Auto Sales Tank In September

Auto sales tanked in september which means the "cash for clunkers" program provided just a temporary sales increase. Not unexpected.

GM sales fell 45%, Chrysler 44% and Ford 5.1%. Among imports, Toyota fell 13%, Honda 23%, and Nissan 11%. Oddly enough, Hyundai posted a gain of 27%. Total of all vehicles sold was 745,997.

The interesting thing is the huge drops in GM and Chrysler compared to Ford. This trend has been ongoing since the bailouts. Perhaps people are more willing to buy Fords because of some resentment against the other two automakers and the fact that Ford is still solvent(for now).

The perception of Japanese auto quality doesn't seem to have made a difference either. Hyundai is doing well. That may be the result of their warranty and the recent program to insure payments against job loss. On the other hand, GM's 60 day no questions asked return policy seems to have had no effect so far.

Of course, people are reluctant to take on new car payments in the current economic climate. If the old car is still running, they're more inclined to keep it or get it fixed if there are problems. With so many people unemployed and credit tight, the days of trading in for a new auto right after the old one is paid appears to be a thing of the past. At least in the numbers.

Chrysler Cash For Clunkers: They'll Match It

Chrysler,which is now out of bankruptcy(thanks to our tax dollars), has a new program in which they will match the government's new cash for clunkers program or offer 0% financing for up to six years. It really is the old rebate or zero finance ploy which the auto companies have used in the past. Reworking it to coincide with the government rebate is a pretty smart marketing ploy. It remains to be seen if it will cause a substantial increase in sales.

There's a few caveats with the government program and it sure will be interesting to see car salesmen working deals with this one. If anyone is considering this be careful you don't get screwed. Learn everything you can about the program and make sure you do your homework on how much your old vehicle is really worth(check Edmunds.com for that).

Here's a good resource with interactive tools that will guide you through the new program: Cash For Clunkers Facts