(Photo from foot-slogger, Flickr.com)

The auto sector is experiencing continuing tough economic conditions. The auto industry will have to emerge from the other side of this recession with a new look; a look that will be forever changed. The way autos are made and sold will never be the way it was. In reaction to this, many auto makers like GM and Honda are cutting low margin or poor selling models and lines to better define and strengthen their market positions. GM has killed the Pontiac line, for example. Honda has stopped making their S2000 roadster, and many others will follow suit from auto makers across the globe.

Clearance Sales are not always Deals when it comes to Cars

Normally, retail clearance sales of discontinued items can be great buys. The deep discounts create enough value to justify the purchase. However, cars are a bit more complex in how they fit into the sales model. Automobiles need to retain a residual value, how much they are worth for later resale, to be considered good investments. Discontinued car lines have a difficult time holding their residual market value because of a lack of demand and a lack of replacement parts and available service and warranty options. Once the particular discontinued model is out of the mainstream, very few people are interested in buying an old model. Combine that with the other difficulties in parts and service and you end up with very little value in the market.

Separating the Good Deals from the Bad

The key to determining which discontinued models are the best deals is good solid research. There are several places one can look to find out what the analysts see as the car’s future value. KBB.com, U.S. News’ car ranking site and Edmunds.com are a few good places to find out valuable information on how much the car is worth. These sites give valuable information on quality and reliability which directly affect the car’s residual value. Remember, residual value only matters if the car is going to be re-sold or traded in. If the car will be owned for 10 years or more, the residual value is not much of a factor. The car will not be worth much of a percentage of its original value anyway.

To Re-sell or not to Re-sell

The buyer has to have a plan in place before making the decision to buy a discontinued car model. If the plan is to keep the auto for 8 or 10 years or more, then residual value isn’t a consideration, but warranty and service are. Ask the dealer if the warranty will be honored after the model is discontinued. Also, ask if the warranty can be extended afterward. Many parts are universal on a lot of models, but an important question to ask is whether or not replacement parts will be available 5, 8, or 10 years down the road. If the buyer’s plan is to get a bargain price and then re-sell or trade in the vehicle, residual value comes back into play. No matter what the plan, research plays a key role in providing reliable information the buyer can use to get the best deal possible.

Photo: http://commons.wikimedia.org/

Today it was announced that General Motors will be selling off their inventory of Saturn vehicles. Saturn vehicles will join with the service and rental car lots operated by select dealers. This will enable dealers to slash prices up to 46% off retail price. These Saturn vehicles are brand new, but will be marketed as used because technically the dealers will be considered the first owners.

Many may hesitate to buy

There’s reason to hesitate in buying a Saturn from a generic auto dealer as that GM stated that they will honor existing warranties on these liquidated vehicles. The fact that these cars will be considered used may or may not be a deterrent to prospective buyers. Because the resale value will be very low, GM is losing a lot of money on this deal by paying $ 7000 to dealers on every car. It is said to be part of their reorganization process and that it will pay off in the long run.

What this means for you

I’m a Saturn owner and I love the brand, so I’m pretty excited that I’ll be able to apply for an online installment loan or payday loan to secure funds for my new Saturn. My Saturn is 5 years old and I have yet to have a problem with it. I have been on many long road trips, and with its digital compass that’s viewed on the rear view mirror I have never been lost.

When will this sale happen?

It’s reported that this will occur around January 4, 2010 and up to three months of inventory will be liquidated. That’s roughly 3,500 Saturn’s that bargain hunters will be able to purchase. General Motors is desperate to rid themselves of their Saturn and Pontiac vehicles. General Motors will be left with only Chevy, Buick, and Cadillac for the coming years.

Beginning late this fall, federal rebates will be available for purchasers of high-efficiency household appliances, furnaces, and air-conditioning systems. Earlier this year Congress authorized $300 million for the program as part of the federal economic-stimulus bill. Funds were distributed to states based on numbers of households, but the federal government left the details of the programs up to each state. The states have until Oct. 15 to submit plans for their rebate programs to the Department of Energy.

But even after rebates, home appliances don’t come cheap. A new Energy Star® KitchenAid® 24.9 cu. ft. refrigerator, for instance, retails for about $2500, plus tax and delivery charges. So if you’re planning to purchase appliances, start saving your cash now, or fill out our easy online application to get a personal loan.

What are the rebates supposed to do, again?

The appliance rebate program is similar to the popular “cash for clunkers” program (the Car Allowance Rebate System Act, or CARS), but doesn’t require a trade-in or exchange. The stated goal is to stimulate consumer spending and smarten up energy use. With the CARS program winding down, appliance manufacturers and retailers are hoping the new rebate program will revive slumping sales of refrigerators, washing machines, and dishwashers.

