Rising Interest Rates to Hit Used Car Market

First Up 05/10/22

Rising Interest Rates to Hit Used Car Market

Rising interest rates are expected to hit the used car market, while new car buyers will hardly notice rate hikes, analysts predict. The Federal Reserve Board hiked the discount rate by half a point last week — its biggest hike in two decades — as it moves to relieve the inflationary pressures created mainly by supply chain disruptions and rising energy costs reports The Detroit Bureau. Cox Automotive noted this week the rates on auto loans have also moving higher but not by as much as on home mortgages. Average new auto loan rates have moved up about 70 basis points year to date. Average used auto loan rates have increased about 75 basis points. “With rates expected to increase by well more than a point beyond the increases observed so far, financing costs will quickly make financing big-ticket purchases more challenging. This is exactly what the Fed wants to see. As demand for homes, cars, and other durables declines in response to declining affordability, the rate of price increases should slow as well,” Cox noted. Click here for the full story.

New Twist in Automotive Recall Trends

The auto industry chalked up a record 406 recalls in the U.S. in 2021. NHTSA mandated 259 of those. Yet, last year’s recalls involved fewer vehicles: 21.6 million compared with 28.9 million in 2020, a year that saw 317 recalls, reports Wards. “It was an interesting year,” Neil Steinkamp, Stout’s managing director, says of the 2021 paradox of more recalls but fewer affected vehicles. “It seems like a trend going forward.” In contrast, the year 2000 had 202 recall campaigns (about half that of last year) but affecting more vehicles (22 million). About 10 million (nearly half) of 2021’s recalls involved faulty or potentially faulty airbag systems. “Airbags were the most represented,” Steinkamp says. Other top issues: Brake, seatbelt, powertrain, steering, suspension software, and electronic systems. “Aging electronics are beginning to manifest themselves in recall campaigns for older vehicles,” Steinkemp says. In the name of traffic safety, Stout advocates enhanced industry efforts to reach out to current owners of recalled vehicles, whomever and wherever they might be, and persistently urge them to resolve their vehicle issues. “Outreach is challenging,” Steinkamp says. Click here for the full story.

Toyota Is Running Out of Federal EV Tax Credits

Toyota has long made a big deal about the Prius name meaning “to go before.” When it comes to electric vehicles, though, Toyota is more accurately going third — at least in regards to it reaching the full limit federal tax credit on EVs and plug-in gasoline-electric hybrids (PHEV). At the end of 2021, 183,000 EV and PHEV Toyotas qualified for the federal tax credit, with another 8421 cars added to the ledger at the end of the first quarter of 2022, reports Car and Driver. At this rate, Toyota expects to run out of these full credits — which are limited to 200,000 for each automaker before starting a gradual deduction reduction throughout the course of a year—sometime before the summer. Once Toyota hits this mark, its newest EV and PHEV buyer will be able to nab a tax credit worth half the maximum sum for six months, followed by a tax credit worth a quarter of the original sum for another six months. After that, Toyota EV and PHEV consumers will have to purchase these vehicles sans a tax incentive from the federal government. Click here for the full story.

The Importance of Improving Diversity, Equity, and Inclusion in the Workplace

A recent research study from Bain & Company revealed that 25 to 30 percent of people report feeling “fully included” at work, which was found across “all geographies, industries, and demographic groups.” Asian employees, however, reported feeling the least included, with just 20 percent of Asian women and 16 percent of Asian men saying they feel fully included. Other groups who reported they feel fully included at work include LGBTQ+ women (29 percent), Latinx women (26 percent), straight white women (25 percent), black men (25 percent), straight white men (24 percent), Latinx men (24 percent), LGBTQ+ men (23 percent), and black women (22 percent) reports CBT News. There is no question that diversity, equity, and inclusion (DEI) in the workplace is important to employees. The majority of respondents in many studies have reported they place some importance on it. Some people leave their jobs because of a lack of inclusivity, and others remain unhappy in their positions for financial reasons, which can lead to an overall sense of dissatisfaction. So, what can be done to foster a sense of inclusion for all populations in the workplace? Click here for the full story.

New York Dealership Group Sees Big Business in Commercial Trucks

For Basil Family Dealerships in western New York, selling big trucks and vans to commercial clients is big business. Automotive News reports Basil is one of many retail groups across the country to make a successful business out of selling and outfitting light-duty trucks and cargo vans for electricians, plumbers, landscapers, and other commercial clients. From dump trucks and dry freight trucks to cutaway vans and cargo vans, about 1,000 vehicles are sold by Basil for commercial use every year, said Bill O'Brocta, commercial fleet sales director for the group, which has Chevrolet, Buick, GMC, Cadillac, Ford, Toyota, Volkswagen and used-vehicle stores in markets outside Buffalo. The group also has two commercial vehicle centers. "We do small fleet, larger fleet, lots of government business and small business," he said. "Vehicles can range from cargo vans to pickup trucks to cube vans. We're not No. 1 in one particular area. We kind of spread the wealth around and help everybody in all facets of the commercial business." Click here for the full story.


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