Forget the chocolate: Women deal with life changes by buying a car, survey says

Women shop big when they are stressed out about changes in their lives -- think car-sized big.

A recent survey by CarMax Inc. indicates that major life events like changes in employment and family are the most likely reasons a woman purchases a vehicle, says an article from Business Wire.

“Many personal factors affect women shopping for a car,” said Donna Wassel, Southwest region vice president of CarMax, the nation’s largest used-car retailer. “Changes in family and employment create an opportunity to evaluate your current driving situation.”

The August 2009 survey of 500 U.S. women ages 18 and older asked, “Of the following life events, which is the most likely to prompt you to purchase a car?” with the following options to choose from: new job, retirement, pregnancy, divorce, an empty nest and children becoming drivers.

Sixty percent of the women surveyed indicated that career changes, including a new job (37%) and retirement (23%) would most likely to prompt them to buy a car.

However, women ages 18 to 34 had a close tie between pregnancy (41%) and getting a new job (44%) as motivations for car buying. Eleven percent of all women cited a new child driver as an impetus.

This doesn’t necessarily mean that the next time change rolls into your life you should jump on the bandwagon by buying a new car (though it might help boost the economy). We’re with you in thinking that the chocolate bar might be a little bit better for your wallet.

-- Kelsey Ramos

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Photo: Diana Fana looks at a Hyundai vehicle at a car lot. Credit: Bloomberg

Thinking American, buying Asian

You’d never know it from the August sales numbers, but Americans say they actually are more interested in buying cars from Detroit than from a foreign manufacturer.

A survey released today by Consumer Reports finds that " 'Buy American’ resonates strongly with new car shoppers.”

According to the national survey, 81% of respondents looking to buy a new car are likely to consider a domestic brand. That was significantly higher than the 47% of new car shoppers who were considering an Asian brand or the 46% considering European models.

The survey was released the day after August auto sales reports showed Asian carmakers had captured their largest share ever of the U.S. market — 52.3%. The share of the traditional Detroit Three — GM, Ford and Chrysler — fell to a dismal 41%.

Much of that was due to Asian automakers’ dominance of the "cash for clunkers" program, which favored companies that produce fuel-efficient vehicles. But it still makes you wonder if Americans are prepared to put their money where their collective mouth is.

Among the U.S. nameplates, Ford gained the most ground in new-car buyer consideration, followed by GM. Chrysler actually fell sharply. Both GM and Chrysler went through bankruptcy this year and also accepted federal bailout funds.

“The Detroit Three have been in the spotlight all year,” said Rik Paul, Consumer Reports’ automotive editor. “Ford was the only one of the Detroit Three that did not seek federal assistance, and this has likely helped bolster its reputation among car buyers.”

Ominously for auto executives, whether they be in Detroit, Toyota City or Wolfsburg, was the survey’s finding that only 9% of those interviewed are likely to buy a car in the next year. That’s less than half of the percentage (19%) of new-car buyers in the magazine’s June 2008 survey, suggesting that a market rebound is still a ways off.

The survey was conducted July 30-Aug. 3, and involved telephone interviews with a nationwide sample of 1,777 adults whose household owns at least one vehicle.

-- Martin Zimmerman

Photo credit: Consumer Reports

Subaru sales jump while many others fall

 

Hot on the heels of the release of all-new 2010 versions of the Subaru Legacy and the iconic Subaru Outback, Subaru has just released its sales numbers for July.

Buoyed by new product and, get this, the interesting and novel idea of making inexpensive cars that are fun to drive and get splendid gas mileage, Subaru boasted some seriously good sales numbers.

How good? Subaru announced that the company had its best sales month ever with a 34% increase in sales in July. Subaru sold 21,839 units in July 2009, way up from the 16,271 units sold in July 2008. Subaru posted a -- wait for it -- 4% gain year-over-year, and Subaru sales for this past July showed a 17% increase over June 2009 Subaru sales.

