Dealers Make Their Own Automotive Stimulus Plan

Trade for a new or used car!

What!? You could afford your own stimulus the whole time? (Photo:

What!? You could afford your own stimulus the whole time? (Photo:

Will $2 billion in Cash For Clunkers money be approved by the Senate? Will the public’s insatiable appetite to recycle their tax dollars on vehicles many of them can’t afford ever be quenched? Will Cash For Clunkers get in the way of the Obama health care plan? These questions and more will be answered in the upcoming weeks. However, consumer greed being what it is, certain automotive dealerships are participating in a program called the Automotive Stimulus Plan. Apparently, they have the money just sitting around to be able to offer consumers the same discounts the taxpayers had to pay for before.


Yes. Consumers come in with their short term loans and cash advances for down payments, and the dealers put up their own money for the discounts. Joshua Miller reports for that some of America’s largest dealerships have collaborated on this private stimulus package. On trade-in, car buyers will get anywhere from $500 to $4,500 in incentives. That’s on top of the federal program, if it continues to exist.

So why is it that taxpayers would have to put up $2 billion more if the dealers can take care of this themselves? That’s what outraged senators like Jim DeMint want to know. Could the dealers have done something like this all along? Did the overwhelming response to Cash For Clunkers fill up their coffers, enabling them to be so generous?

The Automotive Stimulus Plan is rolling now

Unlike Cash For Clunkers, dealers participating in the Automotive Stimulus Plan are accepting all vehicles older than 2007 as trade-ins, and the money granted can be used on either new or used vehicles. This plan to “fill gaps” in the federal program, says Brian Benstock of Paragon Auto Group in New York City, should greatly expand the market. And why not? There are plenty of perfectly good vehicles that are 10 to 15 years old.

“You left out nearly half of the potential market,” Benstock told “We wanted to come up with a program in that no car would be left behind.”

Oh, bad terminology to borrow, Brian

At least the Automotive Stimulus Plan addresses what was perhaps the major flaw with Cash For Clunkers: people can trade their older car in for a used vehicle. The government’s program doesn’t allow that, which effectively prices many people out of the market for a vehicle. Plus, the MPG requirements of the Automotive Stimulus Plan are lower than Cash For Clunkers. The trade-ins only need to be two MPG less efficient than the vehicle the consumer wants. However, that could be an environmental drawback.

Stimulus of the package, did you say? (Photo:

Stimulus of the package, did you say? (Photo:

“The MPG requirements are lower because our primary goal is to help consumers that don’t qualify for the government’s program and to stimulate the economy through improved sales, jobs and spending,” Scott Grunwell of Courtesy Chevrolet wrote in a press release.

The private sector: helping taxpayers without taxpayer money?

“This is exactly what the private sector does better than the government, which is to establish a program that benefits everyone and doesn’t cost the taxpayers a dime,” said Tom Schatz of Citizens Against Government Waste to

As it stands, many believe the $2 billion in additional Cash For Clunkers money will be approved by the Senate. Thus, the taxpayer dollars will continue to flow. Regardless of whether the government program makes it back, the Automotive Stimulus Plan will be effective until November 1, 2009.


The Automotive Stimulus Plan isn’t an environmental package; it’s designed entirely for economic aid. Obama’s plan is trying to kill two birds with one stone, and this may have limited its scope unnecessarily. As Benstock puts it, “This is the private sector taking over. We’re going to take the baton from the federal government and run with it.”

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