[lelio]

I'm watching the used car market. In about 2 years all those people that got 0% financing are going to look to trade them in or sell it. Part of how a used car keeps its "value" is that you've still got to make payments on it due to interest, ie you can't sell the car for less as you have to still pay off some interest payments.

Now with that amount gone (lets call it the Interest Tax) you'll be willing to take less for your automobile. How much that is, I have no idea.

What is this going to do to the new and used car industry? Its hard to tell. Its going to be hard for GMAC to charge any reasonable amount of interest as people will have less to trade in and they'll get sticker shock "You mean I have to pay $50 more a month for the same car?".

It will mean that those of us that just buy used cars are going to have a lot of bargains.

Those that bought a car before 0% financing are going to be in a real pickle as they're going to try and sell a previous year's model for more money then the 0% guy.

[Beck_isright]

The new car industry is already bracing for a disaster next year. While the Japs have kept the per unit costs down, the big 3 are experiencing higher costs. For example, did you know that the average CPV (Cost per Vehicle) for pension allocations for GM is $1700 per car and for Ford over $2000!!!!! Just imagine the impact on new car prices with higher interest rates next year AND having to renegotiate the UAW contracts.

Before you ask, Toyota's is $200 per vehicle....

[arete]

There never was, is or will be a free lunch. You may like to think that you aren't paying, but you are.

Richard W.

[Petronski]

I'm watching the used car market.

I don't see how this would apply to the real estate market. Automobiles are consumables in the long run, real estate is not.

[Glenn]

It will mean that those of us that just buy used cars are going to have a lot of bargains.

There are new car bargains, as I discovered this week. My wife's 11 year old Saturn needs to retire. I went to Saturn looking for a replacement and the "no haggle" company gave me $964 for working for a GM supplier, $3000 reabate, $1000 loyalty payment and another $1000 model payment. A total of $5964 off the $20k sticker price for a nice, new sedan -- and we get to keep the old one as a knick-knack. It's sick out there.