Mustang Industry: Cash For Clunkers How Will It Effect Your
Mustang Industry: Cash For Clunkers How Will It Effect Your Business?
There is a lot of talk about the new cash for clunkers legislation that aims to take older vehicles off the road. Many aftermarket parts suppliers independent repair and body shops have been wondering how this will effect their business. In our industry the Mustang amp; Classic Ford restoration/performance market reports suggest that there should be little change and there is even potential for growth. A report by BBamp;T suggests that most people that will be taking advantage of the program will be lower income drivers market research shows that this demographic does not spend a significant amount on noneessential automotive products. Since most Mustangs from 19792004 still demand a higher resale value on the open market most drivers will opt to sell vehicles in place of trading them in. Another factor on the number of vehicles that would be scrappedinclude buyers qualifying for new car financing with credit already hard to obtain low income drivers will have a hard time finding an approval for a new car loan. Even if a consumer went from 18 mpg to 30 mpg the savings in fuel would be less than 50 a month. Many people driving 1520 year old cars are not going purchase 30000 hybrids using only the rebate as a down payment a 28900 Ford Escape Hybrid for five years will cost nearly 575 a month at 7 interest. Here in California most of the Cash Ford Clunkers rebate will be eaten up by newly passed sales tax hikes and higher registration fees that in some parts of the state can add almost 13 to the purchase price of a new car.
If you are still concerned that Cash Ford Clunkers programs could effect your business there are several ways you can diversify your product offering to appeal to a broader market. If you only offer classic parts perhaps expand into late model if you specialize in Fox Bodies expand into other 70s90s pony cars such as the Camaro. The only vehicles we may see diminished in our industry are later model Mustangs however the lower value cars in this segment such as the 2.3 four cylinder Mustangs of the 80s and 90s may not offer enough of a fuel savings to justify the car payment. These programs will not be removing large SUVs off the road and will more then likely be taken advantage of by people that were in the market for a new car anyways.
Where the aftermarket may see a major benefit is with as many as 3000 more dealerships closing maintenance parts will need to be supplied by aftermarket shops. If you happen to be in a region where a dealership is closing you may want to start aggressively promoting your company as a alternative parts repair and maintenance facility. The aftermarket may benefit from this bill by receiving good running parts cars that would be sent to dismantlers however nether of the bills have a clear outline of what would happen to the clunker once it is turned it. With out clear definitions on this aspect of the legislation the environmental gains could be limited or even detrimental if vehicles are not properly dismantled and disposed of or if they simply end up being exported to Mexico and Central America the overall carbon emissions will only increase world wide.
About the writer: Michael grew up in the car rich culture of Southern California and purchased his first car at the age of just 14. He has owned more then 60 cars motorcycles and scooters. Michael’s other passions include photography and travel having been to over 20 countries and almost every state in the union. Having driven in over 14 countries Mike has great stories insights and photos of the world seen from behind the wheel of a car.
Related posts:
