This Week in Car Buying: Hurricane season impacts everyone; 2018 Mazda CX-9 updated; Fiat 500X Urbana bows; Loans lengthen
Hurricanes Harvey and Irma, while devastating for its victims, will also have a major effect on the vehicle market for the rest of the year, as the industry rushes vehicles into the Houston area to replace the estimated 300,000 to 500,000 vehicles lost in the storm. Similar losses could occur with Irma. While these storm related incremental sales will help the industry that has been dealing with a slowing market, the number of vehicles scrapped by hurricane damage and flooding being taken out of the market will have an impact on the used car market as well. Prices are expected to hold firm or increase as demand for used cars to replace damaged, older vehicles rises.
Already wholesalers in states as far away as Ohio has seen an increase in activity as used car dealers look to buy up cars to ship to the stricken area. Automotive News reports the cost of shipping the cars to Texas will be more than made up for in higher margins—the $1,000 or more extra the vehicle will earn offsets the $500 transport cost. And wary used vehicle buyers will likely be more interested in a vehicle that has come from outside the flooded area.
According to Cox Automotive chief economist Jonathan Smoke, “Harvey will be net positive. We expect the recovery in vehicle sales to be quick.” Smoke estimates now that sales will top 17.1 million this year, up from last month’s seasonally adjusted estimate of about 16.13 million.
Meanwhile, in Florida, dealers are hunkering down by closing up for the weekend and moving inventory to more secure locations.
2018 Mazda CX-9 updated
Just a year after its introduction, Mazda has updated its CX-9 3-row crossover SUV, adding new features and standard equipment. The 2018 Mazda CX-9 will now be equipped with Smart City Brake Support, an automatic braking system that functions at speeds below 19 mph. In addition, blind spot monitoring and rear cross-traffic alert are now standard.
Mazda has also added its G-Vectoring Control software to the powertrain. This technology monitors steering and throttle inputs to minutely reduce engine torque in cornering, which shifts more weight to the front wheels. This makes the steering feel more linear and direct, which leads to increased driver confidence and control.
Four trim levels return, Sport, Touring, Grand Touring and Signature, all with more equipment at each price point. A new Sport Package on the base models includes automatic headlights and high beam control, lane departure warning, lane-keep assist, smart brake support, rain-sensing wipers, heated front seats and radar cruise control. New Touring features include a tilt function on the driver’s seat and power passenger seat with lift and lumbar support. Grand Touring models now come with heated second row seats, heated steering wheel and windshield wiper de-icer. Signature models feature Auburn-colored Nappa leather upholstery, rosewood trim, LED signature grille and LED interior lighting.
Prices start at $32,130 for the CX-9 Sport with the Sport Package an additional $1,290. CX-9 Touring is priced from $34,960 and the Grand Touring is $40,470. All these models are front-drive; all-wheel drive is $1,800 extra. The all-wheel drive Signature is priced at $44,315. Delivery is $945 extra. The 2018 Mazda CX-9 goes on sale this month.
Fiat Introduces 500X Urbana Edition
Looking to expand the appeal of its subcompact crossover SUV, Fiat has developed a new appearance option package designed to appeal to city dwellers. The 2017 Fiat 500X Urbana Edition features new paint schemes offset with Miron (metallic iron) exterior and interior elements, along with copper accents. The four new colors include Graphite Gray and Blue Sky metallic along with White and Black Clear coat treatments.
The Miron elements on the new model include the mirror caps, door handles, taillamp surrounds, liftgate bezel, fascias and sill moldings. The 18-inch alloy wheels are matte black and Miron with a copper center cap. Black roof rails and dark headlamp surrounds complete the look. Inside, the 500X Urbana Edition has unique seats with black chevron-patterned fabric and copper embroidered 500X logos, a black textured instrument panel, black center console and Miron colored radio and vents.
Based on the Trekking trim level, the 2017 Fiat 500X Urbana Edition Package is priced from $24,195 for front-drive models and $26,095 for all-wheel drive. The new package will be available this fall.
As auto-loan balances continue to rise, borrowers are also finding themselves in longer term contracts. According to Experian, auto loan balances topped $1.1 trillion, a new record representing a 7.1 percent increase. For doomsayers who see a subprime bubble, Experian data shows that most of the growth came from prime borrowers and that subprime and deep subprime activity fell in the second quarter from 19.3 percent to 18.4 percent of the market.
The growth in prime and superprime borrowers, which has gone up to 19.1 percent from 17.9 percent of the market is also reflected in delinquencies, where the rate for all loans and leases have declined to 2.20 percent down from 2.22 percent a year ago.
But loan terms continue to stretch out and now stand at an average of 68.8 months, two weeks longer year-over-year. Used vehicle loans are also longer at 64.98 months, according to Experian.
Loans between 61-72 months now account for 40.4 percent and 73-84 month terms represent 32.5 percent of the market. Even though longer term loans usually result in lower monthly payments, Experian reports that the average monthly outlay is $504, up $5 from 2016. This is a reflection of higher transaction prices as buyers shift to more expensive crossover SUVs from traditional cars. The average monthly payment for used cars stands at $365 up only $1 from a year earlier. Leasing continues to account for about 31 percent of the market and the average payment is $412, up $8 year-over-year.
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