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2013 auto sales: From subprime to costly collectible cars

classic car

Photo: Alan Daylay

Automakers are expected to post new-vehicle sales on Thursday, and if you haven’t done a car-related story lately, the monthly numbers are a useful springboard for all sorts of economy and personal-finance reports.   That’s especially so at this period, in which manufacturers and dealers are motivated to clear off lots of the expiring sales year’s models and when orders for the new model year are abut to start rolling in.

And of course, mid-summer is a good indication of how sales are shaping up overall for the year – TrueCar reports that July sales are expected to be slightly off from June’s hot pace, but still up in mostly double digits, on a company-by-company basis, compared to July 2012.  Overall, TrueCar forecasts growth of more than 15 percent, and the seasonally adjusted annual rate of sales (SAAR, the industry measure that translates to “at the current pace, this is how many cars we’d expect to sell for the entire year) is pegged at nearly 16 million, the highest since pre-recession 2006.  (Here’s a link to the Wall Street Journal’s auto sales market data center, for helpful statistics.)

All good news and fodder for a number of stories.   I like the observation in the TrueCar release that pickups and other trucks are in demand by small business and particularly the housing industry; instead of focusing on passenger car sales, you could look at area companies in the construction-related sector – plumbing, electrician, well excavation, etc. – and see if any patterns emerge in their vehicle-buying trends.  Are they more conscious of vehicle size and fuel mileage?  Are commercial users turning to electric vehicles?  Are companies getting easy financing for new vehicles?

Financing trends.  In recent months we’ve seen stories about super-long loan terms; now an apparent surge in sub-prime loans (to people with poorer credit) is afoot; this recent release from the Experian credit rating firm says that more than 45 of first-quarter car loans were subprime, including more than 25 percent of new car loans.  That and more demand for leases makes me wonder if consumers — who since the recession had been limping along in older cars, driving the average car age up to record highs — now aren’t biting off a bit more than they can really afford in the new-car market.  It’s an interesting basis for interviews with lenders, car dealers and even automobile repossession firms.

classic cars cruising

El Cajon Cajon Classic Cruise Car Show is the largest weekly classic car show in Southern California. Photo: Chris Allison

Classic cars.   This is a good summer story for a twist on the used car market, with retro cruises and classic car shows being popular August pastimes.   And if you haven’t investigated it lately, the collector car market is quite a little economic engine of its own, fueling lots of small businesses like restorers, customizers, lettering and decal artists, engine re-builders, parts shops, fabricators, trailer companies, exhibition promoters and more.   According to this Los Angeles Times report from last summer, classic car prices are on the rebound, surging 33 percent (as of the article’s writing) from 2009 recession lows.   One specialty insurance agency, Hagerty, also has founded the Historic Vehicle Association that may be a resource.  And Hemmings, a collector car marketplace, also publishes some go-to journals for enthusiasts that will help you understand the scope of the market.

You can address it as a personal finance piece, like this MSN story about “10 affordable classic cars for hot summer cruising” — readers always love a good personal finance expose about how much this hobby costs, and how it can be done more economically, or as a small business/economy story by ferreting out the sorts of firms that serve the classic car market — restorers, customizers, paint shops, parts shops.  Believe me, the car owners love to talk about their “babies” and will point you to an endless array of fascinating craftspeople.

About the Author

Veteran financial writer Melissa Preddy served as a business writer, editor and columnist for The Detroit News from 1995 to 2008, is a Michigan-based freelance journalist. She now works as a writer and editor for a medical research unit of the University of Michigan Medical School. Follow her daily posts. | E-mail: Melissa Preddy

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