Cash for Clunkers and ability to negotiate.

kannibul

I hate to say it, but I bet the next bubble that'll pop are people defaulting on these new car loans. =/

Cjanik

Im worried about that too,

a lot of people planned on buying a car on spread out dates throughout the year or two. Now because of this clunker deal, they acted fast and early to get the most for their money.

now whats going to happen to all of the sales for the next year or two now that a big lump of the buyers already purchased inside of this 1-2 month period.

oh boy oh boy, more layoffs? huge drop in sales = companies going bankrupt?

MeetJoeAsian

With $3500/$4500 initial investment into a new vehicle, if someone defaults on the loan, the risk is minimal to the banks. Just because there is a big rebate for a new car doesn't make it that easy for ANYONE to just get a loan. Subprime lenders are still REQUIRING down payment in the form of CASH OUT OF POCKET in addition to any sort of rebate offered by dealership/government. However, if even with the strict guidelines banks are imposing these days, should someone defaults on the loan, then chances are, the vehicle should be in or close to equity position because of the initial $3500/$4500 deduction. You can't just go out and buy ANY new car, the new car has to follow the federal program guideline, and those cars are generally NOT that high a dollar.