annual rate (SAAR) will be 16.2 million.
The vehicle information site’s projection would represent an 11.5 percent increase in sales from April 2014 and a 7.3 percent increase from May 2013, official said.
“Credit conditions are making it easier to buy or lease a new car,” says Edmunds.com Senior Analyst Jessica Caldwell. “Shoppers are opting for longer terms at lower interest rates. In other words, they’re able to afford more expensive cars by keeping their monthly payments at or near what they’re used to paying.”
Edmunds.com’s finance data showed that the average new loan term during the first four months of 2014 reached an all-time high of 66 months. The average interest rate for new loans (4.4%) in 2014 was only slightly higher than the all-time historic lows that have been well publicized within the last two years. Edmunds.com also pointed to loans secured with lower credit scores and all-time high lease penetration (27.9% YTD, through April) as sure signs that credit continues to loosen.
Edmunds.com estimated that retail SAAR will come in at 13.2 million vehicles in May, with fleet transactions accounting for 18.3 percent of total sales. An estimated 3.05 million used cars will be sold in May, the firm added, for a SAAR of 36.4 million (compared to 3.10 million — or a SAAR of 35.9 million — used car sales in April).
More Auto Finance
Dealerships Are Paying the Price for Extended Car Loans
Growing negative-equity scenarios mean such lengthy terms should be addressed in a forward-looking way to make them work for the dealer and the consumer down the road.
Read More →
Trade-Ins in Negative Equity Reach New Heights
As such trade-ins rise in frequency, so do monthly loan payment amounts and interest rates, according to second-quarter data compiled by Edmunds.
Read More →
Auto Credit Plentiful
June numbers show lenders are readily granting access, including to risky borrowers, as consumers leverage themselves to take on high prices.
Read More →
Automotive Consumers Sink Further in Debt
Most financing metrics hit records in the second quarter as more buyers locked themselves into long terms and high monthly payments.
Read More →
Porsche Financial Services Shifts Structure
After 36 years with Porsche, the Financial Services Chief Financial Officer Konrad Riedl is retiring, and the department is realigning its management structure.
Read More →
Tariffs Could Raise Insurance Premiums
As U.S. import tariffs affect repair costs, consumers might find it more affordable to replace a damaged vehicle, according to recent Insurify tariff analysis.
Read More →
Smaller Loans, Longer Terms
The youngest generation of car buyers is more likely to finance less expensive vehicles, more than half of generation Z consumers borrowing less than $25,000.
Read More →
New Cars a Tad More Affordable
May averages show that combined circumstances gave auto consumers slightly better buying power for the month, though average prices were up year-over-year.
Read More →
First-Quarter Sees Long Auto Loan Growth
Experian data show more consumers are tapping the method, along with refinancings, to afford buying. Meanwhile, subprime borrowers are getting more access.
Read More →
Mastering Credit Friction
In this video, Josh Krach explains how to turn credit friction into an advantage.
Read More →