profitable

What are we going to do after the Cash For Clunkers program ends?  Well, recent history has shown us that there will be a dip in automobile sales (that is pretty obvious) but people will still need wheels and for a lot of people who may have their rides break down or decide that they want a newer model they will probably:

1.  Buy a new car anyways if it is something they want.  People who have money and are living off of their investments may have enough cash so that it doesn’t matter immediately if their portfolio doesn’t recover.  They will spend though probably a little more prudently when they want a new car no matter what.

2.  Get another car but will go for a used car because they don’t want to spend a lot of money.  A lot of people,especially parents, are opting to get their kids of driving age used cars instead of new ones simply because they don’t have the cash to make monthly payments for twelve to sixty months.  Neither do their kids.  Even though a lot of cars have been removed from the road we have plenty of older cars out there with good gas mileage that people are trying to sell.

3.  Do without and try to rely on (gasp) public transportation.  This is the default position for a lot of people who are out of work right now.  If they don’t have a need for going to a job interview that is too far away or they can take the bus or subway they will wait and get their car repaired or a new one after they are working again.  For some people this may be a very long time.  Bus passes and rail cards are a lot cheaper than making car payments.  They may even rely on car pooling for grocery shopping with kind neighbors if they have to go to the store.

Remember when two years ago we had GM offering the employee discounts?  Car sales did very well for awhile and then once the discounts stopped, car sales dropped.  The same scenario is going to happen for September and the next couple of months.  By the way, the last quarter of the year tends to be a slow time for car sales with the exceptions being Christmas and New Year’s weekends.  I don’t think that we will see large pops of sales this year but who knows how people may get excited over new models as they are released.

The biggest thing to add life after the Cash For Clunkers program ends to car sales and the economy will be for the government to make it easier for people to get back to work.  If people are working they have no problems signing up for 3 to 5 year car loans so they can get their dream ride.  When people are unemployed, they are often looking to sell off their extra vehicles for cash themselves to pay their bills.

Supposedly the last quarter of the year – and that starts in a week or two – will start to show some signs of recovery.  I don’ think we will have any meaningful recovery until more of America gets employed again.  It is about the economy and money. 

Oh and for all the bruhaha about people thinking that GM will be selling a car under $4000 similar to Tata Motors, please note that they are selling cars at that price outside the United States.  I don’t think even with robots that they can make a roadworthy vehicle for $4000 sale price.  Hmmm, that may be wrong because bicycles are roadworthy and they cost less than a few thousand dollars, except for the high end racing or touring bikes.  No engine and they aren’t freeway safe though.

Today is the options expiration day for August and I am not expecting to see any big changes in the stock market, so you can see more life after the car program continue in other sectors and some pops in balance sheets for the next quarter in the auto industry.

Hope everybody has a great weekend and do what you can to stay out of debt or at the very least pay down your balances.

Aug 22 2009

Also, please  don’t quite go anywhere yet.  Having some tax issues or tax questions?  Any problems with trying to make it through the financial Depression we are in that is making you depressed?  Please read on.

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I have experience in international business, small businesses, partnerships, multi-state tax returns (they can get complicated) and anything else you can probably think of.

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Practical Money Making-Surviving Recession, Layoffs, Credit Problems, Generating Passive Income Streams, Working Full Time or Part Time and Retirement

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Part of all the proceeds from the sales of that book go to Rett Syndrome research. One girl is born with Rett Syndrome worldwide every fifteen minutes. My daughter Arianna has Rett.  Thanks for your support.

Kim Isaac Greenblatt

Life After Cash For Clunkers

Tags: Business

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