Black Friday: Consumer Spending Spreads to Car Shopping

Christmas shoppers spent more than $13 billion over 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 last year, but 17 this year," said John Guido, an Arlington Heights, Ill., Ford dealer. "Before that I sold 100 more cars this October than last October." Guido’s outlook reflects a common optimism among many car dealers despite talk of a weak economy.

Why?

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

"Earlier in the year the concern was UAW contracts, concessions and if there'd be strikes," said Joe Hennessy, a Calumet City, Ill., Ford and Chrysler dealer. ”Now the contracts have been settled, traffic is up, business is good, the mood has changed and people on the sidelines have jumped back in the market. That consumers spent $13 billion over 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 also got a boost in confidence when Cerberus bought Chrysler from Daimler rather than letting it disappear from the scene like Plymouth did.

Of course, it also helps dealers and consumers that a good sampling of new product is available and that automakers are offering cash rebates and discount 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 also is offering rebates and discount 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 discount 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 Association, 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."