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Fact or Myth: Will Buying Domestic Cars Help the American Economy?

written by: •edited by: Michele McDonough•updated: 3/3/2010

Is buying a car built in American the right thing to do? How does buying American made cars help the economy? Jean Scheid, owner of a Ford Dealership, tells us why buying American is still important.

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    Does Buying American Cars Make a Difference?

    2010 Ford Fusion Hybrid The answer here is a definite yes. As MadeInUSA.gov states, “On the way to work one might complain about how his or her salary is decreasing while at the same time they are driving a foreign car to work.”

    MadeInUSA.gov blames middle-class Americans as the largest contributors of buying non-American built vehicles. While middle-class Americans may be searching for the best deal or price on a car, often buying a foreign car means American workers aren’t even involved in the process.

    Sure, there are many cars made in Canada and Mexico by all of the Detroit Big Three – Chrysler-Fiat, General Motors, and Ford – but foreign automakers that do build in the US aren’t using American part suppliers. Further, foreign executives and upper management don’t hold offices in the US or pay taxes on wages earned in the United States.

    Thomas Klier, an economist for the auto industry told CNN Money that, “American car companies make more cars and employ more workers in the US than do automakers based in other countries.” Some food for thought the next time you’re car shopping.

    The American Autoworkers Union or UAW, have negotiated some of the best labor contracts in years and have agreed to cutting back on certain benefits and including retirement benefits. Thus, some of the impossible wages and benefit packages going to union workers have slimmed, bringing the price of family cars more affordable.

    Image Credit: 2010 Ford Fusion Hybrid/MediaFord.com

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    How Can You Tell If a Car is American Made?

    Cars.com has a list of the most popular American made cars and you can also research how American a car really is.

    Further, every manufacturer, foreign or otherwise, is required to include a breakdown or percentage of how "American" cars are and must post it on the window sticker.

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    But Foreign Cars Are Better Right?

    Are foreign cars better? This has become a widespread idea since Toyota and Honda made their way to the USA with affordable compact cars with desired accessories. Toyota of late has had its problems and it may take years to bring back customer loyalty.

    Even with the influx of Hyundai and Kia vehicles, US automakers have realized what American consumers want and have done a pretty good job in delivering affordable compact cars, sedans, and minivans. Even hybrids are on the rise. Both Ford and General Motors have already made the hybrid leap and Chrysler-Fiat hopes to release American built hybrids in the US by utilizing the designs of Fiat while still being built in the United States.

    That foreign car you might buy may say it’s 50% built in the US, Mexico or Canada, but the other 50% is comprised of parts and technology from overseas.

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    The Global Automaker

    With the economic crisis of late, all auto manufacturers have realized the need for a more global partnership. What this will mean is that even foreign automakers that have plants in the US will hire American workers who pay taxes. In turn, plants based outside of the US that do build American cars will be staffed with American workers who will work alongside the natives of varying countries bringing in more needed dollars.

    Because there are more American workers who produce cars than any other company in the world, it really does make a difference to buy American. States in the US where cars are manufactured are almost void of foreign cars. For example, Michigan, Kentucky, and Ohio are just a few.

    On how buying American made cars helps the American economy, with both General Motors and Chrysler-Fiat closing dealerships, the prices of American made cars will become more competitive from dealership to dealership and manufacturer to manufacturer.

    While buying an American made car may have been your grandparent’s standard, it should become yours as well – especially with new technology, innovation, white-collar level cutbacks, and some of the strongest unions anywhere in the world.

    The next time you’re car-shopping, obtain US financing, find out what the percentage of the car is made in America, and take some test drives. Don’t automatically assume that buying foreign is better. While the wealthy may love their German imports, middle class Americans need to realize that the reason they may lose a job or see massive layoffs at US automakers is because they simply aren’t supporting an American made product.