New-vehicle titling drops off in August

Registrations down 6.8% from 2012

New-vehicle registrations in Arkansas dropped 6.8 percent in August to 9,072, according to Cross-Sell of Lexington, Ky., which provides analysis for the auto industry.

It was the fourth time this year that the number of registrations fell when compared with the same month in 2012.

The decline in registrations is not likely to continue, but it’s apparent registrations aren’t improving at the 18 percent to 20 percent rate of some recent months, Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock, said Friday.

For the first eight months of the year, registrations totaled 67,713, about 6 percent above the 63,641 registrations through August last year.

Nationally, new-vehicle sales jumped 15 percent to 1.5 million in August, the highest level in more than six years. Honda, Toyota, Ford, Nissan, Chrysler and General Motors all posted double-digit gains over last August.

Sales in August ran at an annual rate of 16.1 million cars and trucks nationally, a pace not seen since November of 2007, a month before the start of the recession.

“Even though we’re returning to pre-recession levels, there is still some pent up demand out there,” Pakko said.

Generally, dealers are having a difficult time keeping some popular vehicles in stock, said Dennis Jungmeyer, president of the Arkansas Automobile Dealers Association. Those include crossover sport utility vehicles and lightweight trucks.

“It’s catchup for some dealers,” Jungmeyer said. “And now they’re running into model changeovers, to 2014s. They’ll wind down some models in anticipation of some new product lines.”

The average age of vehicles on the country’s roads is now more than 11 years, a Toyota executive told The Associated Press on Thursday. Typically, the average age of cars on the road is about 7 years, Jungmeyer said.

“They are predicting another 12 to 24 months before that pent-up demand is satisfied,” Jungmeyer said.

The sales of expensive new vehicles are becoming a bigger chunk of household debt load, Pakko said.

Some dealerships are financing high-price new vehicles for up to 108 months or nine years for some pickups.

“Typically a utility vehicle like that, a pickup truck, is going to have a longer life span so it make sense to finance it over a longer term,” Pakko said.

There were 12,101 used vehicles registered in Arkansas last month, down 13.2 percent from August last year. An additional 18,924 used vehicles were titled through private-party sales, down about 20 percent from August last year.

Unlike most states, the number of titles in Arkansas doesn’t match vehicle sales each month. That is because Arkansas auto buyers are allowed up to 30 days after purchasing vehicles to register them. So many August registrations were primarily for sales in July.

Business, Pages 31 on 09/28/2013

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