BANDON, Ore. — While touching on what new buy-here pay-here regulations
California did to its long-term used-vehicle sales projections, CNW Research
indicated the year-over-year climb in subprime loan approvals is continuing.

This month, CNW said loan approvals for customers with
less-than-stellar credit who are buying both new and used models are 47.8
percent higher compared to October of last year.

In September, analysts found the year-over-year increase
came in at 62.5 percent.

The firm explained the ascent from the lowest point of the
recent recession is striking. In January 2010, CNW said barely 27 percent of
those getting an auto loan had a FICO score below 670.

"That has risen dramatically in the past few months and now
stands at around 42 percent," CNW president Art Spinella said.

While Spinella noted the climb in subprime approvals, the
home situation for some of these potential buyers is a bit uncertain.

CNW pointed out the share of disposable household income
that is now being spent on necessities is once again on the rise. In January, it
stood at 36.8 percent, and the firm's October survey determined the level to 
be 38.6 percent.

"The most important of the major categories — food prices, gas
prices and the ability to meet day-to-day needs — are significantly higher than
a year ago," Spinella said. "In both cases, those surveyed said these were the
key items that are most likely to drive other spending decisions."

And with the potential buyers in the worst economic shape
possibly heading to a BHPH dealer, CNW revised its long-term used-vehicle sales
projections because of new regulations passed in the Golden State earlier this
year. A complete recap of what happened in California can be found here.

CNW projected that used-vehicle sales will be 41 million in
2013 and 41.25 million a year later.

"These projections are lower than previously reported because
of the recently enacted buy-here, pay-here laws in California. We fully expect
many of those regulations will spread to other states and dampen sales
somewhat," Spinella said.

Used Prices Soften Again

Spotted at both franchised and independent dealerships, CNW
said used-vehicle prices continue to decline on a month-over-month as well
year-over-year basis.

In the opening days of October, Spinella indicated franchised
dealerships were asking an average of $11,419 for used models, off a meager
0.34 percent versus September but up 0.22 percent compared to the same month a
year ago.

But when it came down to the actual transaction price — excluding
add-ons and financing costs — Spinella calculated the price paid was down 3.6
percent versus last year and 4.2 percent compared to September.

CNW went on to mention independents dealers were worse off
with asking prices down nearly 5 percent compared to last year and 3 percent versus
last month with transaction prices softening 7.4 percent and 6 percent
respectively.

"Internet sales continue to be strong, however with 27
percent of those cars offered online finding buyers within 30 days," Spinella
said.


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