Australian Car Loan Demand Continues To Slide
The slide in car finance declined during April as more mature buyers returned to car showrooms, despite the support, business applications continued to fall, after undergoing a spending spree at the end of last year.
Business credit inquiries dropped by 10 per cent, driving over all demand down by 4 per cent, compared with the same month in the previous year, the fourth consecutive monthly fall.
However private buyers, and in particular retirees returned to the market, helping to make up the difference according to new data released by Veda Auto Show
“Australians aged 65 and over are much more likely to purchase a car than the same time last year, with 11 per cent more credit applications in April,” said David Scognamiglio, the head of Veda Auto.
The decline during April was by far the smallest so far this year.
“This is a reasonable sign of recovery for personal automotive sales given that government incentives led demand in this sector 12 months ago,” Mr Scognamiglio said.
Despite demand rebounding amongst reitrees, younger buyers continue to form the core demand in the market.
“The 25 to 44 year-old demographic remains the most likely to purchase a car in the next six months, with 55 per cent of inquiries coming from this age group,” Mr Scognamiglio said.
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Australian Car Loan Demand Still Well Below 2009 Levels
Despite the recovery in car sales, Australian car loan demand has declined to below levels seen a year ago, and the up-tick in sales is painting a false picture of recovery.
According to new data released this week, the demand for auto finance suggests that recovery is on two tracks, with demand for new cars robust, whilst demand for second hand vehicles crashing as much as 49 per cent in February compared with the same month in the previous year.
The data, which was compiled by Veda Auto suggests that auto sales for both new and second hand vehicles is 9 per cent below the same period in 2009, as the economy was reaching rock bottom.
“We’re definitely at a lower base level, everything is still trending backwards a little bit ” the head of Veda Auto, David Scognamiglio, said.
Mr. Scognamiglio said he was encouraged that despite the decline in private demand, business demand had not fallen off a cliff as the Federal government tax breaks cease and the decline in lending began to take effect.
He added that it would be May before demand for auto finance exceeded the level it was at in 2009.