How about $3000 off your new Camaro ??

[FirstLSK]

I am on the wall about the loans to the Big 3 because it seems like a transfusion to a fatal disease. How about if the gov't helped them out through the American citizens:

*** Stimulate Car Buyers, Not Car Makers ***

Should Uncle Sam save General Motors, Ford and Chrysler from bankruptcy? In normal times, most mainstream economists (and many mainstream legislators) would probably say no. But with financial markets in turmoil and the economy on the cusp of a nasty recession, these are hardly normal times. In any event, Congress and President-elect Barack Obama are committed to spending billions to keep the Big Three afloat.

What's not been decided, however, is how that money should be spent. A radical change in perspective could spare the nation a lot of grief down the road. Rather than subsidizing the auto makers directly (and almost certainly sucking Washington into their management), why not give Americans the financial incentive to accelerate purchases of cars and light trucks? The consumer-subsidy approach would be a less wasteful route to the desired end, as well as one that would leave a less toxic legacy of market intervention once the economy has recovered.

While the details of the bailout have yet to be hammered out, all signs point to loan guarantees conditioned on concessions from the stakeholders -- perhaps cuts in union and white-collar compensation, surely restructured bank debt, and maybe a shotgun wedding between Chrysler and GM. This would keep the industry alive and most of its workers employed -- for a while.

However, even if the industry recovers with a lot of help from its friends, the price will be high. At best, the arrangement will inevitably tighten the all-too-cozy relationship between Washington and Detroit in matters of technology, pensions, fuel efficiency and environmental regulation, as well as opening the door to bailouts of equally worthy industries in distress. At worst, it will suck the taxpayers into the next automobile crisis, and the next.

Since a big fiscal-stimulus package for fighting the recession -- some combination of tax cuts, extended unemployment compensation, infrastructure grants and assistance to states -- is coming soon, why not stimulate consumers to buy cars? Why not offer eye-popping rebates -- say, $3,000 -- for a limited time to buyers of cars and light trucks? It would probably make sense to phase out rebates for the most expensive cars, and as a treaty obligation, it wouldn't do to discriminate against foreign makes.

How much downstream benefit this would generate and for whom is hard to predict. Still, it is a fair bet that most of the money would be quickly recycled in the form of demand for everything from auto parts to car mechanics' salaries -- just what you want to happen in a recession.

If, say, 12 million nonluxury vehicles were sold in the next year -- similar to 2007 -- the rebates would total $36 billion. Of that sum, about one-half would go for cars built by the Big Three. Better yet, more than 80% could be expected to go for vehicles actually manufactured in North America, even if the auto maker is from overseas.

This is not a perfect solution. The rebates would have to be phased out so that sales don't drop off a cliff the day after the deadline. Not to mention that it is far from clear that it ever makes economic sense to favor one industry over another during hard economic times.

But some form of aid to the auto industry seems to be politically inevitable. Wouldn't it be nice to manage the task with maximum benefit to middle-income Americans -- and minimal micromanagement by Washington?

-- Mr. Hahn, Wall Street Journal

[Primus]

Sign me up.

[radz28]

That'd be a nice little down payment. I'm still not in the position to get one now, even under those terms, but that would help many people I think, and actually stimulate the economy.

[Brokinarrow]

Sounds good to me, hope this gets brought to congress!

[MerlinZero]

I like this plan the most, mainly because it benefits me....the most....

[Chevyzone]

Originally Posted by FirstLSK

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Since a big fiscal-stimulus package for fighting the recession -- some combination of tax cuts, extended unemployment compensation, infrastructure grants and assistance to states -- is coming soon, why not stimulate consumers to buy cars? Why not offer eye-popping rebates -- say, $3,000 -- for a limited time to buyers of cars and light trucks? It would probably make sense to phase out rebates for the most expensive cars, and as a treaty obligation, it wouldn't do to discriminate against foreign makes.

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GM has already been activitly offering deep discounts on '08 models and some '09's. They recently offered GM Employee discounts to everyone for 30 days, then decided to extend it. They held Red Tag sales, and are currently conducting another big Red Tag event. Doesn't seem like any of this helped stimulate sales. It's kinda like the old adage, "Ya can't get blood from a stone."

