Today's papers carry the news that car sales are weakening. I'm not
surprised. Careful empirical observation has shown that the average age
of the car on the road in Northern California is about 45 days.
The check cashing place on my corner -- where you can get an advance
on next week's paycheck -- is the most vibrant business in the
admittedly low-rent city I live in. Actually, that's why I live here,
the rent is low.
But even the cars that pull in nightly to the Cash Advance store are
very new, probably two or three years old on average. Of course the car
payments may be the reason people are not able to make it to the next
payday without borrowing at very high rates. But the traffic as people
drive in to pay and to borrow is steady. If the economy sags, as it
obviously is doing, the weekly payments of the vigorish may get harder
and harder to make.
Car sales might sag a bit more.
Gene Coyle
