ORLANDO, Fla. — The economic near future looks almost entirely favorable for auto finance, said Ira Silver, the economist for the National Auto Auction Association.
Favorable factors include a growing driving-age population, continued cheap credit, increasing household wealth, an improving housing market — which also increases demand for pickup trucks — and a strong labor market, Silver said in a presentation at the NAAA Convention here on Wednesday.
He said he’s not too worried about volatility in the financial markets. “It is important to remember that what happens in the financial markets often has little to do with what happens in the real markets,” he said. “I am talking about people buying cars, people building houses, real things.”
Silver said it’s worth keeping an eye on stock market volatility, but the market is only a threat if a steady negative trend sets in, which he hasn’t observed. “The financial markets have the potential to reduce household wealth, which affects business and household confidence, which can potentially slow economic growth.”
New auto sales will stay strong through 2016, which is expected to be the peak for new-vehicle sales growth, Silver said. “I am not saying that the sales will crash after that, but they will certainly slow down,” he said. He said he expects sales of 17 million units this year, followed by a record 17.5 million in 2016.
For more content like this, check out the upcoming Auto Finance Summit, October 21-23 at Wynn Las Vegas. Visit www.AutoFinanceSummit.com for more information.
