Car Sales Predictors of Recession?

On the news every night we hear about the housing crisis and how many people are losing their homes. More and more people are being foreclosed on every month, but it isn’t just the housing industry that we need to worry about.

It seems that the problems that realtors and mortgage companies have run into is now spreading to dealerships and auto loan companies as well. Maryland auto dealers have reported that they have sold less cars and trucks in the month of August than they did the year before, in fact it was as much as a 5% decline in sales, which is a lot for just one state. Plus, their year to-date sales are down 4.4% over the previous year as well.

Now, the housing market is still worse off than the auto loan industry, but these figures could be a warning light of recession according to experts. They say that car sales weaknesses are simply a signal to other businesses that retail sales are down and so are auto loans.

They say that over the next few months they will get a better picture of how things are going to play out, for as more and more auto loan companies start reporting losses and less car sales are coming in, these are a small part of a much bigger picture that is yet to come. They are finding that their big ticket items are still selling – expensive cars are still selling well, it is – as usual – a case of the rich getting richer and the poor getting poorer.

 

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