TrueCar Hands Out Mid-Year Predictions for Auto Market

Tuesday, a new day brought yet another detailed report from on the auto industry in the United States. Many of TrueCar’s releases on auto trends focus on the sale of specific brands, or month-to-month changes, but with this report, the consumer analyst firm is taking the long view and predicting what will happen in the second half of this year from the vantage point of mid-July.

Some of what TrueCar is predicting is comforting to the new car buyer: that includes an across-the-board estimate of an additional 5% in incentive spending from auto makers. Keeping on top of current sales, cash givebacks and rebates is one way to get a new car for less. Other elements of TrueCar’s oracular statement regard consumer sentiment – with gas prices likely to stay lower than they were at the beginning of the year, TrueCar predicts more sales of SUVs and trucks, though as we have previously mentioned, mpg is going to be a very significant flash point in total sale volume for any make and model. Customers as well as consumer report analysts are looking closely at Herculean efforts by car makers and governments to raise average mpg up to 40 or more over the next few decades.

TrueCar also looks at predicted prosperity for key brands, saying it’s likely that as Japan rebounds from tragedy, makers like Toyota will recoup some market share. Volkswagen is predicted to do well: with a U.S. plant now cranking out new Passats and other vehicles, the company’s flagship designs are likely to sell well over Q2 and Q3 of 2011.

Another prediction has to do with the auto lending environment: TrueCar is pointing out what many analysts have already contended, that over the long term, lenders will be relaxing their previously draconian rules on the “subprime” market. This used to mean anyone with a credit score under 700, then 660, and now, maybe down to something like 640. Carriers of a 660-640 score might still see some closed doors, but as lenders re-evaluate in the “new normal” of high unemployment, asset loss and reduced income for many U.S. families, they are likely to be more open to those who have just marginally lower credit, along with solid income and assets. That’s good news for borrowers, with one caveat: those who are going to sign “lower credit car loans” will have to make sure that lenders aren’t just using a lower credit score to mark up costs. Look at your approved car loan carefully to make sure that it is a good deal for you.