U.S. Consumers Come Out for CARS

by The Investment U Research Team

Christmas can come in July, or at least late July for auto dealers and automakers. The CARS program, better know as cash for clunkers, is doing exceedingly well for the auto industry.

On Friday when we heard the money was running out, we expected new funds to be added – $2 billion dollars later and one Senate vote away we’re about to see just that.

Ford (NYSE: F) – the only automaker that wasn’t bailed out by the government – is already seeing increased sales, and consumers are probably acknowledging that fact by purchasing vehicles from a company they see as stable.

That’s not to say that General Motors, Chrysler and numerous foreign auto companies aren’t enjoying the spoils as well.

While the program’s success can be see as pent up demand, a good economic policy in action, or a way to clean up the environment, it’s well liked and consumers are buying.

And what that really goes to show is that the American consumer – driver of economies around the world, and an economic force to be reckoned with – hasn’t died off or completely changed their spending habits.

The American consumer is just in a period of hibernation, and will return refreshed as the economy slowly turns around, much like it did after the Great Depression. It’s good to know that they do come out for bargain hunting, a fact that few retailers will miss.

Symbols mentioned in this article: F.

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