How, you may ask, is a niche brand like Subaru, which is well-loved by a disparate group of fans ranging from fleece-covered Pacific Northwesterners to craggy New Englanders to Rocky Mountain states dwellers, not to mention the tuner and rally-racing crowd, selling cars hand over fist when other car companies are floundering?

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.

The reason? The economy, of course — the same reason the automakers are on pace this year to notch their lowest annual U.S. sales in decades.

“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

Pre-owned auto sales on the rise despite gloomy market trends

Sales of pre-owned automobiles experienced a jump in April, despite all the bad news about dismal new-car sales, embattled GM and Chrysler dealerships and federal bailouts. The trend can be expected to continue throughout the near term.

This comes as good news for dealerships with large pre-owned stock, as the used-car market stimulus has allowed them to remain profitable despite a dramatic decline in new-car sales throughout the first quarter of 2009.

Thanks to a drop-off in automobile demand toward the end of 2008, early 2009 presented plenty of used-car bargains for consumers. In the last few months, buyers have begun taking advantage of the deals and, as a result, used-car inventories are beginning to dry out.

This could be a potential lifesaver for dealers drowning in 2009 stock, because as the used-car market tightens, prices inevitably will rise to a point where consumers are once again willing to splurge for a new car. Congress' proposed "Cash for Clunkers" deal also should help to slow used-car demand and push buyers toward new cars.

Fancy a slightly-worn Aston Martin DB9 for under $80k? There are a few lingering around in SoCal showrooms, no joke. Could make for an interesting Memorial Day splurge. So long as you can secure financing, of course.

-- Brian Alexander

Brian Alexander is a staff writer for Driverside.com

Photo: In March 2008, this Aston Martin DB9 Volante gleamed in the showroom of Aston Martin of Beverly Hills. Credit: Genaro Molina / Los Angeles Times

Price of a new car hits 30-year low -- but not in California

Californians may not agree, but a new car is more affordable to the average family now than at any time in the last 30 years, according to a new report.

Buyers can expect to see an average of $2,931 in incentives off the price of a new vehicle. In some cases, such as buying a Chrysler, a consumer can expect to get as much as $6,000 off the price of a new vehicle as dealers seek to move inventory amid a recession -- and in Chrysler's case, a bankruptcy --  and a sudden downshift in sales nationwide.

The average price of a new vehicle nationwide is $1,700 less than in the final quarter of  2008, according to Comerica Bank's Auto Affordability Index, which has tracked auto prices since 1979.

California buyers likely will see a smaller drop in average price. A temporary 1% rise in the state's sales tax that began April 1 and a doubling of license fees to arrive May 19 add about $400 to the average price of a new car. A provision of the nationwide economic stimulus package, however, allows them to write off a portion of the sales tax and license fee on any new vehicle bought between Feb. 17 and Dec. 31 this year.

Nationally, the survey found it took 21.5 weeks of work for a median family to buy an average-priced new car or truck, or 1.3 weeks less than in the fourth quarter of 2008. It also found that consumers are getting better interest rates from dealers as credit slowly returns to the market. Financing, though, may not be available to as many potential buyers as before.

Bankruptcy and 'Obama bounce' bolsters Chrysler's 'purchase intent?'

According to the automotive information web site Edmunds.com, Chrysler's bankruptcy -- coupled, perhaps, with positive statements from the president -- has actually bolstered consumers' interest in buying a Chrysler product.

Since last Thursday's Chapter 11 filing, "the visitors on the Edmunds.com website who are shopping for Chrysler models shot up 15%," the company announced. "By comparison, GM's shopping consideration dropped 6% since Thursday and Ford's was up 7%."

Said Edmunds CEO Jeremy Anwyl: "I'd call this 'the Obama bounce,'" referring to the president's recent speech in which he discussed Chrysler's situation and urged consumers to consider buying an American car.

