100,000 Plus Car Shoppers Waiting to Buy, Edmunds.com Calculates
July 20, 2009
SANTA MONICA, Calif. -- More than 100,000 car shoppers have been preparing to buy a car,
but haven't yet made the purchase and as a result July vehicle sales are likely to be on par with June sales.
"There has been a recent surge of purchase intent on the Edmunds.com shopping site that has not translated into sales," Edmunds.com Senior Analyst David Tompkins, PhD told AutoObserver.com.
"Given that this volume represents about 10 percent of the current market, automakers and dealers should find a way to capitalize on the opportunity and entice these folks to make a deal," Tompkins added.
Consumers are holding onto their vehicles for longer periods of time than in previous months and years. Edmunds.com analysts have calculated the average mileage on trade-in vehicles is up 8 percent versus a year ago and up 15 percent since January 2008. The current average trade-in mileage is 65,883. A year ago, it was 61,038, and, in January 2008, it was 57,079.
"There is a strong correlation with the weakening economy," notes Dr. Tompkins. "The average trade-in mileage is increasing at a pace similar to national unemployment rates."
Based on early data, Edmunds.com forecasts that July sales will only be slightly higher than June's sales
. In June, industry sales came in at a Seasonally Adjusted Annual Rate (SAAR) of about 9.7 million units. That is, unless the much-anticipated "Cash for Clunkers" program generates significant activity. Still, Edmunds.com estimates most in-market shoppers are unlikely to qualify for Cash for Clunkers.
Dealers can begin to sign up for the on July 24 to participate in Cash for Clunkers - officially known as the Car Allowance Rebate System (CARS); processing for vouchers begins July 27. Edmunds.com lays out the specifics of the program in its Cash for Clunkers Resource Center at http://www.edmunds.com/cash-for-clunkers.
CARS backers estimate the program will add 250,000 vehicle sales in its three months it is in effect.
Posted by Michelle Krebs at 10:37 AM under Analysis , Companies , Featured | Comments (2) | digg this | Seed Newsvine
broken link to the Edmunds cash-for-clunkers page
Posted by: stephen987 | July 21, 2009 at 8:29 AM
Your data seems to indicate that, based on trade in average milages, folks are postponing their new vehicle purchases by roughly eight months to a year. This has a long term negative effect.
As average trade values go down (older unit, higher milage) and new vehicle prices rise (increased raw materials cost, more standard content) the difference between trade in and new vehicle becomes greater. Add to that the sticker shock factor, tougher credit and severely limited leasing programs all ensuring that the market might hobble along at around 10- to 11 million SAAR for years.
The majority of commenters to this site, including myself, don't believe the CARS (Congress Aint Really Serious) program will have a significant effect on sales for a variety of reasons.
It might be interesting to hear from the automotive dismantling industry with their opinions of the effect on scrap metal prices all the anticipated extra CARS cars will have.
Posted by: fulcrumb | July 21, 2009 at 10:27 AM