USF Encounter

Issue date: 5/1/09 Section: News

Media Credit: Tricia Whybark

Media Credit: Tricia Whybark

In recent months the U.S. car industry seems to be clinging to life wishing for and receiving government bailouts in order to survive. More specifically, General Motors and Chrysler have been provided emergency loans in order to prevent their sudden collapse. However, these loans were provided on the condition these companies would restructure and make themselves more visible in the auto industry and ultimately stand on their own.

Currently, General Motors has made an effort to restructure however the government doesn't feel they have gone far enough. President Barack Obama asked them to go deeper. GM responded by announcing their Chairman and CEO Rick Wagoner was stepping down in order to allow new vision and new direction to create the GM of the future. Work on their plan continues. Chrysler on the other hand has more challenging problems. They are working on a plan to partner with Fiat, an international company known for its cutting edge technology. The hope is a partnership of these two companies would bring manufacturing of new fuel efficient cars and engines to a new level in America.

The President has pledged support for auto sales by ensuring that Recovery Act funds to purchase government cars go out as quickly as possible and he will work to accelerate other federal fleet purchases as well. In addition, the Treasury Department's Consumer and Business Lending Initiative will accelerate their efforts to help auto finance companies increase the flow of credit to both consumers and dealers. Finally, a new tax benefit has been approved for any auto purchase made between February 16th and the end of 2009. The plan is to allow consumers to deduct the cost of any sales and exercise tax.

Car dealers are doing their best to provide incentives and many are promising the world right now in an effort to restart sales. Many are offering interest free loans. Some have even promised they will make your car payments if you lose your job or you can return the car to the dealership with no penalty to your credit. The extra incentives offered by the industry could provide excellent opportunities for buyers to make great deals.

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