New ABS data released today shows record falls of 37.8 per cent in the value of loan commitments for road vehicles in April.
“These figures reflect the plunge in new car sales that occurred in April but it also demonstrates the tighter credit environment for so many customers looking to purchase a car,” Australian Automotive Dealer Association CEO James Voortman said.
“The industry has experienced two of its worst months on record due to the effects of the pandemic and much of that is low consumer confidence but there is also a more systemic issue with access to credit brought on by the banking royal commission,” said Mr Voortman.
“People who would usually present no concerns to finance companies are getting denied credit to buy cars. We need to get credit flowing in this economy and review our responsible lending laws which have simply gone too far,” he said.
“We are hopeful that sales will pick up in June which is traditionally a strong month, but beyond that it is critical for our industry that credit is freed up to bring customers back to the showrooms,” he said.
New car sales have been falling for 26 months in a row and sales figures in April and May saw some of the biggest declines on record due to the effects of the COVID-19 pandemic.
New car Dealers are located in cities and country towns across Australia, where they employ around 60,000 people and are responsible for more than $55 billion in sales.