Credit approved for new and used cars gives an indication that the automotive market is picking up.

The monthly Automotive Credit Demand Index, released for the first time by Veda Auto, shows automotive credit inquiries up 7.1 per cent in October from the previous month and 3.9 per cent for used vehicles.

However, demand for used car credit has decreased 19.7 per cent in the past year.

Queensland credit inquiries have dropped 2 per cent in the past year. However, the highest performing state, South Australia, increased inquiries by 6 per cent.

Veda Auto boss David Scognamiglio said it appeared consumers and businesses shifted their credit applications from used cars to new to take advantage of the Federal Government’s stimulus package.

“We would expect to see used vehicle credit demand rise in January 2010, which is consistently the peak month for used vehicle credit demand,” he said.

“Vehicle purchases are a significant economic indicator and this year the interesting question will be whether credit demand for used cars will rebound as strongly in January 2010 as it did in January 2009.”

Scognamiglio said it was too early to tell whether government activity would have a long-lasting impact.

“We can say that the Government’s incentives have had a positive impact on credit demand for the auto sector to date,” he said.

“It will be interesting to see if the activity driven by the stimulus translates into a recovery in the automotive lending and sales environment.

“We will monitor the continued interest rate rises and the effect they will have on consumer demand as we move through the Christmas and New Year period.”

The vedaauto.com data compiled from Veda credit applications, combined with National Vehicle Information System (NVIS) figures from the past three years also shows:

• Consumer auto credit inquiries increased 5.5 per cent in October, with the average credit amount slightly increasing to a record of $21,698.
• Commercial auto credit demand was up 10.4 per cent with the average reaching a record high of $46,166.
• Males account for 62.2 per cent of all vehicle credit demand.
• The 55-to-64 age group experienced the highest growth in auto credit applications, with October up 13.6 per cent on the previous month and up 14.6 per cent on last October.
• Applications for auto credit among motorists aged 18 to 24 declined 15.6 per cent in the past year.

source: Courier Mail