Edmunds.com Sees A Queue Of Potential Buyers
But the firm also notes that consumers are hanging onto their current wheels with the average mileage on trade-in vehicles now up about 8% over a year ago and 15% since January last year, per the firm -- which says the current average trade-in mileage is 65,883, while one year ago it was 61,038 and in January 2008 it was 57,079.
Jesse Toprak, senior analyst at the Santa Monica, Calif.-based company, says that 10% makes a difference. "We have seen more numbers of consumers ready to pull the trigger than we have in the past and that's a combination of two factors," he says. "First, a general pent-up demand due to the decline in the economy and consumers postponing purchase, and second, [driven by] the 'Cash for Clunkers' program."
Toprak notes that even though the program -- officially the Car Allowance Rebate System (CARS) -- began on July 1, mid-month sales numbers didn't reflect the number of people who have taken advantage of the program because dealers are waiting at least until the Friday's "official" beginning of the program to complete transactions.
"So the deals made prior to dealerships getting [CARS] certification were somewhat at risk. What we have seen most commonly is that dealerships wrote deals and took deposits but are waiting to go through [with] the transactions because they don't know the program details yet," he says.
But he adds that "when this became law, we started seeing extreme interest at Edmunds.com. There were hundreds of thousands of hits in our 'Cash for Clunkers' page." He says that by the end of July, it is likely that a lot of people who had been on the fence about whether to buy a car will pull the trigger because of the program.
"Our forecast [today] will have taken that into account, and that could mean 100,000 additional units [from Cash for Clunkers trade in deals]. In this slower economy, that makes a big difference in selling rates and numbers."