Higher gas prices fueling sea-change in buying habits
Black Voice News Staff Report
There’s no time like the present to buy a car, according to the Sacramento-based California New Car Dealer Association. California new car sales are putting a smile on the gloomy Inland Empire economy. New vehicle registrations increased 17.7 percent during the first quarter of 2012 compared to the same time a year earlier, California’s new car market also outperformed registrations in the rest of the country, which only increased about 13 percent, according to the association.
New vehicle registrations are expected to hit almost 1.5 million in the state. Association chairman John McCallan, who operates dealerships in Riverside and San Diego, said the sales results for the quarter “bode well” for the rest of the year. McCallan says if you are in the market for a car, there may not be a better time to go get one. Of course, do lots of homework first: Figure out what make and model are best for you, then read up on how to get through that whole showroom ordeal. But apparently plenty of folks agree that it's a good time to buy a car, because Americans bought 20 percent more of them last month than in August of last year. Rising demand helped push total nationwide car sales to over 14 million last month. "That's basically going back to the good old days," said Phil Reed of Edmunds.com., an online resource for automotive information. He said that about 12 years ago, annual car sales in the United States was 16 million; car sales in 2012 are on track to reach 15 million.
What is causing this boost in car sales? Soaring gas price are fueling what may be a "sea change" in Americans' car-buying habits, according J.D. Powers and Edmunds. The price of a gallon of unleaded regular gas tops $4 in most parts of the country, up 30 cents last month alone. At the same time, new cars sales jumped 18 percent from April 2010.
Many people think car sales are rising despite the higher gas prices, but Reed says, "The reality is that car sales are actually rising because of higher gas prices - because all of these automakers, and the Detroit (Big) Three are a big part of this -- they are putting out more fuel-efficient cars, and those are the big sellers right now. "If you went to the (just-concluded) New York Auto Show, you saw all of these fuel efficient cars -- among them, the Chevy Cruise, which is a General Motors car, is ... definitely selling big ... and General Motors saw its sales, of all the automakers, go up the most, by 27 percent in April."
Other buying factors include incentives such as zero money down and zero-percent financing for up to five, sometimes six years. Such incentives can save several thousands of dollars over the years. Reed said that a buyer of a 2012 Ford Fusion, which costs $22,300, will have a monthly car payment of about $360 for 60 months, if the buyer has zero-percent financing. Without, they would pay $427 with a 6.9 percent interest rate, a difference of $3,000 over five years.
If a buyer wants to take advantage of incentives, he should first apply for independent financing. After applying, the buyer will know what kind of interest rate they'll qualify for. Armed with that information, the negotiation process at the dealership will be easier.
|< Prev||Next >|