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Everyone wants their piece of the bailout, and now rental giants Avis Budget Group Inc. (NYSE: CAR) and Hertz Global Holdings Inc. (NYSE: HTZ) are looking for their cut. The House of Representatives passed a TARP reform bill that allows bailout funds to be used by rental car companies and that bill is now working its way through the Senate.The Wall Street Journal reports (subscription required) that "... rental-car companies are struggling to find buyers for their used automobiles -- an important source of revenue -- and secure financing to purchase new ones to replace them."
There's a very easy solution to this. If rental car companies can't find buyers for their current cars or financing to buy new ones, why can't they just use the current fleet for another year? Would anything happen? Of course not. Most rental companies only keep cars for nine months but that number has recently been extended to as long as twelve because of financing woes. What would happen if they kept them for 18 months? Or 24 months? Nothing.
I know: The auto manufacturers could use the boost in sales that comes from rental car orders but if those cars aren't needed -- which they aren't -- taxpayer money should not be used to finance them. Our budget deficit is too big to start using money to spur demand for products that aren't needed.
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Reader Comments (Page 1 of 1)
1-29-2009 @ 4:43PM
BHarrison said...
Well, I am a small business, Sub Chapter S, in the depressed construction industry, so why am I not entitled to TARP monies?
Where are the TARP monies for the small businesses which employ 90% of the workers in the USA???
As usual, the "little guys" are left to struggle through it all on their own.
That's just the "way of the world". We need a political party that represents the interests and perspecitve of the small employers . . . neither the Republicans nor the Democrats gave a damn about the small businesses.
According to government and private industry data, SMALL BUSINESSES account for a full 90% of the employment in the USA. A poltical party for the samll businesses would certainly more truly represent the common good of our society and nation. And small businesses are based on CAPITALISM . . . not government subsidies.