Cash for Clunkers

[Nickdfresh]

Why does the auto industry need saving..?

....

Because not everyone wants to be $8-and-hour trailer trash, like you!

It's also in our absolute national security interests to maintain the ability and expertise of large scale industrial production domestically, especially since as fuel prices inevitably go up - the law of diminishing returns will begin to destroy fuel intensive trade where goods are made by low wage workers, and transported half-way around the world, and most production will again be local...

[standin]

Hmm, ya know Nick I was just wondering about something close to that this morning.....

Why would production jobs be sent to China instead say Mexico. There is far less transportation costs involved with Mexico production. And in a way it would be keeping it in the compound so to speak.

[sadaist]

You guys are both correct with the $200 markup and the $4500 markup. If you just go in to buy a new Chevy, pay sticker price and anything else the dealer charges, the dealership will make a tidy little profit off of you. However, if you do your homework and are a bit thick skinned...that's where haggling comes in. Employees typically pay cost +10 for cars & parts. That means whatever the dealer pays for the item, employees can purchase for only 10% more. In many cases this is only $100-$200. A knowledgeable buyer can get a dealer down to the employee price on a vehicle.

Sometimes they'll let last years model go for nothing more than the $200 commission to the sales team because they have quotas to fill or they won't get all the new models they would like to carry. So timing, knowledge, and a bit of grinding will get you the low end of the scale. Just going in and buying a car at sticker gets you the high end.

In the end it doesn't really matter to most dealerships if they make money selling the cars. Their bread & butter comes from service and the parts department. Last time I actually did a study (although it was just two dealerships) parts department was over 75% of the dealerships income base. Remember, they don't just sell to customers who walk in. They also sell parts when you get your car repaired there. They also sell factory parts to many other repair centers throughout the city or county and typically have two full time parts drivers delivering them all day. The markup on factory parts is similar to retail stores, around 100-150%. They pay $5 for a plug, then sell it for $10-$12. Not much? Wait until you need a transmission or engine.

Some of the larger dealerships also have their own financing. Even more incentive to get you into that new vehicle and not make any money right off the bat. They'll more than make it up in the next five years on your finance charges & interest rates. I won't even get in to vehicle leasing.

Selling the cars is not where profits are made on the dealership side.

[Big Train]

Why does the auto industry need saving..?

Because you are told they do.

What is different now than 2 years ago..?

Nothing.

You are being set up.

The government takes our money from taxes and the investment profit they make on that lines in thier pockets then they take the base (our money) and use that to bail out the auto industry then they ask us to bail out the auto industry to save the auto industry. To build back our wasted money.

Start Bailing! someone you don't know and could give a fukk about you is not really sinking their 1 and 0's are are being cooked.

I pay taxes on everything I buy, and that is after I paid taxes on that very income/.THen you take a 40K hit on your market folio and it takes 10 years to get that back.

No one else is loosing anything at all, your car clunker scam is paying thier profits.

THEY loose nothing. The little guy gains little and that is all he understands.

Spent money is gone.

Man, where do you start with this.

They need saving because I don't want to carry the states of Michigan and Kentucky on the federal back because it can't provide jobs for itself.

Let's review:

1. I was FOR them going under and starting over. Check all the old threads.

2. Once the government decided to get into the game via the bailout (of which I disagreed), the prudent move was to get them stable and turn them around. As an investor, if the money is already sunk, it's about getting it back out. That means doing what has to be done to get things moving. Cash for Clunkers is genius in that respect.

3. Cash for Clunkers gets the objectives and sets the incentives to get cars moving off lots. Ford is the best positioned as it has the right cars and didn't take bailout cash. GM and Chrysler are getting SOME positive benefit, but they are now building for the future based off the current demand in the market Cash for Clunkers is building.

Last I checked, you aren't the only one paying taxes. OUR money is sunk in the car companies. OUR money is at risk. Not taking the right action to get OUR money back is stupid.

[Nickdfresh]

...

In the end it doesn't really matter to most dealerships if they make money selling the cars. Their bread & butter comes from service and the parts department....

True. They also make their money selling used cars as there is vastly more profit (and commission) on a used vehicle than a new one. And don't forget the classic F&I thing, where you get sold all of the add-ons such as "rustproofing" and the dealership makes bank on percentages for loans, warranties, etc...

Some of the larger dealerships also have their own financing. Even more incentive to get you into that new vehicle and not make any money right off the bat. They'll more than make it up in the next five years on your finance charges & interest rates. I won't even get in to vehicle leasing.

