In a recent Bloomberg article, a top Honda exec pontificates about what is driving the US car market. The answer? Cheap, long-dated automotive credit.

It’s not because the replacement cycle was extended and even halted for millions of Americans. It’s not because we currently have a strong economy with six straight years of job growth. And it’s certainly not because the merchandise is appealing and dealership employees are performing their jobs at high levels.

Nope! It’s none of that. It’s only because of cheap credit—says the man from Honda.

The article does a nice job of reminding us what happened the last time cheap automotive credit drove sales. But does a miserable job at providing context and expanding on the cheap credit situation.

Used Cars 101 tells us to write the best paper we can. But, we all know the standards slip during an easy credit environment. Is cheap credit back? Absolutely. Is that good or bad? It depends.

The reality is this, the FED sets the interest rate, and the FED’s policy is to be as upfront with their intentions as possible. We know that the FED is going to remain at zero, or near zero for a long time. We’ve known this for several years.

Tom Webb, Manheim’s chief economist was, as usual, the voice of reason. He said the current easy credit situation “has longer to run, and we have already paid the price of admission. So we might as well stay to the end. You just keep your eyes on the exit door.” His statement mirrors my thoughts exactly.

If you are a used car manager, you don’t need to stop purchasing used cars and spend all of your time watching Bloomberg or CNBC. All you need to do is pay attention for a few minutes every time the FED reports (they are meeting 8 times this year) click here for the Fed calendar. On the second day, they release a statement to the press and Bloomberg and CNBC pounce like a starving dog on a bone. Within a few minutes of TV watching, you will know if and when the FED is going to raise rates.

Until then, one should proceed with confidence knowing that the low credit bandwagon is going to keep rolling.