Summary
Auto sales could be the next victim of the problems with mortgages, as potential car buyers delay purchases. Concern about home values and mortgage payments is causing more buyers to slam the brakes on new car purchases.
Analysis
Auto Sales in August could be off at least 10 percent from a year ago, according to several sources. That follows July sales that were 19 percent below year earlier levels. Clients report a dramitic drop ion showroom traffic.
Edmonds.com said that the downturn in home values and credit issues that were seen in July could be an even bigger factor this month.
CNW Research found thet 13.6 percent of the potential market's customers were postponing plans to make a new-vehicle purchase any time soon, up from 10.1 percent last year.
And, of those postponing or cancelling plans to buy, (17.6 percent) home-related issues were the number 1 reason.
Two years ago, their research found just 2.3 percent were postponing a car purchase because of home-related issues.
In an informal survey of my dealer clients, there was wide-spread feeling that all lenders are tightening their belts on new car loan requirements. Many with shaky credit that would have been approved a few months ago, were finding it very difficult to qualify.
