Budgets Under Pressure: Buyers Forced To Used Vehicle Market As Interest Rates And Prices Rise

Rising interest rates are putting pressure on U.S. auto sales and approaching the point where they will turn buyers away from new vehicles, according to the head of the National Automobile Dealers Association.

“Consumers are stretched at this point, budgets are tight,” Wes Lutz, chairman of the NADA, told reporters following a speech to the Automotive Press Association in Detroit. “Payments have gone up. Cars are going up $1,000, $1,500, $2,000. It’s a huge concern for us.”

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TheSteve - 10/10/2018 4:55:10 PM

+2 Boost

Oh, don't worry. The auto industry and lenders will figure out another way to pull off another subprime fiasco. Greed without personal consequences is a mighty powerful motivator!

valhallakey - 10/11/2018 2:18:40 AM

+3 Boost

Massive tax cuts in an already humming along economy, adding 1/2 a Trillion $s to the annual debt ... who would have thought that might cause interest rates to go up??? We don't need to incentivize China or anyone else with higher returns in order to sell this additional 1/2 Trillion we dumped into the market... do we? You are probably right on the subprime fiasco as well since we got rid of some of those debt holding regulations on the banks that were put in place after the last fiasco.

EVisNow - 10/10/2018 9:09:59 PM

+1 Boost

Autospies.com finally put a face to the name of a "popular" used car salesman on this board.

It's not a surprise if you ask me.

TomM - 10/11/2018 6:06:10 AM

+2 Boost

It remains that the middle and lower class of the USA have been left out of the economic "expansion" where their actual take home pay has declined over the last 30 years.

However - when I was younger - the middle and lower class could not really afford much of a new car either - car were even sold without radios back then - still had no power steering - so maye we are just returning to that time when NEW cars were for the rich people.

zlives - 10/11/2018 7:44:33 PM

+2 Boost

and they didn't have cell phones either...

PUGPROUD - 10/11/2018 8:35:07 AM

0 Boost

Interest rates are up to temper inflation due to low employment and rising economy. A standard economic adjustment tool by the Fed. Consumers have gotten use to low rates, no inflation, (high unemployment), and buying cars above their means (M-B, BMW, high end trucks, etc). An adjustment was in order though it will be painful for some, especially the car industry with way too much capacity.