October 1, 2015
Eli Segall
Vegas Inc.

Las Vegas’ economy is on the mend, but with foreclosures, depleted wages, shabby finances and other issues still bogging things down, it’s far from fully healthy.

And yet, more and more people are driving around town in shiny new cars.

Read Full Article

Las Vegas’ economy is on the mend, but with foreclosures, depleted wages, shabby finances and other issues still bogging things down, it’s far from fully healthy.

And yet, more and more people are driving around town in shiny new cars.

Southern Nevadans are gobbling up vehicles amid a nationwide auto-lending boom. Business is showing some signs of slowing, but sales have roared amid cheap borrowing costs; easier financing, including for buyers with lousy credit; a hot market on Wall Street for auto-loan-backed securities; and a belief that the once-battered economy is on stable footing.

Jim Marsh Kia, Mitsubishi and Suzuki on west Centennial Parkway, Tuesday Sept. 29, 2015. 

Drivers spent about $4.2 billion at Clark County car and auto-parts dealers in the year ending June 30, up 74 percent from fiscal 2010, according to Nevada Department of Taxation data. This year’s total was the highest since 2006.

“It’s been a pretty good run,” said longtime valley auto-dealer Jim Marsh, owner of Jim Marsh Kia Mitsubishi in northwest Las Vegas.

The buying binge has helped fill government coffers with tax dollars and given a much-needed jolt to the valley’s economy. But it’s raised fears that consumers again are taking on too much debt, as they did during the housing boom.

In the short term, consumer spending boosts the economy, but if it’s fueled by borrowed money and not by higher income levels, “it could be problematic down the road,” RCG Economics founder John Restrepo said.

Still, buyers feel optimistic. The valley’s unemployment rate has been cut in half since the depths of the recession, and the mass layoffs that rocked Las Vegas after the housing bubble burst have all but stopped.

Moreover, borrowing costs will remain low after the Federal Reserve’s decision last month to keep interest rates rock-bottom, where the central bank has held them since 2008 to spur economic growth.

“That all just continues to help us,” said Greg Heinrich, owner of Fairway Chevrolet, Fairway Buick GMC, Henderson Chevrolet and Pahrump Valley Auto Plaza. His new-car sales are up 8 percent year-over-year.