Nearly Half of Americans Putting Off Buying a New Car

A recent Consumer Reports survey found that 48% of Americans are delaying the purchase of a new car, saying they will wait longer than usual before making that purchase.

The top reason why buyers are waiting longer is that their current vehicles are in good shape (39%). However, the weak economy is clearly a major factor; 30% cite the poor economic conditions as a major reason to wait, while the same number say vehicles have become too expensive. According to the survey, 18% are waiting for fuel-saving technologies like hybrids to become less expensive, while 18% say financing for a vehicle is too expensive.

This last 18% should be of particular concern. The credit crisis has made car loans scarce, and among lower-income households, nearly a quarter (24%) said obtaining financing was the main obstacle for them when they consider buying a new car.

While it’s not surprising, this is extremely bad news for automakers going into 2009. Perhaps the only silver lining is that with the GMAC bailout and credit unions offering more car loans, other lenders will relax credit. Then there will be a reason for at least 18% of Americans currently delaying new-car purchases to choose to buy.

Comments

It may be bad for the automakers in the short term, but surely it is better in the long run if those people who cannot really afford a new car are prevented from taking on finance for a while? Isn't that essentially what brought the economy tumbling to it's knees in the first place?

I suspect the car makers here are going to have to get used to a lower base of people who can afford new vehicles regularly, just like in the rest of the world...

Car loan defaults don't have as big an impact on the economy as homes obviously, but you're point is still accurate. I think how well cars are made now will force the annual sales figures down even after the economy rebounds. I also expect all automakers to significantly trim their lineups.

Maybe we need to get back to cheaper, throwaway cars. My first new car cost $2,450 and had rust on it within three years.

Hybrit,
That is an absolutely ridiculous comment. People already consume too many resources and energy and fill up the landfills too quickly and you want to add to that, not a good idea.

Still, the idea of cheap cars is good. The only problem is that costs are higher than a few decades ago. For $2,500 all you will get is a Tata Nano.

I don't speak for the rest of the world. But in America, many people live lives they couldn't afford. Thanks to credits. And then everybody hurt. And those people themselves. Instead of improving themselves, trying get education, etc. to earn more, they go to the bank for the credit. Because their dream - car, house and others.
People must live level they CAN afford. And lets stop this car culture. Luxury, etc. Lets make it a transportation, like water heater heats the water. You don't wrap it into the leather or paint into special color for $100 extra. So should be the car. It should take you where you need in relative comfort. Lets make it medical comfort. If it doesn't hurt your back then it is good enough. We just have no end of our demands.

Tony is right. The average new home is getting smaller, and more basic type cars should also be offered. My comments about a disposable car should have reflected that I believe all vehicles should be recycled at the end of their useful lives.

Too many people find themselves upside down in their vehicles when it comes to auto loans. Face it, with all these rebates, employee pricing, factory discounts, etc., the vehicles are so depreciated right away that the consumer is going to have to drive it for a long time until the payments catch up to the trade-in value of the vehicle. Chrysler got out of leasing because their vehicles depreciated so fast that the residual value was not worth a darn. The bargains are in the used car market where one can get a vehicle that's a couple of years old with low miles for about half the price of a new one. The recession, credit crunch, housing bust, and 401K losses are making people think twice about purchasing a new vehicle. This coming year or two will not be banner sales years for the automotive industry.

good thing. people are seeing what they really need. didn't we give 700 billion so we can get credit? what is the deal with that?

Two sides to this:
It's reflective of a cycle. We bought too many cars (and too big and too fancy cars and houses) when credit seemed unlimited and the ramifactions of our actions seemed small; ow we are pulling back for good cause, but there will be a rebound because more people will be driving worn-ut cars in another year.
Second, one hopes we will be more responsible in the future and live more within our means-- at least until we forget the lesson and become profligate again, as we have each time before. One wonders if the sheer scale of our folly, having been greater this time, might result in more lasting changes as we come to realize how much damage we do by over=consuming with huge houses on huge lots with several huge SUVs in their 4-car garages... and the corresponding economic damage.

I don't know. I drive a 2005 Pontiac Grand Am. My mom bought it for me in mid 2006 since I have bad credit due ti medical bills and the like. And also I have a low paying job where I could,nt afford a car payment if I wanted too. I figure if it runs good and is,nt a total rust bucket and gets you from Point A to Point B then why complain about it. Oh sure there is newer and better that I wish I had. But I am grateful for what I,ve got. There are folks who are much worse off. Some people don,t even have a car at all.