Consumer Car Buying Advice Blog

A recent consumer survey showed confidence in the U.S. fell to the lowest level since 1980. What did the survey say and how can you, as a consumer, take advantage of this market?

May Consumer Sentiment continues the downward trend

To quote the report, “Consumer confidence fell to its lowest level since the June 1980 survey. The decline was due to surging food and fuel prices, falling home prices, shrinking employment and smaller income gains. “Consumers are painfully aware that their living standards are shrinking under the weight of higher food and fuel prices and see little hope for improvement any time soon,” according to Richard Curtin, the Director of the Reuters/University of Michigan Surveys of Consumers. Consumers’ ability to buy has been diminished by smaller income gains, fewer jobs, higher prices of necessities, falling home prices, rising credit standards, and record levels of outstanding debt. Consumers have become more cautious spenders and are determined to rebuild their reserve funds. “For consumers to increase their savings as well as cope with the higher costs of food and fuel will require a prolonged shift in budgets away from discretionary spending,” Curtin said.”

The report goes on further to state that, “Buying plans for vehicles and household durables, such as furniture, appliances, and home electronics, were the least favorable since the early 1980’s. “When asked to explain their views, consumers said that they favored the postponement of purchases given their uncertainty about their future income and job prospects as well as concerns about the future course of gas and food prices,” Curtin said.”

Does this mean that this is a buyer’s market?

If you take a look at real estate sales for most of the nation, it certainly looks like the buyer is in the driver’s seat. Property values continue to decline in most parts of the country. According to the National Association of Home Builders, new home construction is at its lowest level since 1991.

How does the current economy affect auto sales? Looking at pickup trucks, the lowest forecast, to date, is 1.65 million, quite a drop from the 2.5 million sold in 2004 and 2005. Big SUV’s are in the same predicament – huge drops in sales numbers. But what about the rest of the car market – what’s the impact of $4 per gallon gasoline and what can buyer’s expect?

It really depends on what you’re looking for

Unlike the real estate market, there are some bright spots – some of them very bright – in the auto industry. While full-size pickups and big SUV’s sit gathering dust on dealer lots, many small, fuel-efficient cars are being sold and delivered as quickly as dealers get them in.

According to Automotive News, the top 10 vehicles, in sales, for the month of May were: Honda Civic, Toyota Corolla, Toyota Camry, Honda Accord, Ford F Series, Chevrolet Silverado, Nissan Altima, Ford Focus, Chevrolet Cobalt and the Chevrolet Impala.

The Bottom Line

If you’re in the market for a pickup truck or large SUV, it’s definitely a buyer’s market. You should expect a great deal on one of these vehicles. On the other hand, if you’re looking for a small fuel-efficient vehicle, don’t expect the dealer to give away the farm. Even in a down market, these cars may be hard to find. When you do find one, expect to pay close to sticker price.

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