THE BLOG
03/05/2009 05:12 am ET Updated May 25, 2011

Auto Dealers Critical to U.S. Economy

If the new administration does not include a stimulus, not a bail out, for the retail auto dealers in this country any economic stimulus package will fail.

Retail auto dealers are critical and vital to the survival of this country's economy, even more important than the auto manufacturers. While the manufacturers have been given most, if not, all the attention, the reality is if your local auto dealers don't survive and prosper the manufacturers will have no need to build product. Auto dealers are asking for a bailout, but they do need a stimulus to encourage consumers shopping.

Auto dealers, are some of the largest employers in this country, providing health insurance, retirement plans and above average income jobs and very generous compensation programs. In addition to jobs they generate tremendous and much needed retail tax income to the cities, counties and states with some municipalities receiving as much as 30% of all tax revenue from auto sales. Newspaper, TV and radio advertisers are dependent upon the dollars auto dealers spend to fill their papers and ad time. Auto dealers represent main street America and contribute greatly to Middle Class America's opportunities providing managerial jobs, mechanics, technicians and sales positions. These basic jobs range from minimum wage to very high paying management salaries including bonuses and commissions providing for incomes at the middle class level that would not be otherwise available with many dealers offering ownership opportunities.

In 2008, 128 car dealerships closed in the state of California while registrations of new cars and light trucks declined 23%. In some cities it is believed that up to 30% of all city tax revenues comes from auto sales!

It is vital to every American in this country and to our entire economy that auto dealers are provided with immediate stimulus in order that they are able to stay in business and continue to move their products into the marketplace. Without auto retailers the manufacturers and parts suppliers and others dependent upon the auto industry are doomed to fail because without product being moved into the marketplace (consumer's driveways) the product built by the manufacturers will not be bought and bailout dollars will be wasted. You can take all that money promised to the manufactures and throw it into the sewer if your local retail auto dealer is not included. Without car dealers selling cars and collecting tax dollars schools, hospitals, police departments, fire departments budgets and local budgets will all suffer.

Auto dealers are some of the best and most basic examples of the entrepreneurial spirit demonstrating that Americans can still make it in this country if they work hard. Many of these men and women have their entire estates tied up in their businesses with generations of families servicing their communities for many decades. As auto dealers prosper or fail so does the economy. As auto dealers succeed or fail so does the manufacturer.

New car and truck dealers should be provided with immediate federal tax credits for any and all new car purchases for the entire year of 2009. This is not a bailout like being asked for by the manufacturers and will not cost the American taxpayer anything. The government must stimulate the consumer in both the automotive and housing sector. Temporary tax credits should also be provided to consumers to encourage the consumer to get back into the marketplace. These incentives would create a tremendous and practical stimulus at the middle class level pumping much needed tax dollars into the city and state coffers. Without these revenues municipalities,around the country, will further strain the Federal Government. Your local budgets depend on automotive retail tax income to run their cities. There is no city in America that can afford the loss of dollars incurred by the failing of auto dealers.

Whether you like your local auto dealer or not, you, know that your community and the economy, and your financial future depend on the financial health of your local retail car dealers.

Grant Cardone, author of Sell to Survive and Concerned Citizen.