Promotions to help buyers are restoring car sales
Automotive sales plummeted in April following the coronavirus market crash, shutdown and resulting economic uncertainty, and some local and national dealers are offering new promotions to help buyers finance cars.
Goodcarbadcar.net, which produces a month-by-month analysis of the nationwide auto market by breaking down raw data from the US Bureau of Economic Analysis, reported that nationwide auto sales began dipping in March and hit a low in April before slowly climbing in May. Year over year new vehicle sales dropped each month, from 1,552,126 last March to 903,194 this March, 1,355,548 to 168,850 April to April, and 1,606,260 to 312,113 May to May.
“It bottomed out in March and April,” said Keith Troup, chief lending officer of Tropical Financial Credit Union, “but May was better than April, and June numbers halfway through the month are better than May.”
There has been, Mr. Troup said, steady upward progress since the initial drop.
In fact, some dealers think pent-up demand may factor into sales recovery coming out of the shutdown. Steve Ostrov, general manager of Toyota of Hollywood, told Miami Today via email that the South Florida market is getting stronger, in part due to pent-up demand, and that in May his dealership exceeded the number of cars sold the same time last year.
In order to help customers finance vehicles, he said, his dealership is offering special financing programs through their manufacturer. “We are offering low, long-term interest rates as low as 0% and low-payment, short-term leases with minimal cash out of pocket costs,” he said, “as well as special offers for first responders and healthcare workers.”
David Garcia, a salesperson at used car dealership Premium Cars Miami, said his dealership was waiving some fees for finance programs and trying its best to work with customers. In particular, he said, Premium Cars waived late fees for customers who chose their “Buy Here Pay Here” program, which allows customers to finance their purchase through the dealership for $999 down.
“We understand the situation,” he said, adding that Premium Cars was willing to work on a case-by-case basis with customers with a good payment history. “We’ve made a couple exceptions this month for a couple of customers that always pay on time and, unfortunately (can’t right now) because of their job situation,” he said. “We’re giving them a break, (letting) them catch up later on with the payment.”
According to Mr. Garcia, rising economic uncertainty and unemployment have led to an increase in automobile returns. However, he said, sales have started to pick back up this month.
“There is a tremendous amount of uncertainty in the marketplace as a whole, and I think rightfully so,” Mr. Troup said. Tropical Credit Union, he said, has seen only a slight increase in repossessions. “We try to work with people for solutions that contact us to turn in their vehicles,” he said, adding that the uptick in repossessions equaled roughly two to three extra cars per month.
“We’re being prudent in lending and making sure we feel good about the loan transaction,” he said. The credit union, he continued, has not changed its standards for auto loan recipients. “We haven’t changed our underwriting standard,” he said. “Our consumer loan rates haven’t changed at all over the last four to five months.”