Selling the cars is not where profits are made on the dealership side.

True to an extent, but owners can get big yearly bonuses from manufacturers if they sell a certain quota of cars which can be big money (for them).

[Nickdfresh]

...
Last I checked, you aren't the only one paying taxes. OUR money is sunk in the car companies. OUR money is at risk. Not taking the right action to get OUR money back is stupid.

Not too mention that people are still paying state sales taxes on all of the price, including the $3500/4500 rebate portion...

[OldNo.7]

I heard this morning that only 42% of the cars sold under this program were from US auto makers. Uhhh that sucks.

[sadaist]

I heard this morning that only 42% of the cars sold under this program were from US auto makers. Uhhh that sucks.

Yes. Word coming in today is that 6 of 10 of the cars purchased were Toyota, Hyundai, Honda. Not sure how this is helping Michigan. Typical of how the government fucks up everything it touches. Bailout & assume ownership of automakers. Attempt to subsidize newly owned auto maker company. Instead end up subsidizing competitors.

[thome]

And the 4200 $ will be taxed as income on your taxes..? Yes / No?

If they don't reach 2 Billion in sales by friday they are going to stop the promotion. On the news earlier.

Save the America, BUY A CAR!

You got till friday. Then America is dead ...2 Billion?? that is what, like a pack of smokes to us rite? Then we, will give you some other stupid idea to get your money.,

2 Billion that should pay for one bridge's repair in oswego bumfukk rite..?

Or Chryslers yearly CEO and Board, pay income..rite?

[Blackflag]

I heard this morning that only 42% of the cars sold under this program were from US auto makers. Uhhh that sucks.

It's no surprise. Like I said earlier, the fuel economy requirements they put in the law was biased towards the foreign automakers. I think Ford and GM only makes one car each that meets the 28mpg requirement for $4500...and Chrysler none.

I know it's the Big 3's fault for not making small cars... but still - WTF? My tax dollars are a subsidy to Toyota now? WTF?

[btw - I took one of these deals. ]

[sadaist]

I know it's the Big 3's fault for not making small cars...

Have you been to a grocery store, shopping mall, strip mall, Target, or elementary school parking lot in the last 10 years? Mostly BIG vehicles. Not because small ones weren't available, but because that's what people chose to buy. That's what they wanted.

[Nickdfresh]

Yes. Word coming in today is that 6 of 10 of the cars purchased were Toyota, Hyundai, Honda. Not sure how this is helping Michigan. Typical of how the government fucks up everything it touches. Bailout & assume ownership of automakers. Attempt to subsidize newly owned auto maker company. Instead end up subsidizing competitors.

All of the above have factories in the US, just like Ford and GM have ones in Mexico...

[Nickdfresh]

It's no surprise. Like I said earlier, the fuel economy requirements they put in the law was biased towards the foreign automakers. I think Ford and GM only makes one car each that meets the 28mpg requirement for $4500...and Chrysler none.

Not true at all. Both Ford and GM have the models and Ford actually made money, unlike just about all of the foreign BASED manufacturers....

The Focus, Fusion, Fiesta (if available yet), and four cylinder version of the Escape could all be bought with clunkers...

I know it's the Big 3's fault for not making small cars... but still - WTF? My tax dollars are a subsidy to Toyota now? WTF?

[btw - I took one of these deals. ]

It's the Big Threes fault for not bringing some of the really good cars they've been making in Europe and Asia here to the US in favor of selling SUVs and pickups for higher profit margins...

[Blackflag]

Not true at all. Both Ford and GM have the models and Ford actually made money, unlike just about all of the foreign BASED manufacturers....

The Focus, Fusion, Fiesta (if available yet), and four cylinder version of the Escape could all be bought with clunkers...

The fusion doesn't get 28mpg, the Fiesta isn't sold here, and I was talking about cars, not the Escape. So if you want to buy a car and get $4500, Ford offers the Focus - that's it. GM has only one, also. Some piece of shit made by daewoo that I don't remember the name of.

It's the Big Threes fault for not bringing some of the really good cars they've been making in Europe and Asia here to the US in favor of selling SUVs and pickups for higher profit margins...

First, irrelevant to the topic. Either the legislation was designed to help the companies in this market or it wasn't.

Second, you have to stop harping about a $20k Diesel subcompact and comparing it to the small car market in the U.S. Give it up. The Fiesta is interesting, but it's not a silver bullet.

[WACF]

All of the above have factories in the US, just like Ford and GM have ones in Mexico...

Exactly...

Also...dealerships, regardless of what brand they sell will benefit also.