Cash For Clunkers

[Angio333]

Did this program upset anyone else?

It is just another example of the government siezing money from people and giving it away to others.

[maat55]

That is exactly what it is. It is government rewarding some at the expense of others on borrowed money. It is also dangling a carrot that many may not be able to afford with sound judgment.

Just like the 8k for houses, it temps possible unworthy buyers into debt that may loose their job and do not have sufficient EF's. Our government is perpetuating the same bad sense that got us where we are.

[disneysteve]

It is also dangling a carrot that many may not be able to afford with sound judgment.

This is what bothers me. People are buying new cars when they don't really need to simply to take advantage of this "great deal" being offered. I'll admit I even thought about it myself. My car is 12 years old so it has occurred to me that this might be an ideal time to replace it, but then I remind myself that there is nothing wrong with my car and if not for this offer, I wouldn't even be considering replacing the car.

[watsoninc]

This is what bothers me. People are buying new cars when they don't really need to simply to take advantage of this "great deal" being offered.

I agree wholeheartedly. If you are not financially fit, the last thing you need is more debt. Why are people so willing to get over-extended, and why is the government aiding this dysfunction? It sad to see the same missteps repeated again and again.

[MonkeyMama]

I wasn't thrilled, but then I heard the cars traded in have to go to the junk yard. This is supposed to be an environmental bill. Yeah, makes a lot of sense.

well, let's call it like it is - it's a bill to help the car manufacturers. They just slapped on the mpg requirement to appease the environmentalists or something. I call BS.

[Joan.of.the.Arch]

Even if I only think about what is the more ecological thing to do (note the slight increase in mpg they were aiming for), it is hard for me to believe that we come out ahead with cash for clunkers. All that energy and material that goes into retrieving the raw materials for manufacture, then the manufacturing itself, then the transporting of the new car to its destination....will we really have polluted less? The "clunkers" had to be running to be eligible, didn't they? And now they will be scrapped.

(I have a similar problem with replacing my major appliances which are still working, and no one would be subsidizing those.)

Plus, now are the car dealers going to have a new major lag in sales, since so many people who might have bought a new car in the next year or two all just ran down to the car lot between Monday and Friday this week to do it? Maybe the sales just got concentrated into a 5 day period instead of two year period.

So what good really comes of this?

[poundwise]

You can't afford not to!




The CARS program, a.k.a. Cash For Clunkers, is practically worthless in terms of providing benefit to the consumer. It is mainly a help to car dealers and auto manufacturers.

For the consumer, what you get, in terms of net benefit, is a maximum of around $5,000 ($4,500 plus 'scrap value'), less the actual value of your vehicle, applied toward a new car, which will depreciate at a rate of at least 57% over the first five years (that is the rate of the vehicle currently ranked as best at holding its value) with most of that loss over the first three years.

I say, 'less the actual value' because you would get that amount anyway, without the program, if you were to sell your car. So the program only benefits you above that amount.

Mainly, people will use this as an excuse to buy a new car; telling themselves that it is a good deal.

If the government were serious about removing these 'clunkers' from the road, it would let you apply the program to any late model vehicle that meets the efficiency guidelines, not just brand new vehicles.

[Scanner]

I don't know. . .I am withholding snap judgment on this. The latest GDP figures were out yesterday and the rate of economic contraction has slowed from -6% to -1%. Okay. . .may have it happened anyway without the stimulus? Perhaps. And a negative number is still a negative number so nobody is shouting whoopee, most of all me.

What's the alternative? President Bush just sent money out in the form of tax rebates. . .Joe Schmoe and Sally Snow are just going to go spend that on tatoos, Coors Light, and a pack of Malboro Lights. At least this is directing consumption somewhat (to ultimately lead to non-consumption of oil).

Whether we would have teetered into a Depression without this kind of stuff. . .I don't know.

This is why I support VAT (value added tax) so much. It would make more sense to tax a gas guzzler and lift the VAT on a fuel efficient car to direct consumption and stimulate spending, if that's the cure for everything.

