The U.S. auto industry has found the cure for COVID-19 sales blues: 0% interest for 84 months. In March, the U.S. Federal Reserve, the nation’s central bank, cut interest rates to 0-0.25% from 1-1.25% as part of the effort to spur investment and boost consumer spending. The auto industry followed with seven-year, zero-percent financing on new cars, and that has drawn buyers to showrooms despite continued economic uncertainty during the pandemic. “That got a lot of people back into the market quickly because it was too good a deal,” Charlie Chesbrough, senior economist at Cox Automotive, an Atlanta-based company known for a range of products including Kelley Blue Book, Dealer.com and Autotrader, told Newsweek. Newsweek subscription offers > “We’re pleasantly surprised how the market came back,” he said. “It’s consumers – not fleet buyers – that are lifting the market back from what we saw in April.” Sales have rebounded strongly since spring, when the economy shut down as part of the effort to limit spread of the virus. April’s sales were down 53% from 2019 and the lowest since the 2008 recession caused by the collapse of the subprime housing market. At that pace, 2020’s sales of new cars… Read full this story
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