Consumers Have Money to Spend but Lack Confidence

Cash for Clunkers demonstrated that consumers have money to spend. However, they lack the confidence to do so. Consumers have not recovered from the near financial meltdown of last year, and with unemployment still high, many are saving more and paying down debt. This reluctance to come back in to the auto market is adding to the pressures being felt by automakers.

September Used Car Sales Drop Expected

The customers are there, but the supply of used cars is not. Inventory levels have been dropping since early summer. New car dealers are not seeing trade-ins as new car sales continue to be depressed. Cash for Clunkers may have crushed 700,000 used vehicles. The result will be lower sales volume in September. New car dealers are already bracing for lower new cars sales as a result of the success of Cash for Clunkers. This could be a tragic double hit to some dealers already on shaky financial ground.

Luxury Makers Pushing Certified Pre-Owned as Leases Expire

With U.S. luxury-car sales down, automakers BMW and Lexus are encouraging customers coming off leases to buy certified pre-owned luxury models. It saves the customer money and it's good for the dealerships as well with profit margins on CPOs comfortably near those of new vehicles.

Prestigious Research Schools Studying Vehicle Safety

New England University Transportation Center and MIT's AgeLab researchers are testing drivers and vehicle technology in an effort to build a safer vehicle. The car would not only detect problems with the driver but correct the unsafe situation.