When Congress returns on July 20th, Mitch McConnell expects that a new COVID-19 stimulus package will be on the agenda. The Senate Majority Leader made the comments regarding a rescue package when speaking at a public event in Kentucky on July 6th.
McConnell said, “I can’t comfortably predict we’re going to come together and pass it unanimously like we did a few months ago. The atmosphere has become more political than it was in March, but I think we will do something. The country needs one last boost.”
Of course, what he’s referring to in March is the relief package checks sent out to many Americans in the amount of $1,200. It was established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was intended to assist people experiencing job loss or serious financial impact due to COVID-19, especially those who are in low-income brackets.
This time it’s expected that the stimulus checks would be less than the previous amount of $1,200. Vice President’s chief of staff, Marc Short, explained to Bloomberg Radio last Tuesday that spending needs to be capped. “I think we want to make sure that people that are still unemployed or hurting are protected, but at the same time, we want to take into consideration the fact the economy is bouncing back and want to try to contain the amount of spending.”
Republicans are trying to keep the stimulus package under $1 trillion, attempting to reduce the massive financial burden on the economy from the coronavirus response.
McConnell also expects that this will be the final lump-sum payment sent. “This will have to be the last rescue package, because we now have a debt the size of our economy for the first time since World War II. We cannot keep doing this,” McConnell said.
Numbers haven’t been discussed yet, but the payment amount will be noticeably different, possibly between $600 and $800 per eligible recipient.
More than Financial Security
But this stimulus package will be more than just a temporary economic boost for the disenfranchised. For the bill, McConnell also wants to write in liability protection for businesses and other entities that could be subject to litigation from coronavirus-related problems.
“This is not just for businesses. This is for hospitals, doctors, nurses, nonprofits, universities, colleges, K-12, so that people who acted in good faith during this crisis are not confronted with a second epidemic of lawsuits in the wake of a pandemic that we’re already struggling with,” he said.
What It Means for Auto Retail
After the first stimulus package, car dealers experienced a significant bump in business. Although sales were still down through May, April’s $1,200 checks were a spending boost for car buyers. May 2020’s new car sales figures jumped nearly 400,000 units higher than April, up to 1.14 million vehicles.
With checks expected to be smaller for the second stimulus round, some of the competitive rates and terms retracted by manufacturers, and with sales figures closer to on par, the sales boom will probably be much less exaggerated.
Should a dealership want to entice car buyers when stimulus checks are sent out the next time, they could play on the value when it’s announced. A couple of ideas could be matching down payment amounts up to the value of a check’s value or simply marketing a correlated monthly payment or incentive.
Timing is everything for a well-structured campaign. As such, any dealers who wish to use the stimulus checks in their marketing strategy should begin to establish the campaign now for a timely rollout when it’s announced.
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