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Finance

2006: A look back - A look ahead  
  Winners and losers were prominent in 2006 but pricing and financing remains at the mercy of gas prices.
 Auto
 Personal finance calendar  Personal finance calendar 

Gas prices still the key to autos in '07

For many consumers, 2007 may be the year to score a sweet deal on a car or a truck.

The auto industry will be coming off a year when it could only sell some 16.5 million new cars and trucks, well below the 17 million to 18 million sales that signify a flush year.

Showrooms will be filled with more new and redesigned models than buyers have seen in the past few years, ranging from cute but small economy sedans to revamped full-sized pickups and SUVs.

 The competition for a buyer's attention to these new models will likely mean dealers and manufacturers will be cutting prices and offering incentives on all but the most popular models.

General Motors, Ford and DaimlerChrysler will continue to be under assault from imports -- Toyota in particular -- and will be fighting to stabilize their plummeting market shares.

And in the short term, the Federal Reserve has taken a breather on raising interest rate benchmarks, which means finance rates on new cars should be attractive, even if the manufacturer isn't offering a zero-percent loan on the vehicle you want.

But for the consumer the biggest key to what sort of a year 2007 will be remains the price of gasoline.

 If the autumn descent of prices below $2.50 a gallon lasts throughout the winter and into the spring -- and is not simply a reflection of an election time conspiracy, as some pundits suggest -- the auto industry could get off to a good start.

Sales of new models, especially the more profitable trucks and SUVs, could prompt manufacturers -- and here we're talking primarily about the three in Detroit -- to hold off on offering really deep discounts and incentives.

However if gasoline starts to march back toward its 2006 peak of $3.06 for a gallon of regular, manufacturers will likely start 2007 by offering all manner of financial incentives to move those new vehicles.

Economic turbulence aside, 2007 does promise a lot of new developments that have nothing to do with the art of the deal.

-- Posted: Nov. 1, 2006
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