UsedCarNews.com
February 5, 2018
Cox Experts Upbeat About Used Market
Photo by Jeffrey Bellant LOOKING GOOD: Cox Automotive Senior Economist Charlie Chesbrough details the ways the economy can help the used-car market, as well as some of the risks, such an uncertainity about the tax code. By Jeffrey Bellant
DETROIT – Oicials from Cox Automotive expressed great optimism for 2018 at a presentation at the North American International Auto Show last month. “All the parts of the U.S. economy seem to be moving in the right direction now,” Senior Economist Charlie Chesbrough said. “So we’re very optimistic on what 2018 is looking at.” Tax reform has also boosted consumers’ conidence while also adding extra money to their paychecks as tax withholdings change this month.
“There’s no bubble here,” Chesbrough said. Increased lending has boosted auto sales with $1.1 trillion in lending in 2017. There has also been a lower rate of auto defaults compared to other debt. “We know that car buyers are going to pay their bills,’ Chesbrough said. Employment conditions are good and the economy has had 87 consecutive months of job growth, Chesbrough said. But there are some risks. The Federal Reserve is anxious to
raise interest rates over the concern of inlation. Chesbrough said the question is whether the Federal Reserve can manage this without the economy tipping into a recession. “That’s certainly one of the risks,” he said. The other risk is that the longterm efect of tax reform is still hazy because taxpayers won’t see the full efect until next year. Another issue is any long-term government shutdown. Jonathan Smoke, Cox Chief Economist, said he doesn’t see any signal that consumers are backing of of
buying vehicles. “We do think that 2018 – no question – continues to create an environment where a consumer wants to buy,” Smoke said. He said new-car inventories are inally starting to come down after 17.1 million new sales in 2017 and as manufacturers plan to reduce production of cars that “are no longer in favor.” Smoke, however, said all these new-car sales shouldn’t obscure the importance of the used-car market. Continued on page 3
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