A look back at 2012 and some predictions for 2013

A look back at 2012 and some predictions for 2013

Here are the top auto industry trends for 2012 and top predictions for 2013, as seen by Edmunds.com.

1. Car sales offer certainty in an uncertain economy. That has been more the case nationally than regionally as the Washington area did not suffer as badly from the Great Recession as much of the rest of the country.

2. Subprime sales return. Banks stopped offering subprime auto loans as the recession started in 2008. Then credit gradually started to loosen, and by the third quarter of 2012 credit scores returned to pre-recession levels. Subprime loans now make up about one-fourth of all new car transactions nationally, according to Edmunds.

3. Small and midsize segments dominate the new-car market. Whether because of higher gas prices earlier in the year or more quality offerings in those segments, small and midsize cars saw the biggest year-over-year growth nationally.

The other two national trends – victims of Hurricane Sandy replacing their cars, with Honda and Toyota rebounding from the effects of the 2011 tsunami – had less effect on the Washington area.

Edmunds makes these predictions for the U.S. market in 2013:

1. Lease terminations flood the market. Edmunds projects up to 500,000 more car buyers coming off lease in 2013 than in 2012. That number is in addition to the already substantial pent-up demand.

2. Used-car prices soften. With off-lease vehicles and trade-ins flooding the market, prices are bound to drop. Edmunds sees an average drop of $200 to $300 per used vehicle in 2013.

3. Housing resurgence creates wealth effect. Rising home prices make consumers feel wealthier, which translates into greater consumer confidence to make large purchases such as a new car, says Edmunds.coms chief economist Lacey Plache.

4. Its the year of the truck. Although Washington area consumers dont buy trucks in as large numbers as the rest of the country, new home and office construction will still require trucks. (Has anybody noticed that the entire Washington area seems to be under construction?) GMs forthcoming line of 2014 Chevy and GMC pickups will add to the truck fever.

5. The sales rate will slow. Sales grew about 14 percent this year. Edmunds projects 4 percent growth next year, for total sales of 15 million, a number approaching the pre-recession levels of 2007.