DALLAS — Even low prices can’t keep consumers from shying away from vehicle purchases.
Depressed consumer confidence has pressured new-car sales since 2008, but now the buy-here, pay-here sector is feeling the effect of low consumer confidence, too.
At a session at the NABD Underwriting & Collections Conference this week, Ken Shilson said that although sales in dollars are up slightly this year compared with 2009, unit sales are down.
“Consumers are somewhat apprehensive about incurring new debt in 2010,” said Shilson, founder of the National Alliance of Buy-Here, Pay-Here Dealers. “If they have the ability to pay, they’re staying in the vehicle and paying it. They’re reluctant to take on big, new indebtedness.”
Other trends Shilson noted: The availability of inventory has been limited this year; to offset higher vehicle costs, BHPH dealers have had to buy cars with 5,000 to 10,000 more miles on them. Also, industry consolidation is on the horizon because not all players can access capital.
