Needless to say, Stevie Ray Vaughan understood what it was all about. He said in the song “Crossfire” that “Money’s tight; nothing’s free”. That remains true today for the American car-buying public, as falling credit scores and ongoing recession have combined for lean times. Wards Auto teaches us just how much lending is changing in America. This is taught when considering the rate of subprime loans has stayed the exact same while second-hand automobiles being bought have gone up above new cars.
Non-prime and subprime loans an optimistic sign for credit liquidity
Credit is going to flow, even if it is by subprime. This helps the automotive market that needs to sell cars to recover. There is not an in-house financing option target coming from dealers. That doesn’t mean that U.S. Citizens aren’t naturally leaning towards that kind of lending. Product availability is a problem. It isn’t where it needs to be. Ed Rykulski, used auto manager for Al Serra Auto Plaza of Grand Blanc, Mich., told Wards that “We employ 18 salespersons within the sales center and buy intensely at the auctions to keep sales at 2009 levels, when we sold 3,212 used units.”
More subprime female buyers means more saleswomen
Near Toledo, Ohio, there is Taylor Used Vehicle Center where saleswoman Nancy Koehrman works. She explained that many more women are being hired to work now.
“Women customers prefer women to be handling the vehicle selling and also the finance and insurance side, too, especially if they’ve been classified as subprime,” Koehrman told Wards.
It isn’t just women interested in subprime used auto lending options. 43 million people, or one quarter of American adult customers, have, accounts Fair, Isacc and Co. Inc., a FICO score lower than 599. Lots of the market could be hit here. The the subprime pool is getting more and more people as vehicle lending options are being declined to those with FICOs from 650-699.
Off-lease stock playing a big role in bolstering inventory
Off-lease cars are where lots of stock comes for the Serra group. Wards interviewed Rykulski who said this. The company’s Grand Blanc used vehicle center is one of the largest of any Ward’s 500 member (dealerships that receive the highest marks from the publication for reliability and a host of other factors). It is hard to make sure you have the inventory you need, besides non-subprime customers, with all the used cars being so common.
Car Deal Expert can help you with used car loans
Further reading
Wards Auto
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