By Rick Popely
Despite a record U.S. population and more licensed drivers than ever, sales of new vehicles slipped nearly 3 percent last year to their lowest level since 1998 and are down the same amount this year.
Analysts and auto manufacturers point to several factors for the sales slide, including high gas prices, sagging home values and sluggish economic growth.
But those who study car-buying habits see another factor keeping a lid on car sales: the aggressive borrowing habits of consumers today.
They say borrowers have stretched out their car loans over such a long period of time that some can no longer afford to replace their vehicle.
"They would like to trade, but they can't. They have no equity," said Arthur M. Spinella, president of CNW Marketing Research, which studies consumer buying trends.
Three out of five new-vehicle loans made this year, or 60 percent, are for 61 months or longer, and nearly 20 percent are for longer than six years, according to a Consumer Bankers Association study. Some go as long as 96 months.
Source:
http://www.baltimoresun.com/business/bal-
bz.autodebt02jun02,0,2857227.story?coll=bal-business-headlines
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