Paying You $3500 To Buy A New Car
EmailABC’s Jonathan Karl from Washington:
Firing executives and cutting costs won’t be enough to save the US automobile industry if people don’t start buying cars. Industry sources say March sales figures are abysmal — down 40 percent over last March, an annual rate of less than 9 million vehicles.
There is now a big push to jump start auto sales — and help the environment in the process — by giving people who junk old cars (9 years or older) a $3500 voucher to buy a new, energy efficient car. It’s called the fleet modernization program. Germany did it earlier this year and was the only country in Europe to see an increase in auto sales. German auto sales were up 21 percent in February (even GM and Ford saw sales increase last year in Germany).
This would be another form of bailout for the auto industry, putting money in the hands of consumers instead of the companies, and, unlike anything done so far, it would address the problem of falling demand.
Auto industry advocates are pushing hard for this, but have been bickering over the details. The UAW wants to the vouchers to be good for just American made cars. The US companies, which have plants in Canada and Mexico, are pushing for North American made cars. Others are saying any restriction would violate WTO rules. US-made Japanese cars would be eligible, but not the Prius, which is manufactured in Japan.
You will be hearing a lot about this in the coming weeks.
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This is a good idea. It should be for cars made in the United States.
Posted by: amoreena | March 30, 2009, 3:55 pm 3:55 pm
American cars are junk and the auto industry has had years to fix itself up, but they were lazy. I wouldn’t give up my Honda for anything!
Posted by: joesmom | March 30, 2009, 3:59 pm 3:59 pm
I read Obama’s remarks made today concerning the auto industry. He mentioned other idea’s to jump start sales were being debated, but anything decided would be retroactive to today. We have a ’97 Riviera. I might be able to wrench it away from my husband for an incentive like that.
Posted by: justahousewife | March 30, 2009, 4:04 pm 4:04 pm
Today’s actions make me consider the extreme possibility that this was all about not moving to green vehicles as fast as the President wanted.
Posted by: William | March 30, 2009, 4:04 pm 4:04 pm
We loved our Buick Riviera and it has over 200,000 miles on it and is still going. No huge repairs, either. I also bought a Honda CRV in ’86. Also a nice car, but hard on backs and posteriors on long trips. Let’s stop bashing America and American made products. Just not cool anymore if it ever was.
Posted by: justahousewife | March 30, 2009, 4:13 pm 4:13 pm
3500 bucks towards a new car… hmmm, lets see….
cars cost much more today than they did years ago, because of the revamping the auto industry insisted on… making them more fancy, more sporty and just more elite looking.
on top of that, most people are out of a job, can’t get a loan and could not afford one more bill added to the already existing bills.
Yea, I will run out right now and buy a new expensive car, that I can’t afford, and hopefully will get a loan for it, even though I do not have a job and my unemployment might just cover it.
NOT.
Posted by: lm | March 30, 2009, 4:13 pm 4:13 pm
Sorry! That Honda is a 2006. Shouldn’t be trying to work and blog at once. But, I work on my dime – commission only – so I’m not cheating the boss.
Posted by: justahousewife | March 30, 2009, 4:15 pm 4:15 pm
Let’s drop the drama. Most people do have jobs. The unemployment rate is up about where it was in the ’70′s and ’80′s recessions. Maybe less. I was there and sometimes looking for jobs. We managed. People will manage now, too. Credit is available for people who are responsible risks.
Posted by: justahousewife | March 30, 2009, 4:25 pm 4:25 pm
I’m a little confused, how can a community organizer run a big commercial enterprise like a car manufacturer? Isn’t this the same government who, when it took over a whorehouse in Nevada, couldn’t make a profit. Look at how well they’ve managed social security and medicare, both of which are scheduled for bankruptcy in 10 years. Yep, I trust Obama to make good corporate decisions. By the way, how big of a bonus will Obama get from the GM shareholders this year?
Posted by: jim | March 30, 2009, 4:32 pm 4:32 pm
Better read the fine print in that proposal or they’ll sneak a clause written in that only cars with Obama/Pepsi paint schemes qualify for the rebate. But again, a new proposal for behavior…if you buy a new car-get a tax credit if you have 8 kids get a tax break, if your kids are at one school or another-get a tax break if you have one green eye and one blue-get a tax break, if you buy a house-get a tax break, if you give to charity-get a tax break. Why not just reduce the taxes all around allowing more money in everyones pocket and if they want to buy something they will, stop screwing around with all this insanity and if a company goes kaput, it goes kaput.
Geez, before we know it we will all go to the same building marked Govco and get prostate exams while having the oil changed in our cars.
Posted by: david | March 30, 2009, 4:54 pm 4:54 pm
How about the government just stop taxing us to death with massive inflationary spending and just leave us the hell alone?