"Maybe the Chrysler bankruptcy announcement attracted the bargain shoppers who may think a bankruptcy is the same as liquidation with price-busting clearance sales," said Edmunds' AutoObserver.com editor Michelle Krebs.

The website said dealers are reporting that customers are coming into the showroom making outrageously low offers for Chrysler vehicles, expecting dealers to take any price just to sell a car. While Chrysler vehicles are selling for a greater below-sticker discount than the industry average, the difference is not dramatic.

Will this increased "purchase intent," as Edmunds calls it, translate into increased sales? Too early to tell. "Perhaps Chrysler loyalists, though dwindling in ranks, are coming to the aid of their brand -- or seeing this as the last hurrah to buy their favorite brand," said Krebs.

-- Steven C. Smith

Photo: Chrysler dealership. Credit: Chris McGrath/Getty Images

AutoNation CEO: GM Will Survive. Chrysler? Who knows.

If Chrysler were to liquidate, its vehicles would sell for 30 to 40 cents on the dollar.

That's the best estimate of AutoNation Chief Executive Mike Jackson, who addressed concerns about the status of Chrysler and General Motors Corp. in announcing his dealership chain's first quarter earnings report this morning.

"On Chrysler, I think it's likely a deal gets done, but it's possible that, due to the complexity of the negotiations, it can't get done and you have to wind down that concern," said Jackson, who added that he believes GM is all but certain to survive the bailout process.

 "For GM, I'm not concerned," he said.

Jackson's own company saw earnings for the quarter decline 32%, as new and used sales decreased, service revenue was down and credit remained tight. Still, that result -- a $34.6-million profit for the quarter, or 20 cents per share -- beat analyst expectations of 16 cents per share earnings. 

AutoNation revenue dropped 36% to $2.47 billion.

Because AutoNation was able to eliminate $500 million in debt in the quarter while at the same time reducing inventories by 20,000 vehicles, Jackson portrayed the results in a positive light.

Countdown to new Prius -- 60 days and counting

 
Toyota announced today during a monthly sales call that its new 2010 Prius will be available in dealerships at the end of May.

The car, recently reviewed by L.A. Times auto critic Dan Neil, features much-lauded improvements and refinements in nearly every area. An increased wheelbase, improved aerodynamics, more legroom, a larger engine and the much talked about feature of three driving modes -- EV, Power and Eco.

Toyota said pricing would not be released until mid-April and also did not comment on whether pricing would be reduced to compete with the upcoming Honda Insight hybrid, which has been announced at less than $20,000.

-- Joni Gray

Photo: Toyota

Don't want a new car? Check out this low-mileage baby

One of the reasons new-car sales are in such a deep hole is that dealers are steering customers toward used vehicles, according to a new study by automotive data tracker Edmunds.com.

About 511,000 used cars sold during the last three months would likely have been rung up as new-car sales during “normal” economic times, Santa Monica-based Edmunds.com reported.

Two-thirds of those consumers usually buy a new vehicle, but opted instead for a used vehicle because of the tough economic times.

The remaining third went into the buying process intending to buy a new car but at some point switched to a used car, which typically can generate twice as much profit for the dealer as selling a new car.

"Right now, dealers need to maximize their short-term profitability more than ever," Edmunds.com Chief Executive Jeremy Anwyl said.

"So it is really no big surprise to learn that salespeople are directing some car buyers toward used cars, which have historically delivered a much higher profit margin to the dealer."

AutoNation, which owns dealerships in more than a dozen states, said used-car sales have been a rare bright spot lately.

"We're positioning people to get them in the vehicle that fits their needs in this economy," AutoNation spokesman Marc Cannon said. "And if new doesn't fit their needs, we'll put them in used.

"We don’t want them walking out the door without a car."

Falling home prices and the collapse of the stock market, as well as tight credit conditions and job insecurity related to the recession, have caused new-car sales to plummet over the last several months. New vehicle sales in the U.S. were down 37% in January compared with a year ago, forcing automakers to slash production and driving hundreds of dealers out of business.