Credit is, finally, slowly loosening for buyers with sub-prime credit rating scores of less than 670.
Both the number of people shopping for a new vehicle and the number who actually buy one are up during early February based on early reports from car dealers. This could mean monthly vehicle sales in the 920,000 – 950,000 range, according the CNW Research, an industry consultancy.
Even the lower projected number – plus 17% compared to an admittedly weak February 2010 – is a welcome warming in the slowly recovering but still icy U.S. market.
However, CNW is sticking with a 12.5-12.6 million vehicle sales year, at the lower end of industry estimates, and far off the 16 to 17 million unit rates that prevailed for most years of the last decade before the housing bubble collapsed, taking the financial markets with it.
Credit is, finally, slowly loosening for buyers with sub-prime credit rating scores of less than 670. Both auto company finance arms and major banks are helping the thaw.
CNW says that there is a 60% improvement in Sub-Prime approvals in the opening days of February compared to a year ago. Here caution is urged. The increase is based on small numbers from a year ago and the total remains well below historical sub prime financing rates.
Economy cars, entry-level SUVs and entry-level CUVs all had minor gains versus a year ago. But more significantly, was a continuation of the year-over-year improvement for full-size pickup trucks — up a full percentage point compared to January 2010. This bodes well for the truck dependent Detroit Three.
CNW’s various surveys indicate that most of these increases can be attributed to the contractor and farmer segments of the pickup market.
