From the course: Economics for Everyone: Understanding a Recession

Unlock the full course today

Join today to access over 22,400 courses taught by industry experts or purchase this course individually.

Auto sales

Auto sales

From the course: Economics for Everyone: Understanding a Recession

Start my 1-month free trial

Auto sales

- Auto sales are an important part of the economy, but during a recession, very few people want to buy new cars. And new cars are important because those are the ones that count towards economic growth. If you buy or sell a used car, doesn't count, only the new ones do. And when people are worried about their jobs or their income, auto sales tend to fall. One of the ways that companies tried to increase auto sales and incentivize people to buy new cars is by lowering their interest rates, trying to give 0% or some other low teaser rate to get people in the door and buy a car. But the truth is, even if the interest rate is really low, even if it's zero, some people might still not want to take a risk on buying a new car, especially during a recession because they're worried about their job and they're worried about buying necessities and if they already have a used car, they might prefer to just invest in repairing and…

Contents