A shift to used-vehicle sales in the US is the latest data point that suggests ‘peak car’ may have already happened in the United States.
Shareholder returns for GM and Ford have been weak as a slew of concerns continue to build around the legacy automakers.
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Debt-strapped millennials. Ride-sharing apps. Self-driving technology. The list continues to grow as evidence of “peak car” mounts.
Now it’s time to add a shift to used-car sales to the list, according to a recent report from CFRA Research. Rising prices for new vehicles over the past few years have accelerated the change in consumer behavior.
The trend is particularly pronounced among the highest-quality borrowers, whose take-up rates for used-car financing rose from a year ago, according to the report. The percentagee of “prime” credit consumers financing used cars hit a record high of 62% in the first quarter of 2019.
“In our view, the fact that the most qualified consumers are increasingly gravitating toward used vehicles is a potential red flag for automakers who continue to push the limits of consumer affordability,” wrote Garett Nelson, the author of the report.
Fears that the US auto market has …read more
Source:: Businessinsider – Finance