It will be several months before we know what effect the CARS program had on the GDP, but we do know that it created a brief spike in car sales and a slight tailwind for the US economy. It wasn’t enough, however, to keep car sales in the black. After making gains in May and June, car sales fell again in July.

Some say appliance rebates are great

Some say that the American people have become frugal consumers and that the economy would benefit from another spending incentive. Retailers and manufacturers in particular endorse the appliance rebate program.  J.B. Hoyt, director of governmental relations for Whirlpool Corp., recently told The Wall Street Journal that government rebates would be “a good way for the consumer to get back into the marketplace,” adding that “clearly, anything that boosts business is good for us.” Whirlpool was pushing for a rebate program long before the economic-stimulus bill was born.

Appliance manufacturers aren’t the only ones who like the government rebate program. According to someone on bloggingstocks.com, you can like the program even if you’re not a New Deal economist:

Yes, it’s government intervention in the U.S. economy. Yes, it’s a form of socialism: so are billion-dollar subsidies to American farmers. But it will further boost the U.S. economy. And you don’t have to be an economist in FDR’s New Deal administration to know that.

Some say appliance rebates are crazy

Others see the appliance rebate program as just another way to rack up more public debt, without a hope of ever repaying it — a shameful legacy earmarked for future generations. Someone on newsobserver.com had this to say:

Americans are about to be handed more of their great grandchildren’s money so they [can] shop for products for the kitchen and laundry room. Look, if we had even a whimper of a surplus — or even had a dream of one day dropping our deficit I could at least live with this. But we’re bankrupt and just piling on more debt as if money is going out of style.

Given its patent lack of environmental benefits, the CARS program was so popular that green cynics are now proposing things like “Cash for Clunker Homes,” “Cash for Clunker Computers,” “Cash for Clunker TVs,” and “Cash for Clunker Vacations.”

And some say appliance recycling programs are the way to go

In the final analysis no appliance is green

Some states, like New Jersy and Vermont, offer residents small recycling rebates and free pick-up for old appliances. In Michigan, as part of a plan to meet a state-mandated goal of reducing energy consumption, DTE Energy, the state’s largest power company will pay $50 for an old refrigerator or freezer and haul it away for free. The old appliances are recycled for parts used in making computers, cell phones, and steel rebar.

In a Wordpress blog called Cash for Clunker Appliances, Ann Porter explains that appliance recycling programs remove carbon dioxide from the atmosphere much more inexpensively than the CARS program did.  The math may be questionable, but the underlying point may have some validity:

An Appliance recycling plan is far superior to the hijacked CARS program because the car rebates, which run as high as $4,500 per purchase, ultimately cost taxpayers around $160 per ton of carbon dioxide removed from the atmosphere. An appliance recycling rebate between $25 and $50 removes about five tons of carbon dioxide from the atmosphere. According to Elana Schor, that works out to a cost of $10 per ton for the richest refrigerator rebate program — more than 10 times cheaper than “cash for clunkers.”

No more CARS? (Photo: unclesamsauntie.com)

America needs strong, decisive action from its government that will restore consumer faith in the economy. One of the vehicles President Obama had planned to use to help those of us who are hamstrung by the high cost of gasoline was the Cash For Clunkers program, also known as CARS (Car Allowance Rebate System). With it, people would be able to trade in their older gas guzzlers for new, more fuel-efficient vehicles. It would save consumers money and help the environment.

But after about a week, it appears that Cash For Clunkers will be suspended. This is not inspiring news, Mr. Obama. May I please be allowed to have my cash advances and payday loans now? I’ll need that money to make a down payment on a car Cash For Clunkers was supposed to help me afford!

Cash for Clunkers suspended?

Elisabeth Leamy and Mike Callahan report for ABC News that Congress is currently scurrying about like nervous field mice, looking for a way to funnel more money into Cash For Clunkers, which has proven to be more popular than the government had anticipated. The $1 billion set aside for CARS may not be enough.

Really? You didn’t think people would like the program? You didn’t think that people who truly afford these new high mpg vehicles would still overextend themselves with fat monthly payments? It’s what Americans do.

Still running… on empty

White House spokesman Robert Gibbs says Cash For Clunkers isn’t suspended, but “is up and continuing to run.” But cash advances must flow into the program soon, as Congress begins their recess… today!

