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CNW: McCain Win Would Help New Vehicle Sales

October 30, 2008

Thisis analysis from CNW Marketing Research released 10/30.

Obamawin: 14.6 million new sales, 36.75 million used; McCain win: 15.4 million newsales, 37.5 million used

Reasonsfor the difference: The tax policies each is supporting have significantlydifferent impacts on small and medium business as well as corporate fleet autopurchases. If the Obama policies are enacted by a Democrat-controlled Congress,new-vehicle sales -- which are nearly 40 percent to small, medium and largebusiness as well as commercial fleet (excluding daily rental) -- would beseverely curtailed.

McCaintax policies would likely be thwarted by a Democrat-controlled Congress whichputs the industry on a conventional and historic trend line.

Onthe used-vehicle side, the differences can be traced to the same tax policies.About 20 percent of used sales are to families with incomes over $200,000 peryear for sons, daughters and other family members as well as for use in homebusinesses. Higher taxes on these families is not offset by lower taxes orrebates to lower income families who typically buy private party and on anas-needed basis.

Noneof the tax plans would actually add significantly to the disposable income ofthose families.

The800 pound gorilla in the closet is the $750-plus billion bank bailout money andhow much of it would be loaned for new and used car financing. Regardless ofwho wins the election, these funds could add upwards of 250,000 sales to eitherPresidential winner's numbers above. (Obama: 14,850,000; McCain: 15,650,000).On the used side, nearly three-quarters of a million units could be addedregardless of who wins the election.

Thoseare some big "ifs," but rarely has there been such a significantdifference in proposed tax policies and the potential for one party to have asuper majority capable of stifling debate over those policies.

 

 

 

 

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