Car Sales Tank After 'Cash for Clunkers'

This is a rush transcript from "Your World With Neil Cavuto," September 21, 2009. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: All right, well, first, the cash for clunkers buying binge, and now the hangover. is now expecting September not only will be a bad month for car sales -- it's usually pretty good -- but it could be the worst for the year. I hate to say I told you so, but I told you so.


CAVUTO: We are robbing sales from the future. We're not creating anything for the present.



CAVUTO: I wonder, whatever sales you're getting, Rick, are short-lived. You know what I mean?



CAVUTO: Can the government constantly incentivize? I mean, don't people then expect the government to incentivize?



CAVUTO: They are the means by which we are bought off and paid to programs that trigger a Pavlovian response to buy, and, without which, we increasingly will not buy.



CAVUTO: Will it last? In other words, yes, the government gets you in. What then?


CAVUTO: Boy, that guy is clairvoyant. Anyway, my next guest says that these empty showrooms in the fall is what you get. Jeremy Anwyl is the CEO of

So, Jeremy, we just sort of robbed Peter to pay Paul, right?

JEREMY ANWYL, CEO, EDMUNDS.COM, INC.: Well, we did, yes. So far this year, February was really the -- the worst month. And then I think, September, we're going to find, when the numbers get added up in a couple weeks, it's actually going to be worse. So, the news is not good.

CAVUTO: I was talking to a family member not too long ago, the ones who will talk to me.


CAVUTO: And I will tell you, they were saying, you know, I am just going to wait for the next program.

ANWYL: Right.

CAVUTO: And that was kind of interesting, because, A, that there are people of this view with my DNA, and, B, that that is the Pavlovian response you get, that you spoil people in thinking wait for the next big sale, and in this case wait for the next government big sale.

ANWYL: Right. Well, you have to think about what was actually happening during the clunker program, because consumers not only got an average of $4,200 from the government, but they also got a factory incentive as well, which could have been another $2,000 or $3,000.

So, when you add all that up, the stimulus in the marketplace was unprecedented. And the idea that people might be waiting for something of equal magnitude is kind of scary, because it's probably not going to come along any time soon.

CAVUTO: But, Jeremy, does this apply even to what were [sic] auto guys who were doing a pretty good job, Ford, and Toyota, and some of these others? They had been noting increase in traffic as well. But the sinking tide is sinking all boats now, or what?

ANWYL: Yes, absolutely. And I think a couple of things are going on. Obviously, cash for clunkers borrowed a lot of business from the future. And that's the bulk of it.

But, also, even for the car companies that did really well during the clunker program, there is a huge aftereffect, because inventories are really light. And for a while there, prices were still pretty high. They have started to come back down based on the fact that there's not very many people buying. So, there wasn't a lot of buying reasons for consumers.

And, frankly, we don't think things are going to get back to where they would have been anyway, probably until November.

CAVUTO: Until November. Now, normally, things pick up after that when?

ANWYL: Well, generally, what happens is, July and August are sort of the big clean-out months. So, those are huge.

CAVUTO: Right.

ANWYL: September is also pretty good. But then you've got some of the new models starting to come in.

This year, they're going to be quite a bit more expensive. And as you kind of pointed out, car-buying is a discretionary purchase. And unless people really feel excited about it or motivated, they can easily put it off by a few months. And that's clearly what we're seeing.

CAVUTO: Finally, I heard an auto dealer not too long ago telling me, people are buying, but they are not buying a lot of the extras. If they had a choice between...


CAVUTO: ... you know, like my dad, removing the radio, if he could, they are getting rid of a lot of stuff that were routine add-ons. Is that true?

ANWYL: Well, I think we're seeing a real sort of focus on pragmatism. So, people are looking -- if you need to be buying a car, people are looking for value. That's one of the themes that we see this year.

During the clunker program, the value segment was the most popular. Hyundai, for instance, has had a big success story all year. They have really focused on value for many, many years.

CAVUTO: That's right. That's right.

ANWYL: So, there is a real pattern here. And that is when the people if they have to buy a vehicle, they are trying to be very pragmatic, be very prudent about it.

CAVUTO: And all of the stuff you said would happen as well. Jeremy, thank you. Always good having you on.

ANWYL: Yes, it's my pleasure.

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