Tuesday, February 3, 2009

An Attempt to Stimulate the Used Car Market

Some Chinese friends visiting LA recently expressed their surprise at the size of the used car market in the U.S. They tell me that back home they would never consider buying a used car.

Perhaps this new policy under consideration is aimed at people like them. Apparently there is discussion of cutting in half the value-added tax on a used car transaction to 1 percent.

While one percent seems a small savings, perhaps it will help to spur some sales of used cars, and maybe even help to shore up the value of used cars in China. Of course this would not directly help the auto manufacturers, but it could provide an indirect stimulus to new car sales by convincing current owners of cars to sell and trade up.

Every little bit helps.

Meanwhile, the U.S. Congress talks, and talks, and talks, and talks ... zzzzzzz