New Autology Podcast: Will consumers be over the moon about over-the-air updates? Tune in as we discuss over-the-a… https://t.co/AiYNaJxacy
Low APR Incentives Effectively Offset COVID’s Impact
OEMs' aggressive incentives to offset the negative impacts of COVID-19 started soon after the pandemic spread nationally in mid-March. The focus on low or 0% APR programs moved the US market towards loans and away from leases. Of the households with a leased vehicle in the garage that returned to market this past January/February, 75% leased again, but in the March-July time period only 67% re-leased, driving up the loan mix from 25% at the start of the year to 33% in the most recent five months. Similarly, among the households returning to market this past January/February with a purchased vehicle in the garage, 89% purchased again and this metric rose to 92% in the next five months.
These low APR programs have become so popular that industry-wide
metrics have changed. The average interest rate on a 60+ month loan
for a mainstream 2019 or 2020 model year vehicle purchased in the
four months from April through July of this year was 4.1%, down
from 5.8% during the same time period in 2019. Further, the length
of these loans increased significantly, rising from an average of
69 months last year to 72 months this year.
Brand teams and their captives during the pandemic have taken advantage of the low cost of money to offer enticing rates and payments that have helped to mitigate the impact of COVID-19.
- Fuel for Thought: Can Electrification Deliver for Commercial Vehicles?
- US Infrastructure Bill's EV Charger Funding
- Impact of inventory shortages on US new vehicle industry market dynamics
- Magnesium shortage in context: A real threat or just a price spike?
- Automotive Insights - Canadian EV Information and Analysis Q3 2021
- North American Heavy Duty Parts Outlook
- IHS Markit to share aftermarket trends and insight at AAPEX, SEMA 2021
- No Immediate Relief in Sight for Supply Constraints on Truck Industry