Posted by: Max | March 30, 2009, 5:29 pm 5:29 pm
Well..maybe it’s worth a shot to try to pump up demand for new cars and trucks , but who’s paying for it ? Uncle Sam ? Of this I am ABSOLUTELY certain . At some point in the not very distant future….the ONLY buyer for US Government securities will be the FEDERAL RESERVE ..and that will mean we are printing worthless cash at a 100% clip to buy government debt that will NEVER be repaid . All the incentives in the world won’t stop that horrible reality . We will be forced to adopt a currency of our creditors choice and we will all lose our economic freedom in the end . With that prospect … who really CARES about a new car ?
Folks our economic freedom is at stake and it’s being whittled away one government spending program at a time .
Posted by: Jeff | March 30, 2009, 5:37 pm 5:37 pm
FYI: Justahousewife : About 90% of folks with mortgages are current . The 10% who aren’t along with some Wall Street brewed derivstives have helped bring the Financial System to the brink . My point is…is doesn’t matter that the majority of Americans are employed . We SHOULD really worry that there is an 8% ( and rising ) jobless rate Our entire economy hinges on nothing exceeding a marginal change , whether it be delinquent mortgages , delinquent credit card payments , retail sales , joblessness , layoffs , auto sales , you name it . With almost EVERYTHING going haywire at the same time we should REALLY be worried . Folks like youselves who seem to have a handle on their finances should hunker down and fight to hold onto every single dollar coming into the household . If you don’t , you surely WILL later wish you had .
Posted by: Jeff | March 30, 2009, 5:51 pm 5:51 pm
Jeff, you made some good points. But, I need to replace that old Buick anyway. I am relieved to hear the warranties will be safe, but you’re right. All this govt spending is dangerous.
BTW, I think we can already deduct sales tax anyway, on everything. That change came into law a few years ago. Nothing new there.
Posted by: justahousewife | March 30, 2009, 6:44 pm 6:44 pm
Just : Thanks for your kind response . The gov guarantee for warranties was announced for a reason today , I think the Administration now WANTS both GM and Chrysler to file for Chapter 11 , by making the warranty guarantee the Government is “holding up the dead man’s bones ” so that it appears there is some life there …in other words no one would normally buy a car from a car company in bankruptcy , the guarantee gets around that problem for now , and atleast allows the auto companies alittle more breathing room while in Chapter 11 . Just my opinion though .
:)
Posted by: Jeff | March 30, 2009, 10:45 pm 10:45 pm
Someone should check the “competitveness globally” for the auto industry – and all manufacturing arenas where a union will not adhere to commong standards of “sharing the profits” but not tearing down the Company’s abiity to compete. Cost of production is too high –Production rates are too low. When two lathes are ready to run – union won’t permit the second to operate –someone should speak out —not trmendous effort to put the costs in perspective globally.
Posted by: WILLIAM J CLEMONS | March 31, 2009, 2:19 pm 2:19 pm
My 1996 Buick (13 years old)is running like a champ without mayor problems since I bought it new. The idea that American cars are no good doesn’t hold anymore.
Cars are the mayor purchase of the average person, besides buying a home.
Therefore BUY AMERICAN CARS and HELP the ECONOMY. Again, this fade about
bad American cars DOESN’T HOLD ANYMORE, because they are GOOD!
Posted by: Tony Sala | March 31, 2009, 2:26 pm 2:26 pm
No one will be buying cars, homes or anything else for that matter if someone doesn’t take a long hard look at the banks and credit card companies.
They are ruining the credit of consumers for no apparent reason. If staying within a credit limit, paying on time and paying above minimum each month means the consumer is punished, then what hope is there and where will our credit scores end up?
The government is coming down hard on the failing auto industry, it needs to apply the same pressure to banks and protect the consumer. Spending will not resume in the current economic climate if the very institutions that want us to spend are crushing our credit.
Posted by: Lindsey | March 31, 2009, 2:32 pm 2:32 pm
Not a good idea,Need to close wallstreet
and work off credit and give each american 1 million dollars on a plasic card and no more cash,coins,that’s also
saving alot of trees and the planet too.
Posted by: robert | March 31, 2009, 2:57 pm 2:57 pm
I’ll go for that people who say american cars are junk are just brain washed. I own a 92 chevy truck (240,000 miles) a 93 mercury (100,000 miles), 89 Ford high top van (100,000 miles) and a 2001 VOLVO (last year before ford bought them -120,000 miles) The crappy VOLVO has broken down and cost me more in repairs then the other three combined, and then some.My American cars rarely need repairs. Sure the fit and finish is not up to the volvo but the volvo is a luxury car class BUT these cars are not an investment they are transportation.
AS for the Obamo bashing get a life people he is the smartest president that we have elected in 100years You people couldn’t get into the schools and run the Harvard law review if you paid and bribed everyone…I am not a liberal nor a democrat.I don’t agree with everything he says or does BUT he is our President and as a loyal American I will support him.
If the $3500 dollar credit becomes law I will buy a car from my fellow American,neighbor and UAW member (whats wrong this making a living wage). If you like foreign cars so much you’ll love their country,MOVE….
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good concept to sale easily your cars and also to make your people happy by saving money.
thanks
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