You may hear a lot about enticing loan and lease rates in commercials, but only consumers with the strongest credit scores are actually qualifying for the sweet deals. The rest of the foot traffic in showrooms, depressed as it is, is walking away without new car keys in hand.
That's where the new president and Congress come in. Plans are afoot to buy up troubled auto loans and also allow the beleaguered automakers to tap funds made available to struggling banks. That could help dealers start moving the metal again.
Although current forecasts call for another brutal year for Detroit in 2009, the industry might actually be facing a slightly more bullish outlook, provided it has the cash to lend. That's because several industry headwinds are starting to become tailwinds:
- Gasoline pump prices have fallen 35% since peaking early this summer, and with oil at $65 (at the time of this writing), pump prices could fall another 10% to 15% this winter.
- The average age of the country's fleet of cars and trucks had been quite young, thanks to the above-average sales pace seen in 2005 and 2006. But since then, the fleet has steadily aged, and a large number of vehicles, especially pick-up trucks used in heavy-duty environments, are moving closer to the end of their useful range.
- The automakers have been working feverishly to roll out freshly designed fuel-efficient vehicles, a number of which are expected to hit the market in 2009.