Buy a car NOW!

The hottest topic in the coffee room these days is cars. The German stimulus plan has revived (at least temporarily) the auto industry. The automobile part of the 50b€ plan goes like this: you give up your nine-plus-year-old car, buy a new car and get a 2500€ "scrapping bonus" (Abwrackprämie) from the government. A lot of dealers are also offering steep discount (15% or more is not uncommon, particularly if you pay cash). This means one can get a new car for about 75 to 80% of the ticket price from a year ago. This stimulus plan is so popular that car sales boomed to an unexpected ten-year high (over 400,000 new car orders since the plan kicked in, or 0.5% of the German population is getting a new car). One of the IT support engineers here was so worry about this program running out money that he decided to scrap his decade-old Audi A3 for a BMW 1-series.

The logical question to ask is whether this plan also spurs the market for nine-plus-year-old used cars as well (say you buy a piece of scrap metal for 10€ from Poland, drive it back to get a 2500€ discount for a new car)? Nein, the bureaucrats have already thought about this, and all trade-ins have to be registered in Germany for at least a year.