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NADA 2013: Auto Industry in Full Recovery Mode

By | Published February 20, 2013

We attend the NADA (National Auto Dealers Association) Convention and Expo every year. This is where over 20,000 car dealers and allied industry people flock together to network and sell their wares to the dealers. This convention can be a good barometer of the overall car industry. So how do we know the industry is back on the upswing, and how does this benefit you?

NADA pic 1

The NADA convention contains every possible type of allied industry related to car buying, from lenders, to insurers, warranty companies, car makers, companies that sell car washes, dealer lot lighting, and monogram products. There's also, marketing services, customer management software, you could stock your brand new dealership by attending this show. We usually see all the big names like Cars.com, AutoTrader, eBay Motors, GM, Ford, Chrysler, Toyota and more. It's a who's who of the car industry.

The NADA convention contains every possible type of allied industry related to car buying, from lenders, to insurers, warranty companies, car makers, companies that sell car washes, dealer lot lighting, and monogram products. There's also, marketing services, customer management software, you could stock your brand new dealership by attending this show. We usually see all the big names like Cars.com, AutoTrader, eBay Motors, GM, Ford, Chrysler, Toyota and more. It's a who's who of the car industry.

Starting in 2008 when the worldwide financial crisis began, we noticed probably before many others that something was wrong in the auto business. The lenders were dropping like flies, as buyers defaulted in record numbers on mortgages and car loans. This proved to be the first litmus test and a warning sign of the trouble that was about to beset the world. There were many high profile crash and burns, with many companies going out of business, or simply getting out of online auto financing and direct lending. Companies like Auto Credit Finders, First Again, E-Loan, and LendingTree came to a halt, laying off hundreds of employees, and shuttering affiliate programs. Some finance sites were taken over later on by finance lead generators. GM, Ford and Chrysler all stopped writing vehicle leases; the whole industry was trapped in a standstill.

NADA pic 2

In 2009 we saw the NADA show starting to dwindle. Gone were many of the finance companies of old. Other lenders were merging or changing their names to hide their shady past, and the paper prime lending market screeched to a halt, because the money which investors pour into lenders to lend out in the form of auto loans dried up, seizing the worldwide markets.

We started to notice much lower attendance at NADA, the crowds were thin, and there were fewer booths, and some no shows at reserved booths. Then in 2010 in Orlando we were shocked to see the show was almost reduced by half the normal size. I feared that NADA was about to go the way of COMDEX, the once dominant computer show from 1980's that fizzled out in later years. Attendance at NADA in 2010 dropped to maybe 15,000, but I suspect it was even less, as that was just official registrations. The aisles at the expo were empty. GM, who received a lot of bad press for fiscal irresponsibility and was a no show in 2010. Their booths were empty. That's how bad it was folks. There were only 32 aisles at NADAs 2010 Expo, as opposed to well over 40 aisles at previous conventions, but many booths were abandoned facades of no shows, stuffed with landscaping trees and classic car collections so that no one would notice the checkerboard of companies that bailed on NADA. We had a hard time finding lenders there, because many had faltered. We found only 8 possible finance related companies, and not all of them were lenders.

NADA pic 3

Fast forward now to 2013, the auto industry adapted and improved inventory management, increased profitability and most brands enjoyed 2012 sales that were the best since 2008. Now in 2013 back in Orlando, we see that the NADA Expo had 45 aisles, which is a 40% increase over 2010, and there were no facade booths that I noticed. It was a much more jovial atmosphere, and parties were in full swing. The show dropped Monday from the calendar, so attendees have one less night at their hotels. The show was much more crowded and we heard there were 21,000 attendees this time. This time we counted 17 finance companies, double what we saw in 2010.

What does this mean for us car buyers?

Certainly we can see the money is flowing once again, deals are flowing once again, dealers are getting more profitable as they save money in numerous areas, including the super bright and energy efficient LED lot lighting for sale that we saw everywhere at this year's show. Lenders are testing the murky car loan waters again. Money has been poured into finance companies and mergers and new brand names have evolved. Interest rates are nice and low and with lending money flowing once more. This means it should be easier for us to get car loans, and at more favorable terms such as lower APR. With sales back to their 2008 levels, dealers can no longer cry on your shoulder how bad things are, and you once again have alternatives to financing your car new car purchase, so use this to your advantage when negotiating.

Author Jeff Ostroff

About The Author: Jeff Ostroff is a consumer advocate, Founding Editor and CEO of CarBuyingTips.com overseeing a team of expert authors. For over 17 years, he's been the recognized authority on car buying, leasing, used cars and financing. He developed sophisticated spreadsheet tools to help consumers negotiate on a level playing field. He is a widely sought out guru, cited by the press for his expertise in savvy car buying and preventing consumer scams. Jeff has been quoted in CNN, Bloomberg, MSNBC, Wall street Journal, Consumer Reports, NY Times, Reader's Digest, and many live call in radio shows. He has covered the automotive space since 1997. Jeff also has extensive experience and expertise in selling used cars for clients on eBay and Craigslist. Connect with Jeff via Email, Twitter or on Google+.

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