Owners hanging on to cars longer
Here’s an interesting factoid from the Great American Auto Depression: the average mileage on vehicle trade-ins has jumped 15% in the last 18 months.
According to online auto site Edmunds.com, vehicles traded in to dealers currently average 65,883 miles on the odometer. That’s up from 57,079 in January 2008.
“There is a strong correlation with the weakened economy,” said Edmunds.com senior analyst David Tompkins. “The average trade-in mileage has increased at a pace similar to national unemployment rates.”
There could — emphasis on could — be some good news ahead for the auto market, which has shown some tentative — emphasis on tentative — signs of stabilizing in recent months. Edmunds, which tracks car-shopping behavior on its site, estimates that 100,000 consumers are ready to buy a car, but haven’t closed the deal yet. That indicates there’s some pent-up demand out there that isn’t showing up in the monthly sales statistics.
The reasons for the reluctance include worries about the economy, the continuing lack of easy credit, and confusion surrounding the federal “cash for clunkers” program, which launched July 1. (Some dealers have been reluctant to sell cars under the clunkers initiative for fear of violating the program's still-to-be issued regulations, which are due out Friday. In addition, Edmunds calculates that a lot of shoppers who think they might qualify for the clunkers program won’t.)
”Given that these 100,000 shoppers represent about 10% of monthly sales,” Tompkins said, “automakers and dealers should find a way to capitalize on the opportunity and entice these folks to actually buy.”
-- Martin Zimmerman
Photo: Chevys for sale recently at North Caroline dealership.
Photo credit: Bloomberg News