Obamacare Killed Used Auto Tax Season!

USED AUTO SALES FELL OFF A CLIFF!

 

Millions of Americans DID NOT receive Tax Refund Checks in 2016 because they did not have Health Insurance.  This has been a Devastating Blow to the Used Auto Market and to the US Economy.  Refund Tax Season which Used Auto Dealers like to Joke is “Our Christmas Season” lasted 2 months in 2015, however; it was a short 3 weeks in 2016 and then an immediate drop in sales.  This has many direct negative impacts on the dealerships and trickles into the economy.  Auto Dealers typically bulk up Inventory in winter to capture the Tax Season demand.  Since Tax Season was only 3 weeks most dealers had too much overstock.This overstock sucked all the profits of tax season out through floor-plan curtailments, forcing the Dealers to Cut prices hurting margins.  Dealerships live and die by Inventory Turns, and if the inventory does not turn fast enough they lose value and incur payments and interest at a rate similar to pay-day loans.  This huge loss of sales v.s. last year trickles into the economy in a devastating way.  Dealership employees make less money, so they spend less money.  The Dealership cuts expenses and stops reinvesting into the business.  Selling less cars the Dealership spends less on parts and recon work so shops and parts companies start seeing sales slip and start reducing and cost cutting.  Their employees make less and the business spends less so their suppliers and vendors start seeing a reduction in sales and so on and so on.

This Trickle down can cost an economy TRILLIONS of lost dollars in the Economy and is like a runaway snowball rolling down a mountain.  We are currently sitting at the top of the mountain, I am afraid to see the Devastation when we reach the bottom.

 

 

2 thoughts on “Obamacare Killed Used Auto Tax Season!

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