Big incentives, 0 percent interest, cheap leases and easy lending all helped create the auto sales bubble that topped 17 million vehicles twice in the decade before the industry collapsed.
Now, without all that easy money -- and a seasonally adjusted sales rate last month of only 13.1 million -- it may take an awfully long time for sales to get anywhere near 16 million again, much less 17 million.
I'm reminded of that because this newsletter goes out on Oct. 19. That's the anniversary of Black Monday, the day the stock market crashed in 1987. All told, it took 13 long years, to 1999, for U.S. light-vehicle sales to beat the record of 16 million units set in 1986. Forecasters today don't think it will take that long to get back above 16 million -- seven years, from 16.1 million in 2007, the last time it happened, to an estimated 16.3 million in 2014, according to J.D. Power and Associates. Getting back above 17 million will take longer.
Easier auto financing will help, but so far in this recovery, auto lenders are sticking to a more cautious script.