This Week in Car Buying
- Bloated inventories
- Preparing for Memorial Day Sales Events
- 2020 Subaru Ascent priced
- Loan debt grows
Inventories continue to grow as slow April sales begin to cause vehicles to stack up in the pipeline. With stocks hovering around the 4.1-million mark, the industry recorded a 78-day supply of vehicles on May 1, up five days from a year ago and eight days more than on April 1. Days' supply is the number of days it would take to retail all the vehicles in inventory at the current sales rate.
According to Automotive News, the number of vehicles in inventory is the highest its been at the start of the heavy summer selling season since 2009. Higher production of crossovers and SUVs have resulted in the biggest share of vehicles on the ground with an 81-day supply of these vehicles left to move. Traditional cars, which have seen their share of the market drop versus trucks, saw supplies tighten slightly to 69 days. These sedans, coupes and hatchbacks currently comprise 26 percent of inventory but still account for 30 percent of overall sales.
By brand, Subaru has the tightest supply of just 33 days on hand, followed by Kia with 38 and BMW with 50 days’ supply. Rounding out the top five are Mercedes-Benz with 54 and Land Rover with 59. Fiat still leads the industry with the highest days’ supply of 175, followed by Mitsubishi with 140 and Buick with 114. VW and Ram follow with respective inventory numbers of 108 and 107 days.
Preparing for Memorial Day Sales Events
The next two weeks will see the kickoff of the summer selling season as dealers look to shake off the doldrums of soft March and April sales volumes. There will be new rounds of incentives, discounts on vehicles nearing the end of their 2019 model year run and other closeouts on nameplates that will no longer be offered. There’s plenty to consider and much advance work to be done before hitting your local dealer row to shop for a new ride.
You might want to consider shopping those manufacturers above that have high days’ supply figures. Take Fiat for instance. One of its models, the 2019 Fiat 500X, competes in the heart of the small crossover SUV segment and shares its underpinnings with the Jeep Renegade. And yet, Fiat has a 161-day supply of the 500X and offers a $4,250 cash rebate. Buick, which also has ample stocks of new vehicles to move, has a similar 161-day supply of Regals, which include both the Sportback liftback and TourX wagon with respective discounts of $3,750 and $4,500.
In addition to identifying the type of vehicle you want, be sure to check out the manufacturer’s website and put your zip code in when prompted. There are plenty of localized incentives that you may miss by not identifying your neighborhood. Also, if you’re planning to trade a vehicle in, consult KBB.com to figure out what your vehicle is worth if you sold it privately or traded it in. A helpful tool is Kelley Blue Book’s Instant Cash Offer, where you’ll get offers from participating dealers for either trade-in value or cash sales. This helps to establish a floor on your vehicle’s value.
Subaru prices 2020 Ascent
Subaru announced pricing on its 2020 Ascent, the new midsize 3-row crossover SUV it launched for the 2019 model year. The good news is that it has held the line on base prices, keeping it at $31,995, which is pretty remarkable since unlike other competing models all Ascents come with all-wheel drive. Even better, there are some minor upgrades including a rear seat reminder alert system that’s now standard and an optional power rear gate lock.
In addition to the base model, Subaru offers three higher trim levels. The Premium, which includes safety features like blind-spot detection with lane change assist and rear cross-traffic alert, starts at $34,395. This model is also rated to tow up to 5,000 pounds. The Limited trim level starts at $39,345, which includes leather upholstery and the no-cost option of either having twin second-row captain’s chairs for 7-passenger seating or a bench for 8-passenger seating.
The top-of-the-line Ascent remains the Touring at $45,045, which boasts an 8.0-inch touchscreen with navigation, panoramic power moonroof and a premium Harman Kardon 14-speaker sound system. All prices exclude $1,010 in delivery charges.
Loan debt grows
Reflecting higher transaction prices, auto loan debt grew by 4 percent in the first quarter, according to the New York Federal Reserve. Total auto loan debt stood at $1.28 trillion in the quarter with loan originations and leases for both new and used units growing over 6 percent to $139 billion.
The New York Fed is a bit concerned about the increase in subprime borrowers over the period with their originations growing 13 percent to $27.9 billion. A subprime borrower is considered to have a credit score below 620 and their share of all auto debt is up a point to 20 percent over the last year.
The second-fastest growing set of borrowers were those whose credit scores were between 620 and 659. This group is up 13 percent and account for $17 billion of the debt. The report also noted that serious loan delinquencies rose to 4.69 percent from 4.26 percent over the past year and is the highest its been since December 2011.
Most of all auto loan originations, fully a third, are by those with credit scores above 760 and account for $45.6 billion in activity. The growth in auto debt is also reflected in the number of vehicle owners who are carrying auto loans, it’s also above 33 percent, up from about 20 percent in 1999.
The long-awaited 2020 Toyota Supra is here offering a high level of performance in a package priced around $50,000. We get behind the wheel in this First Review and Video.
Hyundai has made mechanical changes including dumping a 6-speed manual and replacing its automatic transmission with a CVT in the 2020 Hyundai Elantra.
Lincoln has priced its 2020 Lincoln Corsair, the replacement for the compact MKC crossover. The MSRP will start at $35,945 plus delivery.
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