Table 2 Partial Correlation Descriptive Statistics
Mean
Std. Deviation
TOTAL MIDSIZE SUV UNIT SALES
Total Down
Percent Financed
Total Down (%)
Trade in (%)
Type of Sale Cash (%)
Type of Sale Finance (%)
Type of Sale Purchase (%)
Type of Sale Lease (%)
Vehicle Price Less Customer Cash Rebate
Average U.S. Gas Price
Table 2, Partial Correlation Descriptive Statistics shows the results of the initial analysis. With the number of periods being 14, and controlling for gas price this analysis shows that the majority of mid-size SUV vehicles buyers were financing, taking advantage of aggressive incentives on the part of manufacturers. See Figure 1 for an analysis of cash and incentive spending by SUV model.
Notice that the median level of spending is approximately $3,000 per unit for cash and incentives and with the variable entered into the analysis a correlation matrix is produced, and shown in Appendix a: Full Correlation Analysis with Cash & Incentives Included. Cash and Incentives have a.01 level of significance (.847 correlation) with motivating buyers to trade in their vehicles. Gas prices also show statistical significance in influencing cash and incentive effectiveness to in turn influence trade-ins. The bottom line is that the higher and more volatile the gas price, the more buyers rely on leasing, and initially appear to be motivated to trade-in their previous vehicles to qualify for the cash and incentives on chosen vehicles.
References
AutoData Database (2008)- Cash and Incentives Spending Analysis of the SUV Marketplace. Accessed during the week of September 15th with permission from the research provider.
Global Insight Vehicle Database (2008) - Forecasting from the heavy Vehicle Shipment Reports during the week of September 1st with permission...
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