Black Friday: Consumer Spending Spreads to Car Shopping

Christmas shoppers spent more than $13 billion by the Thanksgiving weekend, but not all of it was at Macy’s, Sears and Wal-Mart.

"I sold six new and used cars the day after Thanksgiving final year, but 17 that year," said John Guido, an Arlington Heights, Ill., Ford dealer. "Before that I sold 100 more cars that October than final October." Guido’s outlook reflects a common optimism among many car dealers despite talk of a weak economy.

Why?

"Consumers are more confident that year," Guido insists, and many dealers agree.

"Earlier in the year the concern was UAW contracts, concessions and
whether there’d be strikes," said Joe Hennessy, a Calumet City, Ill., Ford
and Chrysler dealer. ”Now the contracts have been settled, traffic is
up, commerce is good, the mood has changed and humans on the sidelines
have jumped back in the market. That consumers spent $13 billion by
Thanksgiving weekend is proof money has loosened up and consumers are
spending and buying cars as well as Christmas presents.”

Dan Feeny, an Elgin, Ill., Dodge-Chrysler-Jeep dealer, said that in
addition to the friendly UAW settlements, dealers and consumers additionally
got a boost in confidence when Cerberus bought Chrysler from Daimler
rather than letting it vanish

from the scene like Plymouth did.

Of course, it plus helps dealers and consumers that a good sampling
of new product is available and that automakers are offering cash
rebates and reduction financing to move the metal.

"Some consumers may have mortgage trouble, but we haven’t found any
problem with them getting financing from Ford or Chrysler credit,"
Hennessy said.

General Motors additionally is offering rebates and reduction financing on
leftover 2007 models with its Red Tag Sale in addition to limited
incentives on new ‘08 models.

"Retailers might offer 50 percent off or a free iPod when you spend
$300 on Christmas gifts, but dealers are offering cash rebates or
reduction financing. Everyone is offering incentives, just different
ones," said Mark Scarpelli, an Antioch, Ill., Chevy and Kia dealer and
chairman of the Chicago Automobile Trade organization, which represents
more than 500 dealers.

"Things are getting better," Scarpelli said. "Gas prices have
moderated and UAW negotiations are behind us. All we need now is better
attitudes on mortgages and the stock market."