Normal
0
false
false
false
EN-US
X-NONE
X-NONE

/* Style Definitions */
table.MsoNormalTable
{mso-style-name:”Table Normal”;
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-priority:99;
mso-style-qformat:yes;
mso-style-parent:””;
mso-padding-alt:0in 5.4pt 0in 5.4pt;
mso-para-margin-top:0in;
mso-para-margin-right:0in;
mso-para-margin-bottom:10.0pt;
mso-para-margin-left:0in;
line-height:115%;
mso-pagination:widow-orphan;
font-size:11.0pt;
font-family:”Calibri”,”sans-serif”;
mso-ascii-font-family:Calibri;
mso-ascii-theme-font:minor-latin;
mso-fareast-font-family:”Times New Roman”;
mso-fareast-theme-font:minor-fareast;
mso-hansi-font-family:Calibri;
mso-hansi-theme-font:minor-latin;}

BANDON, Ore. — CNW Research spotted an encouraging trend for
franchise dealers working with buyers with less than sterling credit scores.

Analysts discovered the average FICO score of those who
purchased a new vehicle in the first 11 days of May fell to 669.8, continuing a
downward trend. They added the share of new-unit buyers with FICO scores below
670 reached 14.5 percent, the highest since March of 2006.

Transaction Prices Move Higher


As a share of average MSRP, CNW said transaction prices hit
a "stellar" 87 percent in April, up from last month's reading of 86.9 percent.

"This ongoing narrowing of the gap between MSRP and transaction
prices should generate yet another quarter of excellent profits for Detroit
automakers as well as franchised new-car dealerships and dealership groups,"
CNW president Art Spinella surmised.

"Japanese automakers may not benefit, nor its dealers, since
the supply of vehicles that can be sold at or near MSRP is diminishing due to
production shortages," Spinella continued.

With an average MSRP in early May exceeding $34,160 — up 4.7
percent versus a year ago — and transaction prices jumping nearly 14 percent to
$29,700, CNW thinks it's clear those consumers who are in the market are
settling for models that have highly profitable accessories and trim levels,
boding well for quarterly dealer and manufacturer profits.

"The concern is that without discounts from auto companies
and dealers — which have fallen 30-plus percent versus last year — will lessen
the ability of shoppers to come up with the necessary down payment or strain
family resources to a point that shoppers pull back from the acquisition,"
Spinella cautioned

CNW stressed that lack of cash or trade-in value has
resulted in a rebound in the use of credit cards to make the new-vehicle down payment.

A popular means of meeting down payment requirements in 2000
through 2007, Spinella said credit-card use "fell into the recession black hole
in '08 and '09 only to resurface last year and spike in the first quarter of
this year."