The original plan for Cash For Clunkers was for it to continue through November 1, 2009 or until the money was gone. However, the government’s estimate was that each participating dealer who be able to complete up to 12 CARS transactions. Yet that estimate has proven to be ridiculously low, as some dealers processed as many as 250 Cash For Clunkers deals within the first few days of the program. That’s more than 20 times above what the government was expecting. Now dealers are rushing to push their apps through before Cash For Clunkers is suspended.

The Department of Transportation says “scrap it”

In fact, they were on the verge of pulling the plug. Cash For Clunkers would’ve been suspended, but the White House stepped in at the last moment to buy some time.

“We are working to assess the situation facing what is obviously an incredibly popular program,” Gibbs said. “Auto dealers and consumers should have confidence that all valid cars transactions that have taken place to date will be honored.”

Yet the CARS Web site – www.cars.gov – showed $779 million remaining. Sounds like creative accounting to me. But the Web site is still running and displays no news about the program being suspended as of this writing. Dealers are still running their Cash For Clunkers commercials, too.

Dealers on the hook

Oh, did I mention the Web portal dealers have to use has been crashing almost constantly? So there’s a backlog of at least 25,000 transactions that dealers have made but the government has not yet approved. What will happen if the government shuts this thing down? Car dealers are in enough of a mess as it is.

“It’s up to the dealership now to get it’s money back, and that’s where the fear lies,” said one dealership owner to ABC News. “Customers are on the road but now we’re on the hook for the rebate.”

In light of this danger, some dealers are requiring that customers sign an agreement where they’ll return their new cars if government funding disappears. There are already plenty of cars that the EPA disqualified at the last second. Happy campers, get ready to pitch your fits!

WWCD (What Will Congress Do?)

Uncle Sam needs cash advances to keep CARS running! (Photo: vi.sualize.us)

Some senators have argued that while it may be possible to procure the cash to keep Cash For Clunkers going, there needs to be tougher standards put into place as to what vehicles will be eligible. In a joint statement, Sens. Dianne Feinstein of California (Dem.) and Susan Collins of Main (Rep.) said the following:

We will insist than any extension of the program requires that the minimum fuel economy improvement for newly purchased vehicles be at least two miles per gallon higher than it is under the enacted clunkers program. It is also important to include lower-income consumers who are disadvantaged under the current program. So, we would also include a voucher for the purchase of fuel-efficient used vehicles.

Cash For Clunkers guidelines (for now)

1. If you own a car from 1984 or later that gets 18 combined highway and city miles per gallon or less, you may qualify for the Cash For Clunkers – if it’s not suspended!
2. If it starts and has been registered and insured within the past year, you may qualify for the Cash For Clunkers – if it’s not suspended!
3. If the new vehicles gets four more miles per gallon than your clunker, you get $3,500 from the government – if Cash For Clunkers isn’t suspended!
4. If the new vehicles gets 10 more miles per gallon than your clunker, you get $4,500 from the government – if Cash For Clunkers isn’t suspended!
5. An SUV, minivan or small pickup only needs an mpg bump of two to five – if Cash For Clunkers isn’t suspended!
6. The new vehicle just cost less than $45,000 – unless Cash For Clunkers is suspended!

I believe I’d still need cash advances or payday loans for the down payment. If I were buying, I’d get those loans right here. Give it a try, won’t you?

Related Video:

Does this qualify as drivable? (Photo: Flickr)

Nevertheless, Americans still appear eager to buy cars they can’t afford. Good work, Cash For Clunkers program 2009!

A clunker of a program

Brent Snavely reports for the Detroit Free Press at http://www.freep.com/article/20090728/BUSINESS06/907280316/1002/NEWS01/ that Cash for Clunkers has increased the overall excitement about car buying, if the crowds in showrooms are any indication. Sure, there are questions about how long this ride will last and whether the program is too complicated for its own good. Plus, it’s uncertain so far just how many new car sales have come from the Cash for Clunkers program 2009.

One of the things we know from the 136-page outline of the plan is that the program will last until November 1 or until the $1 billion Congress allotted the Cash for Clunkers program 2009 disappears. There are also very specific regulations for dealers in terms of how they must disable the engines of old vehicles, but the dealers are still hopeful that the program’s overall impact will be to boost sagging sales.

But it’s like I said… new cars are still too expensive

Yet Snavely did manage to find at least one person who is in a position to buy, thanks to Cash for Clunkers program 2009. Dennis Wagner is eligible for at least the standard $3,500 voucher if he turns in his 1997 Mercury Grand Marquis. Dealers were only going to give him $1,000, although this is likely because he was asking the wrong dealers. If you do your homework, you’ll find dealers who offer special promotions that extend the Cash for Clunkers program to the used cars in their inventory. Talk about getting a better deal!

