KeyBanc Predicts Resurgence in New-Vehicle Sales

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Washington DC April 16, 2009; The AIADA newsletter reported that the rising demand for used vehicles and loosening of financing will soon translate into increased demand for new-vehicle sales, according to the latest report from KeyBanc.

SubPrime News reports that improving retail auto financing and auto asset-backed securities issuance, along with growing used-vehicle sale volumes and prices, are driving this expected ramp up of demand.

"Dealers have been reporting that retail financing trends have been improving, which is corroborated by CNW Research data showing approval rates for automotive loans are improving at all levels," the KeyBanc report found.

"A recovery in overall vehicle demand is typically first evidenced by an increase in used-vehicle sales and prices," the company highlighted. A recovery in demand also helps used-vehicle prices because it drives up the value of trade-ins.

Based on all its data and experience, KeyBanc is predicting resurgence in new-vehicle sales to take place in the next several months, as long as the market doesn't experience an unexpected shock.