big economic headlines scream about a better jobs
picture, one-time bonuses and a ginormous rally on Wall
Street. All good things that could keep driving car
untold stories of economic anxiety cloud the picture,
Zolynsky, 29, received a $1,000 one-time bonus from
AT&T in late December. A little more than a week
later, he was laid off. AT&T put out a press release
about the bonuses but isnít disclosing how many
workers lost jobs.
who lives in Royal Oak, Mich., worked as an installer
for U-Verse for about two years. He graduated in 2012
from Central Michigan University with a bachelor of
applied arts degree, said he has had a few leads
relating to customer service.
he remains optimistic enough to do a little dreaming
about cars and trucks. Zolynsky was eager to see the new
2019 Chevy Silverado when visiting the Detroit auto show
this month with his wife, Marina, who works as a nurse
practitioner, and their 14-month-old daughter Montana.
lease on a 2016 Silverado and her lease on a 2017 Dodge
Journey end next year. Theyíll just have to see what
happens between now and then, they say.
being patient," he said. "Itís not freak-out
to buy a car often boils down to having the extra cash,
the credit and the job security to feel comfortable
enough to make a deal.
itís a mixed economic bag, where some consumers are
doing very, very well and others remain hopeful that the
economic recovery hangs on long enough to grab them on
much news is good, businesses, including major
retailers, continue to restructure and let go of some
employees, all of which could influence car sales going
will not provide total numbers or locations of its job
cuts, according to company spokesman Marty Richter.
said itís adding people in "many parts of our
business that are experiencing higher customer
demand." But "there are some areas where
demand for our legacy services continues to decline, and
weíre adjusting our workforce in some of those
Culver, president of Communications Workers of America
Local 4009, said 245 union members in Michigan lost
their jobs in early January. Nationwide, she said, the
CWA said more than 1,600 AT&T employees were laid
would have been an easier pill to swallow with bonuses,
if nobody lost their jobs," Culver said.
good news for the auto industry is that many consumers
are cashing paychecks with the U.S. jobless rate at 4.1
percent in December. And many lower-paid U.S. workers
are expected to see higher wages in 2018.
Michigan, for example, JP Morgan Chase said wages will
go up for more than 860 eligible employees. The
increased minimum hourly pay rate will be either $15 an
hour or $16.50 an hour, based on location. These Chase
employees had been paid $12 an hour.
Fifth Third Bank, PNC and others plan to increase their
minimum wage to $15 an hour. Thatís higher than
Michiganís minimum wage of $9.25 an hour ó which
took effect Jan. 1.
cash bonuses of $1,000 or more were announced by many
employers following the passage of the federal tax bill
in December. Companies handing out bonus money include
PNC Financial Services, Comerica, Citizens Financial
Group, Comcast, Bank of America and Fifth Third Bank.
Chrysler Automobiles announced plans to hand out
one-time $2,000 bonus checks to about 60,000 U.S.
sales ó while expected to pull back from last yearís
levels ó arenít expected to tank in 2018, thanks to
the overall strong jobs picture.
Cox Automotive is projecting that 16.7 million new cars
and light trucks will be sold in the U.S. in 2018. Thatís
down from 17.1 million vehicles sold last year.
Audet, 44, who lives in Macomb Township, said after
driving a Dodge Journey for nine years and 200,000
miles, he decided to get a 2018 Dodge Ram and bought one
leasing the pickup, which had a sticker price of about
$50,000, for $325 a month. He had hoped to get an
advertised deal of around $120 a month ó but he didnít
qualify for a lease loyalty program, a military discount
or other incentives.
who works as a manager in engineering at FCAís U.S.
headquarters in Auburn Hills, said he was happy to hear
Fiat Chrysler CEO Sergio Marchionne say at this yearís
auto show press preview that he has no intention of
selling off the company in pieces.
doing great," Audet said. "Iím feeling
some consumers with less job security and weaker credit
may feel more compelled to buy a used car, instead of
is tightening at the same time interest rates are going
up," Jonathon Smoke, chief economist for Cox
Automotive, said in an interview at Cobo Center during
press preview days at the Detroit auto show.
subprime borrower ó defined as someone with a credit
score below 600 ó taking out a new car loan was
looking at an average rate of 15.91 percent in October
2016. But a year later, the average rate had climbed
nearly a full percentage point to 16.84 percent, Smoke
a five-year, $15,000 car loan, the monthly payment for
the subprime borrower would be about $7 a month higher
and around $371 a month at 16.84 percent.
subprime borrowers can no longer get car loans as credit
auto financing has remained strong, according to data
from Experian. But the origination of new car loans for
subprime borrowers hit a record low, according to
Experianís data through the third quarter.
said he would expect more consumers with weaker credit
to turn toward newer used cars in the next few years to
hold down their monthly payments. Some might need to
save up more for a down payment, as well.
consumers often focus on the monthly payment and just
take out a longer car loan when rates climb higher. But
the length of loan terms ó averaging around 69 months
ó has somewhat plateaued, so extending that loan even
longer to lower the monthly payment may not be an option
as banks tighten credit, Cox Automotive experts said.
car loan rates still exist, even though the Federal
Reserve raised short-term interest rates three times in
2017. Another three rate hikes are expected for 2018 and
possibly two more hikes in 2019, Smoke said.
the average five-year new car loan rate is 4.49 percent
now, compared with 4.35 percent one year ago, according
credit unions and banks are even advertising rates at
1.75 percent or so. But again, the best car loan rates
go to customers with the best credit scores.
Krebs, senior analyst at Autotrader, said affordability
continues to be a challenge for many people, in part
because wages have only begun rising for many households
following the recession.
who borrowed money by tapping into variable rate loans
will now face higher rates on those loans as the Fed
raises rates. Payments will go up on credit card debt
and home equity loans. Many families, Krebs said, will
continue to focus on what they can afford for a monthly
payment when shopping for a car.
people feel about their finances, of course, will
continue to greatly influence how they spend any extra
cash from wage gains or even one-time bonuses.
Dawkins, 32, said heíll probably use his $2,000 bonus
from FCA toward custom wheels and tires for racing his
car at Lapeer International Dragway in the spring.
who works as an electrician at Sterling Stamping Plant
for Fiat Chrysler, said he feels very secure about his
job, especially given the automakerís investment in
the Sterling Heights plant.
bought a white 2018 Dodge Charger, which has a 6.4-liter
Hemi V8 engine, in May. Its sticker price was about
$41,000. And he pays about $600 a month ó a loan
payment thatís roughly twice what some friends pay.
technically just didnít care. I wasnít hurting. So I
got it," said Dawkins, who lives in Detroit.