Feb 05, 2013 Philip Burgess
The U.S. automotive industry has been enjoying a steady recovery throughout the past several months, as improvements in various segments of the economy have led to stronger consumer spending. Additionally, these increases in sales of both used and new cars has led to an uptick in automotive industry financing, which is good news for buyers.
Personal and commercial lending was among the hardest hit areas of the economy following the Great Recession, and this led to several other issues as a result. With the availability of loans becoming stronger, the U.S. automotive industry is getting a much-needed injection of equity and assisting in the overall economic recovery as a result.
Disaster leads to opportunity
The Credit Union Times recently reported that Hurricane Sandy might have caused an increase in automotive lending, as thousands of cars and trucks were damaged during the storm. After an immediate increase in used car sales, many experts expect a continued surge in automotive sales throughout the next several months.
According to the news provider, used and new car sales are predicted to increase 7 percent this year compared to 2012, translating to 15.3 million new vehicle registrations. New car loans increased substantially at the end of last year, with $4.6 billion higher disbursement volumes in November compared to the same period of 2011, or a nearly 8 percent improvement.
The source explained that the average age of cars in the United States is 10.8 years, illustrating the predictions for higher sales volumes in 2013.
"There should also be a continued loosening of credit and more release of pent up demand now that the election year is in the books," Richard Epley, CEO of Auto Financial Group, told the news provider. "We think that consumer confidence should be pretty strong now that the federal government has at least settled on our tax laws for now."
The Credit Union Times added that lending terms will likely continue to be loose, at least through the first few months of 2013.
Alternative financing growth
After the financial crisis, alternative financial services became more common for a variety of purposes, including automotive lending to consumers. As the economy continues to fight back from the doldrums of the recession, many experts believe that this trend will intensify, especially as the population continues to approach traditional financial services with caution.
Car buyers should consider using alternative automotive finance for their lending needs.