Arizona republican., 1921-03-20
PAYMENT FIGURE IN HALF
 OF ALL SALES

H between IOfLy-INc dAd ltAIJ PSA cent of all cars being sold today are being marketed on some deferred pay ment system.
 This is the first absolutely author itative answer to a question that has puzzled many sales executives Of the automobile industry and which has interested leaders in many other lines of activity. including banks which ad- vance money on securities issued py the time payment companies, and also manufacturers and dealers in such things as pianos. talking machines, and furniture Heretofore estimates on the percentage of automobiles sold on time payment basis have ranged all the way from 50 per cent to. 90 per cent, these percentages being merely guesses made by men more or less familiar with actual conditions in restricted localities. The present figure of between 45 per cent and 50 per cent Or to be exact, 46.7 per cent, is made available by the General Motors Acceptance Corporation, the statistical division of which has just completed tabulating the replies to questionnaire which was sent to all it's dealers, numbering we'll over 10000 in all parts of the United States. Over 10 per cent of the dealers to whom the blanks were sent made complete reports, showing a total of 149, ,136 cars sold. of which 79407 were sold for cash, and 69,729 were sold 'son time" or 46.7 per cent of the total number.
 The period for which the question: naire asked information was that from August l, 1919 to July 31, 1920, and therefore includes the latter half of summer selling season, the following fall, winter and spring seasons, and the first half of the succeeding summer. selling season. It is therefore, a com prehensive sweep of sales conditions over full yearly cycle of the industry.
 In this report the General Motors dealers gave separate figures on sales to city-dwellers and to farmers. and in each class listed the number of sales of new and used passenger cars and new and used trucks for cash and on deferred payments. It is interest," ing to note that of the sales to farm CTS. 3S,216 were sold on time the cash sales numbering 18,326
 As was to have been expected, city dwellers paid cash more frequently than the farmers, only 44.9 per cent of cars sold to city y-dwellers being through credit arrangements, there being 61,0S1 cash sales out of a total of 110,920. 4o.6 per cent of the new passenger cars reported sold to city, dwellers were sold on credit while 53
 
 city-dwellers and thus placed in the service of mercantile houses were partly financed. It is interesting to note in this connection, that only 51.2 per cent of the used trucks were sold on time, and 51.9 per cent of the used passenger cars were sold to city dwell CTS on GMAC finance plans.
 Very much the same relative position is shown by the figures representing sales to farmers of new and used passenger cars and new and used trucks. 4S.2 per cent of new passenger ~ears delivered to farmers being sold on deferred payments and 5S.1 per cent of the used passenger cars being similarly disposed of, while 59.9 per cent of the new trucks are sold on time to farmers. and 56.7 per cent of the used trucks. This figure of 59.9 per cent for new trucks is the high est percentage in the whole list.
 The dealers also reported the max imum amount of time they allowed on deferred payment sales to city dwell CTS and farmers, the average being 9.a months to city dwellers and III to farmers. The average down payment z on all deferred payment sales reported was 40.3 per cent of the cash selling price.
 Presentation of these figures at this time is particularly valuable since many automobile executives, including both sales managers and production experts. are endeavoring to forecast the 1921 market Realizing the inn portance of the selling of automobiles on credit, many of these executives have scrutinized the possibility of ex- tending the use of this method of sell ing. However there is a general mis- conception as to the amount of sucI business that is being done. many considering that there is not much field for further development along this line. The Acceptance Corpora tion's figures, however, demonstrate that there is room for further growth
 This is particularly evident when i is considered that cash sales of mus ical instruments such as pianos ant phonographs represent only from to per cent of the total number. Ob viously. the automobile, which occu piee an essential position in the econ onnic life of the country, being pro wider of exceedingly efficient privat transportation for persons and goods is much more worthy of credit thai are luxuries such as pianos. It is however. doubtful if the automobil will ever be sold on credit as exten sively as musical instruments are to day Economic experts estimate tha about 70 per cent or tue lnuuStTy production always will be sold fo cash, since motor vehicles necessaril must be bought by persons of some what advanced financial standing. I other words, the class is of such
 calibre that about one quarter of tn automobile purchasers composing should be able to pay cash for thei vehicles at all times. It would there fore seem that through the more inten sive use of deferred payment facilitie the automobile industry may be abl to increase it's sales approximately 2
 per cent, bringing the present figur H of 46.7 per cent up to about 70 pc Scent or 75 per cent
 That being the case, it becomes in
 portant to scrutinize time paymeI buyer as a class in order to determir in what direction to push selling et forts looking towards the disposal
 more automobiles on credit. FortuT ately, this also is made possible by u
 statistical division of the General No
 tors Acceptance corporation which h.
 issued an analysis of it's clients simu
 taneously with it's report on the pc
 centages of cars sold for cash and
 deferred payments. This analysis e,
 amines every important particular
 the standing of the purchaser of aut mobiles on credit accorded by the co \ poration between October l. 1919 aI
 March 13, 1920. This examination
 based along the lines of a similar an
 lysis, issued last spring covering |