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 & Classic Ford restoration/performance market, reports suggest that there should be little change and there is even potential for growth. A report by BB&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 none-essential automotive products. Since most Mustangs from 1979-2004 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 scrapped include 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 15-20 year old cars are not going purchase $30,000 hybrids, using only the rebate as a down payment a $28,900 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. Continue reading ‘Mustang Industry: Cash for Clunkers, How will it effect your business?’ »