New Vehicle Market
Posted: April 3, 2009
I have been shopping for a new vehicle on and off for the past few months. It is out of necessity since my 2002 Chevy Trailblazer is starting to bleed my bank account with bi-monthly expenditures needed to fix things that begin to wear out on a seven-year-old truck.
I was a bit leary of making the new purchase until this past week when it was announced that the federal government would guarantee warranties on new vehicles purchased from car companies that may not be in business in the next few years. I was also intrigued by the potential tax break for new car buyers through the end of this year as a way to stimulate the automobile industry.
Unfortunately, I have printed legal news about hundreds of small businesses that have filed for Chapter 11 protection under the federal bankruptcy code in The Bottom Line over the past 20 years. But most readers may not realize that some of the firms that have filed for protection from creditors actually become viable entities over time. Certainly, there are those who mismanaged their finances or fell on bad times for other reasons. But, in my opinion, there is nothing wrong for companies that were once profitable to reorganize under the court's supervision to try to regain solvency.
Likewise, I believe the major auto manufacturers should embrace the possibility of bankruptcy protection before any more of our tax dollars are forwarded to assist with day-to-day operations. General Motors and Chrysler should be required to show the government that the orginal billions of dollars in bail-out money was well-spent. So far, though, that does not appear to be the case. On the other hand, there are other brands that are gaining traction in new car sales.
There's no question that the lack of overall activity in the new-car market is fueled by media reports of doom and gloom and uncertainty within the industry as a whole. So it should not be surprising that used vehicle dealerships are holding their own and service stations that fix older cars and trucks are doing fairly well given the state of the economy.
I suppose I could spend another $500 on my Trailblazer so it can get me through the next six to nine months. But I think now is the time to make an intelligent investment for something new - especially if I can recoup some of my tax dollars as a future deductible and know that some of those same proceeds could also guarantee that my new vehicle will have a valid warranty. In fact, I really have no other choice but to buy something rather than trying to afford the upkeep of an aging vehicle.