Anyone Out There Still Buying A Car--Or Truck?
Talk about getting ugly. Two thirds of the way through June and it's clear $4 gas has spooked the public out of buying a new car, truck, or SUV (mainly trucks and SUVs). In fact, things are so bad, we could see monthly auto sales drop to their lowest level since 1992.
If $3.50 a gallon was the tipping point that pushed people away from big rigs, $4 appears to be the breaking point. Buyers are not just worried about fuel economy, they're wondering about the economy as a whole. Why commit to a 3, 5, or 6 year car payment if you aren't sure where your finances may be in a few years.
For dealers, the screeching halt in sales comes at a terrible time. Summer is traditionally when these guys make their big profits. Not this year. As one dealer told me recently, "this is the worst I've seen it in many many years." Compounding the problem is the fact many dealers were/are still heavy with more SUVs and trucks than they want. Gas has gone up so fast, so quickly dealers who were light on big rigs are struggling to unload even their light inventories.
The question now is when we'll see things bottom out? If they continue sliding into July and August, we could see more than a few dealers pushed to the edge. And before you start cheering their struggles by thinking the dealers will crack and offer even greater deals, remember there's a limit to how much they will deal.
Summer is when we usually see big sales, people spending Saturday's walking showrooms, and buyers salivating at the thought of that first long drive in a new car. But this summer, there's little excitement in showrooms and those hot little rides are sitting cold.
Questions? Comments? BehindTheWheel@cnbc.com