Planet 9

This week, President Obama signed the “cash for clunkers” bill. So let’s talk about the impact this will have on auto sales this year. In case the basics of this bill are foreign to you, it's essentially a cash incentive. The goal is to motivate us to turn in an older vehicle (that has to then be destroyed) and purchase a new one. The government will provide a voucher worth up to $4,500 to help pay for the new set of wheels. And, you have to buy a new vehicle that’s more fuel efficient than the older one you’re turning in.

How will this affect automotive sales trends?

Obviously, there have been a lot of estimates on how many more auto sales this type of government program will create. To those hoping the automotive industry challenges facing so many can be put to rest, this legislation is one source of optimism. But, it can only go so far.

One thing to realize is that the funding for this bill was decreased to $1 billion dollars, down from a reported $4 billion in its earlier version. Given the current details of the cash for clunkers bill and the dynamics of the car market right now, we know the bill can only fund roughly 200,000 additional sales. While this newly-signed bill won’t make or break the year for any auto manufacturer, it’s a good sign of commitment to help stimulate sales and hopefully add to rebuilding consumer confidence.

While sales of new cars or trucks are down across the globe, many countries in Western Europe implemented similar legislation earlier this year (aka "scrappage programs"). Between January and May 2009, roughly 500,000 additional passenger vehicles sold due to cash for clunkers programs in various European countries (here's a recent Polk press release on this). By the time 2009 closes, it’s expected that more than 1.3 million additional sales in that part of the globe will occur.

This is only one piece of a larger economic reform plan to get the U.S. economy back on its feet. Selling cars is one part of that formula. Will it be the single biggest deal benefitting our industry right now? No. But at a local level, it’ll drive traffic into the dealerships...and maybe give a few dealers some much needed cash flow now versus later. Those looking to get a deal on a new car or truck would be smart to see if they qualify...and take the money while it's still available.





More...

I stopped in to talk trade for the 1998 Volks Beetle I have so we can get a new car for the wife but I was told the car didn't qualify due to the great gas mileage I was getting...

Guess I'm out of the running.... but here is some basic qualifications:

1) Car must be in running condition

2) Car must have current and past insurance for the last year

3) Car must be registered to you in the past year

4) Car must be deemed a gas-guzzler....

__________________
www.wheeldynamics.com Porsche Wheel Sales
www.fastforwardwheels.com Our Refinishing Section
www.fastforwardperformance.com Service

The whole program is

__________________
Kevin
2007 Cayman S........SOLD.

Sorry guys but this is "social engineering" at it's worst. Additionally this bull**** takes our tax dollars and redistributes them to the general public, whether they pay taxes or not.

__________________
Gil Frank
2008 Cayman S Guards Red, PASM, Sport Chrono, Sport Seats w/painted seat backs, Sport Exhaust, Sport Shifter, Fire Extinguisher, Bi-xenons, Clear Bra

Yep, I see your point, if your statement is correct then why in New Cars and not other programs such as lower gas-prices off-set by the Govt. to encourage travel or programs designed to boost spending.... Guess it's all about moving out those old wrecks, but I do agree that $4,500 is a ton to offer.

-Eli

__________________
www.wheeldynamics.com Porsche Wheel Sales
www.fastforwardwheels.com Our Refinishing Section
www.fastforwardperformance.com Service

Lets not forget that all those that turned in their junk cars between July 1 and July 27th very likely did not get their $4,500 from Uncle Sam. They got what the dealer offered them for their junk. Then on July 27th, the dealerships got the $4,500. Do you think the original car owner will ever see that money (or the difference between what the dealer offered them and the $4,500)? Not.....
Now the program is pennyless?

Typical government program where those who are designed to benefit...never really do.

And they may fund it AGAIN......our government has lost its mind!

__________________
Kevin
2007 Cayman S........SOLD.

Your statement has bugged me since I first read it yesterday; the notion of something being wrong with spending tax dollars in a particular way. In this case, in a way that bothers you.

So, to clarify Congress' authority comes from the Constitution. Article 1, Section 8 - The Taxing and Spending Clause. The Federal Government is authorized to spend for the general welfare.

That's the "general public" you refer to.

__________________
Cayman S – A Six Cylinder Symphony

I will add that I dont think anyone who does not pay taxes could possible benefit from the Cash for Clunkers program. You have to earn money to be able to pay for your new car. If you earn money, you are paying taxes, somewhere! Still does not make me like this program....

__________________
Kevin
2007 Cayman S........SOLD.

Sorry yellow bird but i have to agree with Gilfrank.OUR government does not have a blank check from us.There primary purpose is to provide a safe infastucture and to nationally defend us from outside threats.Not set up handouts to a few or to all for that matter, with money collected from those of us that pay them.

__________________

This sounds great, but it is still taking money from one segment of society for the betterment of another segment. That to me is a distribution of wealth. Since when should I be called to help someone else buy a new car? How about other industries? Are we going to subsidize those? The only reason this is going on is because of the huge stake the unions now have in the outcome. Also, has anyone thought about what this is going to do to auto sales long term? You think maybe a lot of these buyers are some that were planning to buy next year? There is no real market gain here.

You may be in agreement with THIS program but wait until it starts to take a huge chunk out of your paycheck. Let's see what your tune will be then.

I have to admit that I haven't read any part of our Constitution in a long, long time, but I don't think it was the intent of the Founding Fathers to provide their own private transportation to the general public. Nor do I think that providing privately owned transportation is part of our general welfare, or inalienable right. General welfare should include national security, international trade, and the few other things that the States cannot provide.

There are so many things wrong with this program that my old head starts to spin when I start trying to list them; and quite honestly it is not my intent to vent on this forum and p**s people off about what I think is wrong in Washington.

Kevin: for the most part you are right about being able to pay for cars and therefore paying taxes. But if you lived in Florida, Texas, Arizona, California, etc, you would find a lot of people (not only illegal aliens) that live on a totally cash basis and are perfectly capable of walking into the nearest Government Motors dealership and plopping $10,000 cash on the table to go along with the rebate to buy the cars our government wants them to buy. You don't see any rebates on our P cars, I'll bet.

BTW, I'm still considering driving up to Asheville for P car service.

Gil

__________________
Gil Frank
2008 Cayman S Guards Red, PASM, Sport Chrono, Sport Seats w/painted seat backs, Sport Exhaust, Sport Shifter, Fire Extinguisher, Bi-xenons, Clear Bra

Gi Frank: I need to ask a question, are you driving to Asheville just to get your Porsche serviced or are you also going to sample the twisty North Carolina mountain roads. ?? THought I would ask. Ed

When, and if, it happens it will be for both, but will test the twists at Roebling next month.

__________________
Gil Frank
2008 Cayman S Guards Red, PASM, Sport Chrono, Sport Seats w/painted seat backs, Sport Exhaust, Sport Shifter, Fire Extinguisher, Bi-xenons, Clear Bra