I hope that the Senate doesn't pass the additional $2 billion up for vote this week for the Cash for Clunkers program. Despite the "incentives" provided for trading in your old car for one that gets better gas mileage, this program is not designed to benefit either the consumer nor the environment. Cash for Clunkers, or CARS, is designed to benefit the automobile industry at the consumers' expense.
When I first heard about the program, I was genuinely excited. I couldn't wait to get in line to trade in my clunker and receive a $3500 -$4500 voucher for use toward purchasing a new vehicle. Then I did a little homework. I discovered that in order to qualify for the voucher, one has to buy a brand new car, not just a newer model. Unless you have a cool $20k laying around, that means saddling yourself with tens of thousands of dollars of debt. How is that benefiting the consumer? Its not. As a nation of persons facing massive unemployment rates and debts and mortgages we can't keep up with, I think we've learned first hand the dangers of overextending our credit.
And get this- no matter what condition your older gas-guzzling vehicle is in, it's going straight to the crusher. A condition of the program is that you agree that your vehicle will be scrapped. Even if you trade in a relatively new car in decent condition, shebang. How does this benefit the environment? It doesn't. One could argue that by getting that old gas guzzler off the road, we are effectively using less gas and thereby saving the planet. But crushing a perfectly good car is a waste of resources when you think of all the materials that went into making all of the components for both of those cars, inside and out. Not to mention the amount of fossil fuels used to ship all of the various components from around the world to the manufacturers.... Cars don't grow on trees, you know.
So if this program is not benefiting either consumers or the environment, what is it good for? Its good for pouring billions of dollars directly into the automobile industry- while funneling more money that way in the form of naive consumers who think they are doing their part to save the planet, reduce reliance on foreign oil, and help out their pocket books. I would rather see us funnel billions of dollars into better public transportation that could reduce traffic, emissions, and our reliance on oil. Cash for Clunkers is just another big industry bailout, and I'm not buyin' it.
Good post, but I think you're taking certain things for granted in your rationale.
ReplyDeleteI think the program is for people who are thinking about getting a new car, and the extra cash just is an added incentive to get them over the line. If you don't have 15 to 20K laying around, or the ability to pay it back, then you shouldn't be thinking of buying a new car.
Regarding the thing about over extending credit is semi valid, because regardless of this program irresponsible people will always over extend themselves. 3-4k in a 20+K is not that big of a deal for irresponsible buyers.
The green incentive of the program is completely secondary in how I see it and just mentioned because we all know how cool it is to be green these days.
I'm buying the program because, as grim as it may be that we need to support these private entities, they are the ones that can rehire all the people that are laid off. Only then we people can eat again, should we think about fixing everything you said in your last paragraph. We can't think when we're hungry, because our main goal is to survive.
Gabriel.
meant to say "3-4K in a 20+K purchase"
ReplyDeleteThank you for your common sense posting, I wish our members of Congress thought as you did.
ReplyDeleteI completely agree with you. They are just printing more money that is increasing the inflation of the dollar.
ReplyDeleteAlso... about 75% of the cars that qualify for sale are FOREIGN brands! Honda, Kia , Hyundai.
ReplyDeleteThis is such a junk program.
Gabriel, the government does not need to giving any money to the private sector! Big government is bad.
ReplyDeleteThe car doesn't have to be completely destroyed, only the engine and drive train. The rest of the car can be sold and parted out. The engine and drive train can be recycled for scrap. As I understand it, this it to keep the program from being abused. If you didn't do this what is to stop a dealer from receiving a clunker then reselling it, only to have that clunker end right back up in the cash-for-clunkers program.
ReplyDeleteI don't think your argument about the 2002 Blazer works because no one is going to trade in a car worth $8 or 10K to get a $4,500 incentive. So only cars that are worth $3000 or less will be traded in. Most of them really shouldn't be on the road. I would be for reselling for parts, but not for general reselling for value.
ReplyDeleteI considered trading in my 96 minivan that I paid $3200 for 3 years ago. It runs fine. If the program had started 2 months earlier before I spent $1100 fixing the air conditioner I might have bought a new car. But since I only drive 10K a year it doesn't make sense for me.
It isn't entirely accurate to say vehicles are going to the "crusher" once traded in - it's ont like the vehicles are just being thrown away. Almost everything except the engine is salvaged or recycled.
ReplyDeleteTime - What Happens to the Clunkers Traded In?: http://bit.ly/3HJ25M
(p.s. What's up with the comment box not allowing copy/paste?)
@Justin if government didn't have to give money to the private sector you wouldn't have the internet access that you need to post your comment. Please don't use blanket statements as they add nothing valuable to a conversation.
ReplyDelete@Moose the choice resides with the customers. People would be complaining if the government made the program US brand only. Also these foreign brands hire American workers so I don't particularly see a problem. No intelligent consumer that care about his pocketbook would buy a car that was worse simply because it was American.
Nice job, Emily. I believe you hit the salient points. I'm a little leery myself of any program where a perfectly good car falls under the descriptive fast-sell of "clunker". Words mean things, and they give us clues. They're often manipulative terms to make a situation seem something other than what it is. It's similar to the government telling us that the lottery should only be used for entertainment (wink, wink). Yeah, sure, everybody does that. It's also reminiscent of how the government cleverly defines where the line of poverty is in order to suit their contrived demographics.
ReplyDeleteThink about it... the government wants to convince us that our current vehicle isn't good enough. Turn in your clunker, they say, because we all know clunkers are no good. Isn't that something a used car salesman would say?
This is a manipulative incentive program, plain and simple. Something enticing is being dangled in front of us in order to get us to follow a path we might normally not be inclined to. Should we be suspicious? Of course. Don't the politicians have our best interests at heart? Oh, sure they do... way down the list after their own.
Also, isn't it just a little disconcerting that the projections for the duration of the program were off by a factor of 30? That's an indication that not much planning or research went into this decision, other than social and psychological. But if their had truly been economic planning, they would've had a better handle on the outcome. This is the way the government tends to operate. It's a sell, and we're all being sold. We can settle for their short-sighted proposals or we can come up with ones that will do more on the level where it needs to help.
Nice, Emily! My biggest heartbreak with Cash For Clunkers is that the guidelines for increasing fuel efficiency are nothing short of embarassing--the requirement is that new vehicles exceed "clunker" gas consumption by only 2-4 mpg! Granted, one comes closer to gaining the full $4500 rebate with higher new vehicle mpg ratings, but new vehicles with minimal mpg increases will still be subsidized through the program. What a lost opportunity to truly reaffirm our nation's commitment to reducing greenhouse gas emissions, and to revolutionize how we define fuel efficiency.
ReplyDeleteThe intent of the government is not to assist the public but rather to assist the agenda of perpetuating public debt and reliance upon the government.
ReplyDeleteThis was/is a scam as we have seen.
Great post