Cash For Clunkers

[Bimmer]

People getting out of old cars into cars with much, much better crash/impact, stability control and other safety standards (more air bags, latch system for kids seats, etc) is better for them and me as a regular commuter. Plus.

Environmental considerations. Plus and Minus. Improves emmissions, but producing new cars has a negative impact as does the disposal of the clunkers.

This program promotes acquistion of debt by people who cannot afford it. Minus.

Funded by my tax dollars. Plus and Minus. Some truly need it, others do not. I do not mind helping the former, the latter is a different story.

What kills me is that they are destroying some perfectly good cars. Why not at least sell them to the junk yards and "pick-n-pull" parts places? The government can recoup some of the money and put some good parts on the market for the DIY mechanics out there who work on their older cars and keep them in tip-top shape. (My impression is the clunkers are totally scrapped: engines destroyed and cars crushed).

[Alex_Adviser]

'Cash for Clunkers' is crackpot economics. The subsidy won’t add to net national wealth, since it merely transfers money to one taxpayer’s pocket from someone else’s, and merely pays that taxpayer to destroy a perfectly serviceable asset in return for something he might have bought anyway. By this logic, everyone should burn the sofa and dining room set and refurnish the homestead every couple of years.

[shultice24]

....and mixing more golf carts among tractor trailors is scary.

That's the one thing I hate about driving a compact, but the fact of the matter is that large, inefficient vehicles are no longer sustainable. Heck, I'm not even so sure it's sustainable long-term for each person to have their own vehicle, no matter how small or what it's run on.

[EEinNJ]

Regarding the scrapping of clunkers, I heard a report on NPR about how it works. A chemical is added to the running engine which causes it to seize. Aside from the drive train, everything possible is recycled. Any usable parts are removed, then the vehicle is crushed and shredded. The steel is easily separated and recycled. Aluminum and other metals are also sorted out, some small percentage is even exported and hand sorted. Very little ends up in a land fill.

[GREENBACK]

Regarding the scrapping of clunkers, I heard a report on NPR about how it works. A chemical is added to the running engine which causes it to seize. Aside from the drive train, everything possible is recycled. Any usable parts are removed, then the vehicle is crushed and shredded. The steel is easily separated and recycled. Aluminum and other metals are also sorted out, some small percentage is even exported and hand sorted. Very little ends up in a land fill.

I know how they do it and you're right in saying it doesn't end up in a landfill. Here's the problem; They're taking perfectly usable vehicles and recycling them. Recycling is great for things that are no longer usable but not for things that still have plenty of usuable life in them as recycling requires an expenditure of energy in and of itself. This program really has no benefit for anyone truly driving a clunker by neccesity.

If you're driving a true clunker it probably indicates that you're not all that flush financially and really don't need a new vehicle of any kind and the possible payments it entails.

[Snodog]

Here's a problem I have with it. You can trade in an 18 mpg car and get a new 22 mpg car, but I can't trade in my 28 mpg car to get a 32 mpg car.

[TBH]

Well, I am not sure how I feel about the program, but I did just check and my car is not eligible. I thought I'd be a good candidate because my car is pretty old (1994) and has an oil leak we have tried and tried to fix. We are planning to replace it this year and we have the cash to do so. We were planning to buy a late-model used car, but I thought, heck, if we qualify for this program it might be worth buying a new car.

But our gas mileage is 23 mpg, not 18, so we don't qualify.

[shultice24]

But our gas mileage is 23 mpg, not 18, so we don't qualify.

That stinks. Doesn't it make you feel good though that your tax dollars (especially tomorrow's) are funding these rebates for others?

[swanson719]

I get a kick out of the surprise that the money ran out so soon. The government was surprised people took advantage of free money faster than they thought? But as others have stated, this really isn't free. The cost of a new car is far higher on payments than used, depreciates quickly, and costs more on insurance. So those who squeeze into payments might not be able to keep the car later. Not to mention it's hurting the scrap yards because they can't salvage the drivetrains, transmissions, or anything else for resale. Which then makes it harder to fix old cars, and creates the artificial scarcity previously mentioned. Just another way to boost sales figures for a gov't run program by using tax payer money. If only your normal corporation could use tax dollars to boost their bottom line, there would be no recession.

[Bimmer]

I also do not like how it is based on mpg only. My old, 150k miles '84 VW Rabbit GTi got a little better gas mileage overall than my new (to me) 120k miles '00 BMW 328i, but there is no doubt the BMW is much more emissions friendly (I've pored over the annual smog/emissions reports for both cars, not to mention the advancements in technology in this area). There are probably trucks/suv's built today that get lower mpg but better emissions than older sedans.

Still, if this program gets some of those rusting hulks whose mufflers, hubcaps and trim pieces are about to fall off away from the roads, that is a plus. So much of the dangerous road debris out there is from parts that have fallen off cars.

I do find it interesting that a lot of the clunkers are domestic products. Not exactly a ringing endorsement to buy new cars from the "revitalized" domestic manufacters...

[GREENBACK]

Still, if this program gets some of those rusting hulks whose mufflers, hubcaps and trim pieces are about to fall off away from the roads, that is a plus. So much of the dangerous road debris out there is from parts that have fallen off cars.

You're missing the point somewhat. It's not primarily getting getting rid of those vehicles. It's scrapping and recycling good vehicles.

[Goldy1]

My problem with it is cars are so expensive new even with cash for clunkers.
Will this create some temporary jobs leading to more hopes and layoffs for people?

[GREENBACK]

My problem with it is cars are so expensive new even with cash for clunkers.
Will this create some temporary jobs leading to more hopes and layoffs for people?

I think it will. Fundamentally, this is a poorly conceived program. It looks good in the short term but all it really does is provide a short term boost to auto sellers and those who recycle cars. When the cash runs out, which it will, they'll start letting workers go.

This is what happens when you have people with no buisness sense running these types of programs. I guess it's mostly political, cause it's scary if they really think it makes good economical sense.

Nobody who dreamed up this stuff has ever run a buisness with a bottom line and workers to pay and and no worries about their cashflow. Bad idea!

[EEinNJ]

Sure, Greenback, let's let the guys running GM and Chrysler on taxpayer money handle it....

Did you forget already they went BANKRUPT?

Of course it's a short term program. It's intent is to stimulate demand, and it's obviously successful. Car sales went down 50%, from about 18 million to 9 million a year. This program will cover a few hundred thousand vehicles- a drop in the bucket. But it will help keep the lights until the economy recovers.

[disneysteve]

I heard on the news this AM that the cash for clunkers program is being blamed for a rise in used car prices. That's just great.