The headlines of the past few days in the car industry clearly stated that the car sale has dropped down as compared to the previous month.
If you go and ask the car dealers, they have a mass of unsold cars stocked in their showrooms. What are they going to do with that? Some of them are dumping them in local markets, while others are selling cars with added discounts and some are even going for finance. It really sounds strange that car dealers are going for finance. Do you know the reason why?
Whatever is the case, dealers have to pay the manufacturer for the car stock they bought. Many of them are going for additional finance to pay the manufacturers. Even they are afraid to go for finance with such high interest rates. If dealers are afraid of the interest rates then it’s obvious that consumers will stay away from car loan and finance.
The current situation has really become a threat for the car companies and even the consumers who are now forced to stay away from the comfort of commuting in a car.With this challenging and tough situation how can a consumer think of buying a car? It's obvious that the dealers will have piles of cars stocked in their showrooms.
I read somewhere that even banks are not willing to offer additional dealer financing. This situation has really created a big problem for the car dealers. They are in between the storm where in from one end they are getting warnings from the car dealers and from the other end auto financers are becoming reluctant. Far apart, many of the dealers have invested in the share market, which is also slowing down.
I heard a lot about this from past few days I feel it is really true that many of the car makers are offering huge discounts to invite the buyers to showroom. Both the car buyers and the makers are having tough time. And many would not like to go for finance because of the interest rates. Who will be ready to pay such higher interest rates?? I will also not be ready for it. We all need to find some solutions to these problems soon.
I completely agree with Mona. Car dealers are facing a very tough time. I really pity them for the heavy losses they are bearing after facing challenges from all ends.
After the increase in interest rates and fuel prices, the sales have dropped down drastically. All the customers who planned to buy a new car this year are now adopting a wait-and-watch policy. Customers have expectations that things will turn back to normal by the end of this year. Then may be the stocked piles would be used and the car dealers relieved.
The major recession that began in 2008 has had a profound effect on the auto industry, and even insurance companies have paid a heavy price for the downturn. While legitimate insurance claims have shrunken a bit since fewer jobs mean fewer motorists on the road, the National Insurance Crime Bureau (NICB) claims that fraudulent claims from staged accidents jumped 46 percent from 2007 to 2009.
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