Combine payments, insurance, maintenance and gasoline and you will find that most Americans spend a LOT of their annual income on cars. On top of that, most Americans dont even purchase their cars anymore. To afford the car they want, they lease it, trading a monthly payment that never ends for a lower one.
It is not surprise that car purchases would drop in a downturn. If you have a car, chances are it runs fine and is more than you actually need. You wont need to purchase a new one for a long time.
Nor it is a surprise that such a drop would have a big impact on our country. Cars and car-related services represent a significant part of our GDP.
Here are some photos of unsold car inventory. Something to think about as we ponder a tax-payer bailout of GM and Chrysler. (Don't ponder too much; its a bad idea.)
The supply chain for all manner of manufactured goods is backing up like a train wreck. As customers halt purchases, inventory is pilling up at all levels all the way back to raw materials. Its not pretty.
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