Folks just don't have the money, or credit to buy new vehicles. Far to many are loosing their jobs and homes and are simply putting the purchase of a new car on the back burner.

It's a very sad situation, but I believe it's gonna take far more than a $3,000 rebate (discount).

[The_Blur]

It gives GM a bigger market share by reducing the profit per car and increasing the number of customers considering GM products. A bigger market share gives GM the sway necessary to influence policy.

[Supermans]

Originally Posted by Chevyzone

GM has already been activitly offering deep discounts on '08 models and some '09's. They recently offered GM Employee discounts to everyone for 30 days, then decided to extend it. They held Red Tag sales, and are currently conducting another big Red Tag event. Doesn't seem like any of this helped stimulate sales. It's kinda like the old adage, "Ya can't get blood from a stone."

Folks just don't have the money, or credit to buy new vehicles. Far to many are loosing their jobs and homes and are simply putting the purchase of a new car on the back burner.

It's a very sad situation, but I believe it's gonna take far more than a $3,000 rebate (discount).

Even with the red tag rebates, the dealers are still marking up the prices as they are allowed... People see deals or red tag all the time so they come to expect it. However if the media makes it out to be a part of the bailout where $3,000 credit would go to reduce prices of vehicles, it would spread the word.. However it the government is invloved, you bet that $3,000 will only go towards what they consider to be green cars and they will raise taxes on muscle cars or raise the MPG rate for it to be conidered a gaz guzzler and tax it more.. We would have to pay more for our Camaro even though gas us below $50 a barrel and in some places less than $2.00 a gallon..

[FirstLSK]

Originally Posted by The_Blur

It gives GM a bigger market share by reducing the profit per car and increasing the number of customers considering GM products. A bigger market share gives GM the sway necessary to influence policy.

I believe this would be the real impact.

If the govt is willing to pay $3000 on all American cars, it would be a good start to help even the playing field. The big 3 would still need to reorganize and restructure for a long-term solution.

I really like the idea of solving the problem through the American people and not through the bloated corporations.

[VICTORY RED 1SS]

bring back the Tucker

[TAG UR IT]

Excellent point about the dealers raising MSRP.

How about....the gov't mandating that dealers can't "gouge" by raising the price of the vehicle over MSRP AND give a "rebate/discount."

I mean...what is the use of a rebate when I go to my dealer to only find out that Ancira tacked on 2K to the MSRP for the LT's and 5K to the MSRP for the SS's. That 3K the gov't offers should be 3K OFF THE MSRP of a vehicle....without an upcharge on the MSRP.

I'd be willing to be there are a number of people right here who think they "might" be able to afford one, but will realize once they crunch the #'s that it will be VERY tight in their payments. Those people might be contemplating whether or not to buy the new car...(not just a Camaro).

That 3K could bring that car just withing their budget allowing the sale of the vehicle...allowing the automaker (not GM specific) to make a dollar. Add all of those people up...cause you know there are THOUSANDS out there who are just a bit shy of being able to get that new car and this could make that sale possible.

The only problem....

The automakers would HAVE to sell more to make this work. We already see 10k off Dodge Rams. I've even seen the "Buy a Tundra and get a car for free." If these already in place discounts don't do it.....why should the 3k off MSRP??

[2010_5thgen]

they already have the red tag sales event going on now, and if that isnt going to stimulate people to buy, 5-9,000 off in some cases, then i dont know what will. i would buy a car now if i didnt plan on buying the camaro. id probably buy a new z06.

[rayhawk]

Well, this is more of a handout than a loan. With the loan to the automakers, at least the companies will end up paying us back with interest. More handouts to people does'nt seem like a good plan to me. It just adds to government debt. And why would we do any favors to foreign automakers when almost all of the money they make leaves the US?

I wonder what the odds are on the banks paying back any of the 700bln they are getting versus the automakers paying back their potential loans? At least the automakers have a business plan and a product to sell, the banks just want money to cover their screwups and to force the government to buy debt that has no chance of being repaid.

[CWI]

Originally Posted by 2010_5thgen

they already have the red tag sales event going on now, and if that isnt going to stimulate people to buy, 5-9,000 off in some cases, then i dont know what will. i would buy a car now if i didnt plan on buying the camaro. id probably buy a new z06.

Not going to happen, but 5000-9000 off Camaro would sell a lot of cars