USA15 Oct 2013
US car sales are rising as the country pulls out of recession and consumers demonstrate an appetite for new purchases. A significant proportion of these would-be buyers have credit ratings that place them firmly in the sub-prime category – the group whose default rates pushed many lenders and dealerships to the wall when the financial crisis hit.
Yet current research shows financial institutions are once again loosening underwriting terms and dealers are actively targeting this group. The market is gathering speed, fuelled by increased liquidity and intense competition for market share.
There is no doubt that the US automotive market is coming out of the severe slump the sector experienced in the immediate aftermath of the financial crisis in 2007-08, with industry indices showing a steady rise in the number of cars being sold.
Based on sales in August 2013, the seasonally adjusted annualized rate (SAAR) for US car sales topped 16m for the first time that month since November 2007, according to market intelligence specialists LMC Automotive.
Nor is that an isolated prediction for a single month. Looking at longer term trends, amongst other US commentators Kelley Blue Book forecasts sales will remain on track to exceed 15.6m units in 2013, as do Edmunds.com, and TrueCar.com. The comparable figure a year ago was 14.1m, while annual sales declined to 10.4m in 2009.