Skip to comments.[Car Dealer] to 0bama: Offer $5K Vouchers for New Car Purchases
Posted on 02/08/2009 6:45:17 AM PST by Diana in Wisconsin
As auto sales nationwide continue to dwindle, a Wisconsin auto dealer has offered a solution to boost demand and revive the flailing U.S. auto industry: $5,000 government discounts.
John Bergstrom, CEO of Bergstrom Automotive based in Neenah, Wis., wrote a letter to President Barack Obama late last week suggesting that everyone who purchased a new vehicle in America, no matter where it was built, be given a government voucher for $5,000 during a 90-day period from Feb. 15 to May 15.
The manufacturer would match that with another $5,000 voucher, meaning buyers would get a $10,000 discount under Bergstrom's proposal.
"If the government, the manufacturers, the financial institutions, and the dealers all work together, we could give our economy a huge positive jolt," Bergstrom wrote. "Together we could get this industry rolling again in a hurry."
Bergstrom's plan also assumes dealers would agree to sell the vehicle at invoice pricing, and financial institutions would finance credit-worthy buyers with 72-month loan at a 5 percent interest rate.
The plan could eliminate the stranglehold inventories of new vehicles piled up across the country, and generate new vehicle orders that would bring people in manufacturing and parts plants back to work almost immediately, Bergstrom wrote.
While Bergstrom Automotive has also seen its sales volume decline last year, Bergstrom said his proposal was not self-serving.
"I'm very concerned about workers out of work," said Bergstrom in a recent interview. "It's very important to get them back to work. There's no reason to dwell on getting manufacturers' costs down."
According to Reg-Trak, a Waterloo automotive research firm that tracks state auto sales, new car and truck sales declined by 13 percent last year in south-central Wisconsin. Truck sales, including sport utility vehicles, declined 15.4 percent while car sales declined 10.2 percent.
In Dane County, car and truck sales in 2008 declined by 11.5 percent from 2007.
However, Wisconsin and Dane County fared better than the nation as a whole in 2008 -- total U.S. car and light truck sales were down 18 percent, the worst performance since 1992.
Bergstrom said the White House acknowledged receiving his letter, but as of Friday they had not provided any further response.
Bergstrom's proposal has generated some support among his peers in the auto retail industry. Allen Foster, general manager of Smart Motors in Madison, said he favored anything that would help stimulate the economy.
"The more we can give consumers, the better," Foster said. "We need to restore consumer confidence."
In a bid to boost auto sales, the Senate voted Tuesday to add an $11 billion provision to the economic stimulus package that will allow most Americans to claim a tax deduction for the sales tax and any loan interest on the purchase of a new car from Nov. 12, 2008, to the end of 2009.
Mr. Bergstrom's proposal takes this to the next level, Foster said.
Smart Motors actually bucked the national trend of declining sales, as 2008 was a record year for the company. Still, Foster felt more should be done to stimulate the economy.
"I'm in favor of anything that helps people get their confidence back," Foster said. "It will be better for all of us in the long run."
Why should anything cost anybody anything? *SMIRK*
And if I buy a $1K beater car, can I keep the $9K they're giving away? I can? Yippee!!!
How 'bout a $5000 check to anyone who replaces an overseas software guy with a American one?
ML/NJ (software guy)
And just like college tuition.....
.....the price will rise to absorb the subsidy.
Just give every person living in America — citizen, legal immigrant, illegal, tourist, whatever — ten million dollars.
Then everybody can buy everything and the economic problems are all solved!
Why didn’t anyone think of this sooner?
oooohhhh, I was only dreaming......
I want a pony!!!
Actually this car coupon trick is going to be done in Germany. The deal here is that you trade in a 9-year old car or older (you had own it twelve months or more), and you get $3250 in a coupon. The car has to be German-made, of course. The last week, this has been a huge topic and the car salesmen are busy with tons of fresh business. There is a limit of course....the first 600,000 folks in...get the deal. So there is a rush.
If you look around, Ford, GM and Chrysler are in deep trouble, with no car sales. The $15 billion we gave to Chrysler and GM? Simply flushing down the drain. They will be back by April for more money because cars aren’t selling. I’m guessing the Obama administration will be stupid enough to hand them another $15 billion...rather than use the $15 billion for car coupons.
Can I have a free pony too?
Even if we get a voucher, there will be strings attached.. Meaning you can’t buy an SUV or truck and it has to be from the Dead Three auto companies..
Ha, Free? That just means the dealers can add 5k to the sticker. Makes me want to vomit that I own 3 cars I bought from Bergtrom in Neenah......
Pie. Where’s my pie. I was promised pie and I want it NOW!
So an industry can’t weather an 11% downturn? 11% doesn’t seem like the end of the world. What the heck?
Next will be the American Dental Association demanding 5K vouchers for getting teeth fixed!
Pick ‘n Pay will demanding $100K vouchers for shoes.
Costco will be asking for $2,000K vouchers for food.
Ayn Rand was a prophetess!
At some point, every one of my kids has had a brainstorm and says to me “Daddy, let’s make pennies like dollars”.
BINGO! Just as big education does to college tuition!
You and I are not the getters of free ponies but the buyer of said ponies for others.