Friday, September 07, 2007

Decreased Auto Sales

As we watch and analyze the economic news relating to the credit crunch,the analysts are quick to point out that decreased auto sales are an indication of the spillover of the subprime events.They point out ,correctly, that people are hesitant to take home equity loans for auto purchases, when they fear their home values have diminished.
There is another factor not discussed.The quality of the modern auto is so much superior to those produced 10 and 20 years ago, that one can have auto for 4-6 years with 60-1000,000 miles of usage,without ever having to bring the car in for repairs ,other than an oil change.When many of the models look the same 3-4 years later,and you have a well functioning car, the thrill of a new car purchase is not as acute.
In addition when professionals retire,they suddenly have to purchase their own car,rather than having their professional corp. ,or office pick up the tab.When you combine this with autos that last longer,it is not unusual to put off that purchase or lease which used to be every 24-36 months by a year or two