Congress mulls delayed payments as SAAR plummets

© Can Stock Photo / njene

New vehicle sales forecasts are quickly deteriorating as the coronavirus pandemic spreads across the nation. In fact, vehicle sales will likely land in the mid-13-million-unit range for 2020, Eric Lyman, chief industry analyst for ALG said Monday.

“With the temporary closure of dealerships across the nation, continued declines in the stock market and ongoing uncertainty around the short/mid-term strategy to battle COVID-19, ALG expects further declines in our annual automotive sales forecast.” Lyman said. ALG noted it will revise its forecast weekly as news about the pandemic unfolds.

Last week, ALG forecasted the new vehicle SAAR to come in at 16.4 million units.

The forecast omits considerations regarding “severe impacts and ‘speculative pessimism’ from delayed or ineffective stimulus packages” provided by Congress, according to the report.

However, no stimulus package has yet passed both the Democrat-controlled House and the Republican-controlled senate. On Capitol Hill, representatives from both sides of the aisle have been sparring over the details of a federal stimulus package intended to boost the economy. And in its current iteration, the repercussions would trickle down to the auto finance industry.

The House introduced yesterday its latest $2.5 trillion dollar plan, which would force auto financiers to grant consumers temporary forgiveness on their auto loan payment, although the length of the reprieve wasn’t specified. By comparison, the bill would grant consumers payment forgiveness on their mortgages for 360 days. Individuals would also receive a $1,500 check — up to $7,500 for a family of five — to help encourage consumer spending.

The bill comes as a response to Senate Majority Leader Mitch McConnell’s $1.8 trillion dollar plan, which Democrats blocked Monday. No vote has yet been scheduled, but Senate Republicans “denounced the bill as a wish list,” according to reports by Bloomberg.

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