Post-Harvey Sales Spike, but Houston Shows a Frugal Streak | Edmunds

Post-Harvey Sales Spike, but Houston Shows a Frugal Streak

Down Payments Are Up; Monthly Payments Are Down

When Hurricane Harvey's floodwaters receded, Houston-area residents went on a car-buying spree, according to new Edmunds purchase and financing data. New-car sales in Houston spiked 109 percent in the three weeks immediately following the hurricane compared to the three weeks before the storm hit.

And as they bought, Houstonians showed a frugal streak,  putting more money down and paring their monthly payments, Edmunds found.

The average new-car down payment was $4,432 in Houston in September, up 18 percent from August and up 24 percent from September 2016. Additionally, the average monthly payment for a new car in Houston dropped to $571 in September, a 4 percent decline from September 2016 and the lowest average monthly payment in the Houston area since July 2015. 

Those steps lowered the average amount Houston buyers financed in September 2017 to $34,012. That's $827 less than they financed in August and more than $1,800 less than in September 2016, according to Edmunds.

"Car buyers in Houston tend to opt for pricier trucks and SUVs, so it's a positive sign to see buyers putting more down up front," said Jessica Caldwell, Edmunds executive director of industry analysis.

On the sales front, automakers are still grappling to trim excess inventory and make room for 2018 vehicles. Overall incentives have reached record levels, but automakers are still reticent to offer zero-percent financing deals. As was the case in August, only 10 percent of new car loans in September had zero-percent financing, compared to 15 percent of loans in September of 2016.

"Even though automakers are being very aggressive with incentives, because interest rates are still relatively low, zero-percent financing just isn't the big draw that it used to be," Caldwell said. Instead, dealers are more apt to sweeten the deal through discounted leases or by taking cash off the purchase price, especially on 2017 models that are languishing on lots.

More insight into recent auto industry trends can be found in the Edmunds Industry Center.

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