Car Sales Peak As Economy Improves
In more positive news relating to the improving economy, car sales of new vehicles have increased tremendously, adding to the increasing home sales and other consumer spending. The New York Times reported this month that auto sales have reached their highest level this March since 2007, with the expectation that this trend will continue in 2013.
The article cited information from Autodata, a car research firm, which found that 1.45 million cars were sold this past month – a 3.4 percent increase since March of last year. More than 15 million cars are expected to be sold in 2013 as well.
Though the economy has been improving for the past few years, this is one of the first times the auto industry is seeing the effects, proving that more consumers have long-term confidence regarding their finances and the overall market.
“Even though consumer confidence has been up and down this year, there are ‘wealth effects’ that are making Americans feel comfortable finally buying new cars they’ve been waiting for,” Lacey Plache, an economist for an auto research site, told the Times.
For car salesmen, this is obviously good news, since this trend is expected for the entire year. But other parties are benefiting as well, including auto loan originators. Reports have shown that the decreasing delinquency rates of car loans makes this industry a profitable one, and, combined with the increase in car sales, more financial lenders may be turning to auto loans.
To prepare for this trend, lenders in the auto loan business can benefit from application processing software. With tools to help process the increasing applications, lenders can be sure that they will be able to handle the growth, as well as keep the historically low default rate at its current minimum.