US Auto Sales: Key Factors
For an automobile consumer, the key factors that affect the decision to purchase a new vehicle is:
1. How easy he/she can get access to the funding (auto loan)
2. How old is his/her current car
3. How good is the new car model
The below chart is sourced from WSJ.
For factor #1, it looks like financial institutions have lowered the bar for approving car loans. According to the credit-monitoring firm Experian, now 20.4% of all auto loans are sub-prime loans, which is granted to borrowers in the lowest credit score range. Banks are even providing longer term loans. Get this, the average long term loan now reaches 5.5 years...Read More