Evening star., 1941-10-09
InsfaNment Buying
Curbs Drop Sales Of
Many Commodities
Auto Purchases Fall
About 30 Pet; Effect
In Some Stores SLIGHT
By JAMES FREE.

BY JAMES FREE.
Curbs on installment buying, not
yet six weeks old, have caused a
drastic drop in the volume of sales
of a number of important COM
modities, a survey revealed here
today.
Sale of new automobiles has
fallen off 80 per cent or more. with
the increased down payment and
the shorter payment period being
responsible for fully tWo-thirds of
the decrease, according to dealers
here.
Some stores reported radio sales
of as much as 40 per cent.
And sales of vacuum cleaners, re-
frigerators and electrical appliances
are said to have fallen off by 20
to 25 per cent in many establish
mentS.
Some Stores Unaffected.
Not all retail stores have noted
such decreases, and the biggest
changes have occurred in those
stores previously streSsing the fact
that little or no down payments
were required. A few larger stores,
in which credit requirements have
been equal to or tighter than the
new Federal regulations, report no
appreciable decline in sales.
Automobile dealers declared that
the sales slump is attributable main
ly to the new rules calling for down
payment of at least one-third of
total value and completion of all
payments within Is months. For
merly many cars had gone out on
the basis of one-fourth down and
the balance over "a months.
This means that a man must
pay $50 or more a month, in most
cases" dealer in so-called low-cost
automobiles said, "for our cheap
est model now sells for around
$1,000 Before, car could be
financed for S35 a month. A lot
of families can't afford the SIS diff
ference"
Except for a furry of calls for
radios shortly before the new luxury
taxes went into effect the first of
October, the sales pace has been
slowing gradually since September
l, several stores reported. AS in
the case of refrigerators. electrical
appliances and vacuum cleaners, a
down payment Of 20 per cent is
required with the balance in Is
months. The required down pay
ment on furniture is only 10 per
cent.
Supplies on Hand.
supplies of some of these articles
are being curtailed because of diver
sion of scarce metals to defense. but
most dealers said that their sales
slump cannot be explained that way.
We've got the stuff now-al-
though we don't know how much
more we can get or how long we will
have it-and it isn't moving of our
shelves very fast" said one store
operator.
Cash buying appears to be def
n1tely on the increase. "a lot of
customers prefer to pay cash or
make down payments higher than
minimum requirements" said one
sales manager.
Some sales managers declared they
believed the new regulations would
prove to be a boon to many mer-
chants who are now feeling the
Initial pinch. There will be less
trouble with collections and repos-
sessions, they asserted, and lax
credit limitations encouraged manv
persons to buy articles they could
not afford and which they, in some
cases, did not need.
Turnover in Question.
While there appears to be little
doubt that sales of individual COM
modities have been cut by the more
stringent rules, there is some ques-
ton that the total dollar turnover
has been affected considerably. In
certain stores, particularly lust be-
fore the higher taxes became opera
tive the first of this month, there
were indications that customers were
stocking up reserve supplies and
were not overly concerned about
prices.
AS one credit authority explained
AFTER all, the total consumer pur-
chasing power has been trimmed
very little and credit regulations are
still rather mild"
At the Federal Reserve Bank,
which ordered the installment buy
ing restrictions as a means of pre-
venting imitation, officials said there
had not yet been time to evaluate
results of the action on a Nation
wide basis.
The rules were intended. the Off
cials continued, to reduce public de-
nand for certain articles which used
up materials, labor and factory ca
pacity that are needed for defense.
Now, they said, is the time to
tighten the rules and get closer to
this objective