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Cash for clunkers

2959 Views 18 Replies 14 Participants Last post by  langweishan
Ok, everyone has heard of this right? I don't know the specifics on all this but I think if you bring in an old car, not more than 25 years old and you buy a car with better fuel economy, you can earn up to 4,500.

This is why it pisses me off.....

What about all the people in this country who DO NOT OWN A CAR! What about the people who have been taking public transportation all their life OR people who sell their car for whatever reason and now just use public transport?

So sell your environment killing car for a less environmental killing car, uncle sam will pay you. BUT never pollute...or decide to pollute even less, you get jack squat, besides higher rider fares.

Anyone else with me on this??
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Except that the government ran out of money, the government has not been keeping up with dealers' requests to be compensated and dealers are hesitant to extend the deal to consumers, prices for used cars will go up since the clunker cars have to be scrapped by law, engine parts from clunkers cannot be sold so fixing older cars that people cannot afford to replace will be more expensive, the carbon footprint of making a car to replace a clunker will usually take 5 to 10 years to offset, no stimulus is really happening since this is a transfer of money instead of wealth creation, and this program is creating an auto bubble that will result in a decrease in the purchases of cars for the next 1-3 years. Other than that, though... :|
Cash for clunkers is the best program that has come out of the current stimulus plan. It is direct investment in the industry. It brings old cars off of the road, replaces them with newer, less-polluting cars, and in the process it stimulates the business of the struggling car companies. All of this comes at a relatively low price for the government. It's the kind of program that the stimulus package should be focusing more on providing for the people. It helps people, it helps business, it helps the environment - 3 birds with 1 stone.
Less money spent on repairing cars means less money going to mechanics. They need to make a living, just like car dealers do.

On the other hand, investing in a newer car also has its benefits. It means that consumers will spend less money on replacing and maintaining their cars,
It will also mean that these people pay less on gas.
Actually, we all pay the same amount at the pump, but this is about wording rather than the program. What you meant to say is that these people will buy less gas.

Right now, reducing the burden on the consumer is the best program. And they're also safer, and you could argue that this program could even indirectly save lives (no I would never go "cash for clunkers saves lives, it's a good program!" but it's a fact that new cars are safer).
I agree with reducing the burden on the consumer. But at the expense of others? Reports and articles are now coming out that the government is so slow getting money to dealers (about 2% of clunker money, based on some states), that dealers have cancelled the program. That's the government for you: even when they do something right (assuming one thinks that this is right), they do it wrong. The Wall Street Journal reports that dealers take about a $1,000 hit on each car from their own pocketbooks until they get reimbursed by the government. Smaller dealerships that don't have the large amount of capital or any rainy day money are under threat of going out of business because they don't have the money to continue operating with all of the losses that they took on and haven't been reimbursed for. Is that the kind of stimulus we need?

And sure it may create a "car bubble" but the fact is is that there never would've been car sales to create this bubble in the first place without this program. The benefits outweigh the drawbacks.
Huh? Are you saying that the bubble was created by the bubble or something? Yes, the bubble wouldn't have existed if this program wasn't created; those cars would've been replaced when their "lives" ran out, and the sales would've been spread out over several years. Since they've all been replaced now, that means that several years' worth of sales have been completed, and future sales will be slow. Look for dealers to be hurting in the future and possibly laying of a bunch of people to stay afloat. Also, bear in mind that since this is a transaction of cash from consumers to dealers for a car, there is no stimulus; it's just a transfer of money. A real stimulus would be something that saves money for everyone, like the introduction of a new technology (such as computers making it easier to analyze a project over doing it on paper and thus opening up more time for other jobs).

I don't really support it because of the environmental benefits, I support it because of the benefits it gives to consumers. It reduces the costs that aging cars with low gas mileage put on the consumer. The environmental impact is a relatively minor benefit - I wouldn't really consider myself too much of an environmentalist.
I don't care for the environmental benefits either, but some do, and the trade-ups are really marginal: most of the trades are for similar models, like old conversion vans for new conversion vans, and old sedans for new sedans. There are very few examples of people trading in SUVs or conversion vans for hyrid small sedans. Those delas are the ones with the noticeable environmental benefit. The others really don't do too much (and we haven't factored in the environmental impact of producing the cars yet). Some people, not you, are promoting the environmental benefits, when they really aren't that big.
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