Speaking of a better deal

Try a payday loan or cash advance if you need help with a down payment. Apply here and see in moments whether you’ve been approved for anywhere from $100 to $1,500!

CARS!

Whether you call it Cash For Clunkers program 2009 or the official title – Car Allowance Rebate System, or CARS – people are interested to see if they qualify. To review, Cash for Clunkers program 2009 provides vouchers through registered dealerships. Consumers who are replacing a car or truck less than 25 years old that gets fewer than 18 miles per gallon in combined city and highway driving.

“I believe we have better than 70 pending deals on it right now,” said Bill Demmer, a dealership owner in the Detroit area to the Free Press.

Yet many dealers aren’t as hopeful

The Obama administration sees Cash for Clunkers program 2009 as a means or getting more fuel-efficient vehicles on the road and jump starting the sagging automobile industry in America. Yet there are scores of dealers who doubt the effectiveness of this convoluted program.

Specifically, some refer to some last-minute updates the U.S. Environmental Protection Agency made to federal fuel economy data. This change effects approximately 100 vehicles that would have previously been eligible for the program. The EPA upped the miles per gallon of these vehicles, making them ineligible. A fine way to frustrate an already downtrodden consumer base, this is.

We don’t want no stinkin’ disabled!

Here’s a cost issue that dealers have to take into account: the Cash for Clunkers program 2009 requires that with all cars they take in trade, the engine and transmission must be disabled and taken to a junkyard. Obama doesn’t want these things to make it back out onto the streets with their high emissions and low miles per gallon ratings.

Yet it seems that not all junkyards want disabled stuff.

“We finally got a hold of a junkyard willing to take the disabled engines and transmissions,” said Bill Golling, owner of a Bloomfield Hills dealership.

And registration is tough

(Photo: happyvalleynews.wordpress.com)

Here’s something that comes as no surprise to me: it’s difficult to register for the Cash for Clunkers program 2009 through the government Web portal. What a shocker! Some dealers have applied, but are still awaiting a confirmation E-mail.

But again, that hasn’t stopped some people from going after the new vehicle of their dreams. Unfortunately for people like Tom and Ann Morabito, they dream of the Ford Taurus. Sure, it’s a 2009 Taurus, but it’s still a Taurus. They are geared up to swap their 1997 Ford Aerostar minivan. They no longer need the extra passenger room because their children are grown. Tom Morabito told the Free Press that he wants a 2010 Taurus (as if that will be better), but they won’t be available for a few weeks. He’s worried the Cash for Clunkers program 2009 will be out of cash by then.

A long way to go

As of the day before I write this, the National Highway Traffic Safety Administration (NHTSA) had processed 70 vouchers. That’s nationwide, apparently. Obama hopes that the Cash for Clunkers program 2009 will aid in around 250,000 transactions.

“We would certainly dearly love to see the program be a huge success, but we don’t see the money running out. We’ve got $1 billion,” said NHTSA spokesman Ray Tyson.

Will you run out of money for a down payment? Try a payday loan or cash advance if you need it to bridge the way until your next paycheck!

Related Video:

Car buyers can get big tax breaks for going green until 2012.

If you are one of the few lucky Americans who is in the financial position to consider buying a car, now is a great time to do it.

Between automakers’ eagerness to bring in money and the various incentives in the economic stimulus package, you could save a bundle.

Struggling automakers

Automakers have already had to seek help from the government to stay afloat. They are more eager than ever to sell cars. They need to bring in profit and get inventory off sales floors.

Car companies are even offering employee pricing in many cases, which can get you up to a 10 percent discount. Also, check for rebates and other additional incentives with different dealers.

A little tax help

Anyone who makes less than $150,000 per year will qualify for tax breaks if they buy a car in 2009. “The stimulus bill gives consumers a state sales tax and excise tax deduction,” according to the Associated Press. This applies to any type of car, including foreign-made vehicles.

Kudos for going green

Incentives are even bigger for buying hybrid cars or other electric vehicles. Buyers could qualify for a tax credit of up to $7,500, and this incentive lasts through 2012.

Word of warning

Though the prices and incentives on cars are great now, loans are another story. The credit crunch is still in full swing. Even people with high credit scores will have trouble qualifying for financing for a while.

This is a good example of how the unstable financial system affects the economy as a whole. Banks reeling in credit lines has contributed directly to the mortgage crisis and the troubles in the auto industry.

Bottom line

Only high-end luxury models are available for lease nowadays.

So, if you have enough money to pay full price for a car or if you’re lucky enough to get a loan, now is a great time to buy a vehicle.

If you’re looking to lease a car, be warned. Leasing is virtually nonexistent right now.