Ever since a debt crisis toppled the already-precarious auto sector into undeniable crisis there’s been a running debate about when US car sales would “return to normal.” By now though, even the most ardent bulls seem to have accepted that 2007’s 16m number will be out of reach for at least several more years. So, how will we know when we’ve hit the new normal? According to Edmunds, at least one statistic roared back to 2006 levels last month: the percentage of sales financed at zero percent.
In March, more than 22 percent of financed new cars were purchased with zero-percent finance deals. Last March the total was just 13 percent. The prior high was 21 percent in July 2006.
Toyota was the king of zero, as 71 percent of its March sales were zero-percent deals, according to Edmund’s numbers (bye-bye armor-plated resale values). Mazda and Mercury followed at 58 and 32 percent each. Though Toyota clearly had its finger on the scale, aggressively pushing finance deals to make up for volume lost during its recall scandal, it’s not a fantastic sign for the industry at large that zero-percent financing deals were at 2006 levels, and yet failed to make sales numbers look anything like March 2006. Credit may be loosening, but it doesn’t appear that there are millions of units of pent-up demand just waiting for the right credit deal. It’s looking like it might be time to rethink “normal” again.