The Auto Writer

Looking very much like the old lady who lived in the shoe's boot-shaped house, the Smart Fortwo is the tiniest of all cars plying America's highways. Just remember: no matter how hot it may be outside, come winter your little Fortwo will just love to play in the snow.

When the Penske Auto Group won the rights to become the exclusive US distributor for Smart, Daimler’s diminutive car line, interest in the two seat people mover was strong. Smart made it easy for people to reserve a car, accepting $99 refundable deposits from interested customers. By the time the first Smarts were made available to the US public in January 2008, a backlog of six months or more was being reported.

Last summer, as gas prices surged past $4/gallon, the 41 mpg (highway) Fortwo flew off of dealer lots almost as soon as they arrived from the port. When 2008 came to an end, 24,622 Smart Fortwos were sold, a few thousand vehicles more than what Penske and Daimler had originally expected. To celebrate, Penske announced that the distributor would pay for the planting of 24,622 trees in the Cache River State Natural Area in southern Illinois.

Sales Fall Like A Rock In May

Lo and behold, sales of the Smart Fortwo are way down for 2009, forcing Smart USA to do the unthinkable – offer buyers an incentive. Nope, you won’t get cash back on your Fortwo but you can receive fixed, low-cost financing of 4.2%. Yes, the model that was flying off of dealer lots last summer is languishing on these same lots today, with sales down 56.6% for May 2009 and down 15.8% for the year.

The 4.2% rate may not seem like a big deal in these days of 0% financing and thousands of dollars of cash being left on the hood. But, the rate is at least three full points below the average new car loan rate for the consumer with good credit. Given that the base model retails for about $12,900 you should still want cash back? Puh-leeze – don’t be greedy.

Buyers Leave ‘Em Behind

Not too many analysts seem surprised that interest in the Fortwo has declined in the face of falling oil prices. Quite a few folks who reserved a Fortwo decided not to go forward with their purchase, canceling their reservations and leaving hundreds of Fortwos orphaned.

So, if you want to adopt a Fortwo and get a decent financing rate, you better do so before gas prices climb and demand for the little two seater rises with it.

Source: Smart USA

See Also – Daimler To Offer Smart Rentals On The Go