The net result is that even though auto sales are rising, finance managers can expect to continue to struggle to get all but the most highly qualified buyers into a loan or lease.
"It's going to be slow climb out of this hole we've dug ourselves into," said Sudarshan Mhatre, senior analyst at PricewaterhouseCoopers.
Other economists at a recent industry conference here, including Ford chief economist Ellen Hughes-Cromwick and Mark Vitner, managing director and senior economist for Wells Fargo Securities, took a similarly cautious view.
Economic indicators are so mixed that sometimes even the same economic indicator cuts both ways.
For example, U.S. households are saving more and paying down debt, but that also makes less money available to buy cars. That's the "paradox of thrift," said William Strauss, senior economist and economic advisor for the Chicago Federal Reserve.
"Consumers seem to have gotten this new religion with regard to savings," he said in a May 11 presentation to the Automotive Economic Forecast & Financial Forum here.
According to the Bureau of Economic Analysis, personal savings as a percent of disposable personal income grew from 1.7 percent in 2007 to 2.7 percent in 2008 and to 4.3 percent in 2009.
"That's good in the long run, not so good [for auto sales] in the short run," Strauss said.
The two-day forum was hosted by the Cherokee Automotive Group of Cary, N.C., publishers of Auto Remarketing and SubPrime Auto Finance News.
Slow, "methodical" growth in auto sales is the most likely scenario, Mhatre said.
Positive economic factors for auto sales include interest rates that are low by historical standards; the return of incentives; overall economic growth, since auto sales tend to increase in step with gross domestic product; and improved credit availability compared with recent lows, he said.
Negatives include sustained high unemployment, a sluggish real estate market, manufacturer efforts to increase transaction prices, and lower scrappage rates as consumers keep their cars longer, Mhatre said.
Bernard Swiecki, senior project manager for the Automotive Analysis Group at the Center for Automotive Research, said U.S. auto sales don't recover to their previous highs within his 10-year forecast horizon.
"The heyday of 17-plus million units a year, I think, is a long ways off from now," he said.
"This is a gradual recovery. It is not going to snap back into place. This is one reason the automotive industry is going to take it in the chin like it has."