2024 has begun in an interesting fashion. Americans seem to be generally skeptical about the economy and their own financial well-being even though data reflects that the economy is actually quite robust. Consumers are spending briskly, which typically suggests optimism, not retrenchment. Inflation has tempered. Unemployment has been below 4% for 24 straight months, the longest such stretch since the 1960s. Despite these gains, many feel their long-term financial security is vulnerable to wide-ranging social and political threats, especially during this election year.
Some metrics reflect that consumer sentiment about the economy may be starting to improve. According to the University of Michigan monthly review, consumer sentiment recently posted the biggest two-month increase since 1991. Yet it remains about 20% lower than during the robust economy of early 2020, just before the COVID-19 pandemic started.
As lenders in the automotive market, this time of year is usually quite lucrative as buyers are in the market looking for deals. However, high interest rates and vehicle prices have kept many consumers on the sidelines. The overall average auto loan interest rate was 7.03% for new cars and 11.35% for used cars in 2023’s third quarter, according to Experian. The average transaction price for a new vehicle in December was $48,759, according to Kelley Blue Book.