Which I think that is the crux of the problem. We are changing away from a consumption oriented economy to a value oriented economy and I don't think there is any going back. Sure, people will buy a little (I have thought about it too). . .but after the program ends, people will go back to value-based decisions with regards to their personal economics like DisneySteve just illustrated. And even if they aren't able to reason it out like DisneySteve, lending companies are forcing it on people. I don't think you can just walk into a dealership and sign on the dotted line anymore, or if you can, that will become less and less the norm. The days of Americans just going to Walmart and buying plastic gnomes for their lawn as a basis for an economy are coming to a close - mindless consumption.

[zakity]

I am not impressed with it at all.

[GREENBACK]

I'm somewhat concerned about many of the decent cars being scrapped. I've heard many of these "clunkers" aren't in that bad a shape. Will this decrease the availability of decent used vehicles, thus, driving up the price.

[shultice24]

I'm somewhat concerned about many of the decent cars being scrapped. I've heard many of these "clunkers" aren't in that bad a shape. Will this decrease the availability of decent used vehicles, thus, driving up the price.

I definitely think that's part of the hidden agenda. Every working vehicle that gets destroyed artificially increases demand for all vehicles. A clever way to cover their downsides in their investments in the American automakers.

What's another couple billion dollars on the federal deficit? Everything about this program disgusts me.

[disneysteve]

I have a similar problem with replacing my major appliances which are still working, and no one would be subsidizing those.

I've struggled with this one, too. A while back, my cousin had to replace his refrigerator. It was about 17 years old. When he got his new one, his monthly electric bill dropped IN HALF (he's single and lives in an apartment, so not a high utilizer outside of appliances). That savings will pay for the new fridge in less than 2 years. Our fridge is over 15 years old. Our freezer is about 17 years old. I'm sure replacing each of them would save us a fortune. I just can't bring myself to get rid of appliances that are working perfectly well. Of course, I could sell them on craigslist and that would make the break even point even sooner. That's probably what I'll ultimately do.

If the government were serious about removing these 'clunkers' from the road, it would let you apply the program to any late model vehicle that meets the efficiency guidelines, not just brand new vehicles.

That's exactly what I thought. Like I said, my car is 12 years old. I would think more seriously about replacing it if I could do so by buying a 3 year old model and getting this $4,500 rebate.

[GREENBACK]

Another thing I heard and believe there's truth to it is that the vehicle can't have a gross weight over a certain limit and the Ford F-150 and expediton(I think it's the same chassis) surpasses it which disqualifies them for the program. Oddly enough, no passenger vehicles by Chrysler or GM(that took bailout money) surpass this limit. Interesting.

[shultice24]

I'll really be laughing my pants off when Honda and Toyota come out with really boosted sales figures because of this program. If it's the right time to do so, what a perfect opportunity to downsize to a reliable, efficient compact car. And since Honda and Toyota make the best small cars on the planet, they should get some good business out of the deal. Of course, Washington would probably prefer if Cash for Clunkers would be eligible only on Government Motors and Chrysler vehicles.

Disclaimer: I'm biased because I own an awesomely-reliable and efficient Civic.

[Thrif-t]

I'll really be laughing my pants off when Honda and Toyota come out with really boosted sales figures because of this program. If it's the right time to do so, what a perfect opportunity to downsize to a reliable, efficient compact car. And since Honda and Toyota make the best small cars on the planet, they should get some good business out of the deal. Of course, Washington would probably prefer if Cash for Clunkers would be eligible only on Government Motors and Chrysler vehicles.

Disclaimer: I'm biased because I own an awesomely-reliable and efficient Civic.

Well this program works great for us. We have a 3rd recreation vehicle a 1985 Chevy Conversion van that we will get the 4500 for. We wanted to buy a Honda Odyssey found one, signed a buyers agreement, waited a week for them to get validated for C4C . When it finally happened the program ran out of money and the dealer called us up and said they're not going to participate in it because of the inefficiency of it and the pain in the butt factor for them. And actually there are quite a few Honda dealers in my area who have opted out of the program. Our van runs fine but at almost 25 years old but only 77k original miles we just don't trust it to travel in anymore. Oh and we have cash so win win for us. I figure if my taxes are going to go up anyhow to pay for this program I might as well get something out of it. I guess I'll have to start looking again, but right now I need to recharge from the roller coaster of emotions I've been on this past week :-(