Cash for clunkers stimulates business
In some ways, the government's cash for clunkers plan, which encourages people to trade in old cars for newer fuel-efficient ones, also serves as a sort of stimulus plan. Sally Herships explores how the plan contributes to different industries.
Wrecked cars are piled up in a scrapyard (Theo Heimann/AFP/Getty Images)
More on Auto Industry, Fed. Budget/Govt. Spending
TEXT OF STORY
Bill Radke: General Motors CEO Fritz Henderson holds a news conference this morning in Detroit. He's expected to announce the company is officially out of bankruptcy today -- that was fast and financed by the government. He'll also describe the company's plan to someday make money again.
The federal government is also helping automakers with a new so-called cash for clunkers law -- the one that gives you an incentive to trade in your old car for something more fuel efficient. So do car dealers actually think this law will help? Reporter Sally Herships wanted to know.
Sally Herships: Brian Benstock runs a Honda dealership in New York. He gives a thumbs down to the the government's bailout of GM.
Brian Benstock: They didn't save a job, they didn't sell a car, they didn't save a dealer, they didn't save GM.
But he gives a thumbs up to the new Cash for Clunkers plan. Hundreds of dealers have closed over the last 18 months. Benstock sees this plan is a kind of stimulus for the entire industry.
Benstock: Because dealers are spending additional money for advertising, dealers are getting direct mail campaigns prepared, we're making arrangements with the salvage companies to take these other cars from us.
But not everyone's convinced Cash for Clunkers will be a runaway success.
Cliff Banks works for Wards Dealer Business, a magazine for car dealers:
Cliff Banks: One of the questions that some experts have and some dealers have is whether the customers driving the clunkers will be able to get financed by the banks.
Like so much of the rest of the economy, whether Cash for Clunkers works will depend on whether lenders can get on board.
In New York, I'm Sally Herships for Marketplace.
Comments
Comment | Refresh
From utica, NY, 07/13/2009
If your car doesn't qualify for a voucher, you can get a tax deduction if you donate your car to charity. Just got to http://www.cars4charities.org for details.
From oak park, CA, 07/13/2009
I beleive this new legislation is a big win for consumers who is ready to buy a new car with fuel efficient models
Jim henry
www.cashforclunkersfacts.info
http://www.cashforclunkersfacts.info
07/10/2009
This program is too restrictive. I wanted to trade my 1992 Acura in on a new Honda Fit, but the rules say I get too high mileage. Stupid rulemakers!
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