Where's the "Stimulus" in the Bailout to Get Buyers Back on the Car Lot?
Click：0 Category：loan Author：
Americans have stopped buying cars and who can blame them?
With the stock market crashing and dire predictions of Detroit's bankruptcy, people are just not in the mood. But in all the thunderclouds of verbiage coming out of Washington along with the recently announced bailout, there's one word I'm not hearing: "stimulus package."
What's it going to take to get people buying again? Because, buy they must. No car company -- not even the mighty Toyota or Honda -- can't survive at the current sales numbers. So, what we are really talking about is a bailout of the car industry, not just Detroit.
Consider this: in a "normal" year, about 16 million people buy cars. This year, only about 12.7 million people have gotten new wheels. That means about 3.3 million Americans have postponed a needed trip to the car lot.
What will get those 3.3 million people off the dime? When will they say, "It's safe to go back to the car lot?" That's the part of the bailout that's being ignored. It doesn't make sense to carbuyers yet.
Look, it's one thing for a bunch of politicians and auto execs to reach an agreement. But that's not what it's about. It's all about boots on the ground. Or more to the point, customers on the car lot.
We have already seen a massive bailout of the banking industry where the government merely threw money at failing companies to keep them afloat. Notice how the real estate industry is going gang busters now? Maybe that should tell you something.
The stimulus part of the bailout is not an important part of the concept -- it's the most important part of any plan. If we give the car makers a loan, it won't do much more than put the auto industry on life support for another few months. But if the bailout can include a way to get car buyers on the lot, then the tide will turn.
So what's it going to be? For those of you who are reading this, who have put off getting a new car, what would it take to get you in that new car today? For starters, we have to offer loans that people can qualify for. But what about tax credits? Interest-free loans? How about a government guarantee to honor extended warranties and supply parts and service? Or, this is really wild, how about an amnesty program to forgive the negative equity many consumers are now carrying?
Ever notice how the best advertisement for a restaurant is a line of people waiting for a table? Get the stimulus package in order and 3.3 million people will flood car lots and pump cash back into our economy. Just think how that will look on the 5 o'clock news.