Shoppers returned to car lots to buy in 2010, a sign of economic optimism.
That optimism has continued with sales for many brands far outpacing the growth seen last year, after a dreadful 2008 and 2009.
But data released last month show not all automotive news in Georgia is good. Georgia had the fourth-highest rate of delinquency on car loans in the country in the fourth quarter of 2010, according to credit reporting agency TransUnion.
Sales of new vehicles are substantially better, but even as some consumers gain confidence in their personal finances, or see now as a time to get good deals, others remain financially stressed.
It’s a mixed picture that in some ways encapsulates the broader Georgia economy, said Dorsey Farr, a partner and economist with French Wolf & Farr, a Buckhead-based investment management firm.
Manufacturing has improved and jobs are being created. But Georgia’s dependence on housing and the lagging recovery in the housing market has exacerbated many of the state’s problems, Farr said.
And the percentage of joblessness in Georgia remains higher than the national average.
“We share the national economy’s problems and then some,” Farr said.
Metro Atlanta’s unemployment rate improved to 10.2 percent in February, down from 10.4 percent the month before and 10.7 percent in February 2010, according to the Georgia Department of Labor.
Georgia car loan delinquency rates, those at least 60 days past due, peaked at 1.17 percent in fourth quarter 2008, according to TransUnion, but have generally been trending towards the better.
In fourth quarter 2010, 60 days past dues stood at 0.87 percent. Though it’s an improvement since the worst of the Great Recession, it was the second straight quarter in which more Georgians were late with their payments.
Only Louisiana, Mississippi and Alabama had higher delinquency rates.
Nationally, delinquencies stood at 0.59 percent, up from 0.58 percent in third quarter and 0.53 percent in second quarter, TransUnion said.
To be certain, new sales data from March and for the year indicate buyers are flocking to dealers as though they’re addicted to the new car smell.
Buying a car is a deferrable decision, Farr said, and the spike in sales shows stronger consumer sentiment.
According to Autodata Corp., new car sales for March in the United States were up 16.9 percent over last year, while national sales so far this year are up more than 20 percent.
Jennifer Chupp, Internet sales manager at Subaru of Gwinnett in Duluth, said her brand weathered the storm better than most, and sales have continued to climb this year. New car buys are up 10 percent at her dealership over this time in 2010.
“People are starting to spend again,” she said. Used sales of all makes at her dealership also are strong, particularly for fuel efficient models, as fuel prices continue to climb.
New car buyers at her dealership tend to have excellent credit—better than 750 on average—a trend reflected in national data on new sales.
According to a Atlanta-based Equifax, the average credit score of the new car buyer remains elevated compared to mid-2000s boom years.
Paul Taylor, chief economist for the National Automobile Dealers Association, said declining real estate prices aren’t helpful to new car sales, and Georgia continues to see declines in real estate prices.
But fewer used cars on the market has helped to stimulate new car purchases as older cars have kept their values. NADA expects 12.9 million new car sales nationally in 2011, up from 11.5 million in 2010.
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