CARS program

[david austin]

Curious what people think of the cash for clunkers program.

Although I think it might be the best guided money spent in a long time... my likes and media praise of the program end there

[SeedfulMusic]

I agree. Even though the Cash for Clunkers is still a stupid idea in some respects, I find that its been the most beneficial program thus far for those who truely deserve it, and are the ones funding all this frantic spending.

[J. Fees]

what is the downside to it? im seeing that they are going to end spending 3 bil most likely, but that seems like a fairly low number. im sure there has to be some cons, what are they?

[molecule]

it's government spending money they don't have

like Fannie and Freddie did with homes, this potentially is yet another government program that encourages people to get in over their heads financially. better to drive a clunker than buy a new car and default on the payments eventhough you got a 4K rebate.

i don't hate the program, but you asked for some cons.

[Ash]

think it's a great idea to kick start the economy, especially the automotive industry. it means banks will lend money again.

[J. Fees]

just wondered, i guess thats true, and you know car salesman are going to try to upsell to the fullest. i did notice that it applies to cars up to 45000, so i guess you could get in some trouble if you went all out.

[zerojunkie]

Originally Posted by molecule

this potentially is yet another government program that encourages people to get in over their heads financially.

That's my biggest issue with it. You can only apply it toward new car, afaik, and we all know what a colossal waste of money buying new is. The premise of getting inefficient cars off the road is a good concept though, but it should be able to be applied to used cars that are more fuel efficient.

[david austin]

A few bullets

Some of these are not direct cons but arent what the media is portraying as glowing positives

-Complete fumbling in the downstream pipeline by destroying the powertrain
-Pulling forward more GDP via debt (why we are here in the first place)
-Giving a better metric for the value of a new vehicle purchase... meaning the long term outlook for autos is much lower than expected
-Smaller more fuel efficient vehicles are better in the long run as a whole but the lowest margin autos for sale today... meaning greater sales does not equal a direct improvement of the bottom line
-Tax issue regarding how the vehicle is accounted for through the rebate on the dealer books... leading to potential double taxation issues

There are some smaller issues but those are some of the big ones

[molecule]

other potential problems include,

- will and how quickly will the dealerships be payed back

- ripe for corruption


it would probably get me on the lot if i drove a "clunker" however.

[Keyser Soze]

Personally, I think the moronic ways in which dealers are disposing of the traded in vehicles is absurd. Pouring sand directly into the motor, etc etc etc.

As a taxpayer, I dont like having to foot the bill for others to receive a "discount" on their cars.

Also I dont buy the "big success" bit, as they results can't possibly be true numbers. People knew this program was going to happen(which is why auto sales slumped harder the 2 months prior to the program starting). People who are trading these cars in, would have still done so...eventually. It's not like this program is allowing a window for the poor or less fortunate to obtain a vehicle. The $4500.00...would have little to no bearing on someone trying to land a new car with poor credit, or ability to prove substantial income(credit terms are still going to be into play, as the the final say so on who gets into a new car). I would have liked to seen this program released, with a way for the traded in cars to be donated (to the less fortunate) VS being trashed and videotaped for youtube ala' jackass.

Also a lil lesson of Frederic Bastiat’s essay;

“That Which is Seen, and That Which is Unseen.” Bastiat, a 19th
century French political economist, tells the story of a
shopkeeper who has to hire a glazier to repair a broken window,
providing work and income for him in the process. That’s what is
seen.
What is unseen is what the shopkeeper would have done if he
didn’t have to pay the glazier. He might have bought shoes for
his children, providing income for the shoemaker, who in turn
could buy leather to produce more shoes. The glazier’s gain is
the shoemaker’s loss. There is no net gain, no job or income
creation, from this transaction.

[PETA]

Originally Posted by david austin

Curious what people think of the cash for clunkers program.

Although I think it might be the best guided money spent in a long time... my likes and media praise of the program end there

my uncle looked into it... they offered $X ($4500?) for his car but his options for purchase were limited and more expensive than just replacing the vehicle he has now

[Deff Gordon]

if dealers are pouring sand in the motor to create a clunker... that's fucking just stupid. the vehicle has to be running. had insurance and registration in effect for the past year... and so on.

it's not like you can go to the junk yard and grab some hoopties.

[PETA]

Originally Posted by Deff Gordon

if dealers are pouring sand in the motor to create a clunker... that's fucking just stupid. the vehicle has to be running. had insurance and registration in effect for the past year... and so on.

it's not like you can go to the junk yard and grab some hoopties.

that's racialistic

[david austin]

Originally Posted by Deff Gordon

if dealers are pouring sand in the motor to create a clunker... that's fucking just stupid. the vehicle has to be running. had insurance and registration in effect for the past year... and so on.

it's not like you can go to the junk yard and grab some hoopties.

No... its that they are killing what in many cases is a car in fine working order. Just one that is by government standards a 'clunker'. Which really isnt much considering.

16mpg includes a heck of a lot of vehicles

[Nyteshade]

A better program for the consumer to invest in would be the stuff that gives you tax rebates for energy improvements in the home imo. I got my attic re-insulated and got that radiant barrier stuff put on the underside of my roof last month for about $5.5k and I'll get $1500 of it back next year when I file my 1040. That one will eventually pay for itself, takes no maintenance on my part, and will last much longer than a car.