03 September 2009

(LOTSA) CASH FOR CLUNKERS

Not for the dealers anyway. Dealers' stock of used vehicles, as common sense would have dictated, is down nationally, according to the CASH FOR CLUNKERS FACTS website. For those of you who don't know, used vehicles traded in under this program must be crushed or shredded, completely destroyed. Therefore, lower income people have fewer vehicles to choose from, and what's left cost more because of this program. (Cash for Clunkers Facts,"Dealers are looking for used cars for their lots since inventory levels are depleted and auction prices have risen.")
This site has a forum for people to post comments about their experience with the Car Allowance Rebate System (CARS aka Cash for Clunkers). One commenter, Karen Brooks, posted on September 3, 2009, the following: "Very disappointing. My car just blow a week ago and I can’t afford one of those new cars. It is very upsetting that they are not selling the perfectly good cars to the lower class that can not afford the outrages prices of used or newer cars.. Very Very upsetting to me and I am sure to a lot of people in my shoes.. Who ever thought of the idea sure didn’t do their homework for now the dealers are sitting with good cars and have cash paying customers that would buy and need cars like that waiting on the goverment to pay them for those cars. That I am sure have many years and miles to go on them. Will not go to a dealer again for any kind of car nor will my family purchase a new car again. Used dealers that still care and have decent prices are going to be getting more business now which they should for they are still for the lower class people!" Very well said. No one in Washington can fathom being lower income apparently. But, that's nothing new.
And the dealers? Many still yet to be reimbursed for the credits of up to $4,500 per vehicle. According to an Associated Press ARTICLE by Ken Thomas posted September 3, 2009, payment is now being promised by the end of September.
And the cost to YOU and ME? A cool $2.88 BILLION dollars for 690,114 vehicles. That works out to $417,322.36 per vehicle. What were they, Lamborghinis? No, this is just an example of what happens costwise when the government gets into anything, especially private enterprise (and you STILL want these same people handling your health insurance??) The cost does not end here. This figure does not include the cost of increasing the number of people reviewing the paperwork to 5,000. No telling what the final "bill" to John Q. Workingman will be. Not that this is really a drop in the bucket compared to the record trillions of dollars already spent by this administration in far less than a year.
Like some authors of some articles I have read recently, I wonder if this program hasn't created a small bubble that will soon burst, or at the very least deflate leaving the car makers right where they started. See this ARTICLE in the Boston Globe that starts off, "The nation's automakers are bracing for quieter showrooms and slower sales this autumn after the case for clunkers program offered a big but unsustainable boost in August." I also wonder how many vehicles sold under this program will be repossessed because of people racing to buy vehicles they couldn't really afford. Maybe deja vu on the current home foreclosure mess caused by the government? And what about charities that take used cars? This amounted to a lot of vehicles, some of which would have undoubtedly gone to charity if C.A.R.S. had never existed.
There's a good analysis of C.A.R.S. on EXAMINER.COM by Kevin Ellis. When you read it, overlook the spelling though (pet peeve of mine - why don't editors proofread anything anymore? Most newspaper articles these days are loaded with grammatical and spelling errors.)

5 comments:

Alan Defugue said...

THANK GOD SOMEONE IS SPEAKING THE TRUTH WITHOUT WORRYING ABOUT BEING POLITICALLY CORRECT! THIS IS AWESOME!!!!!!

Heli gunner Tom said...

I have two vehicle payments with one almost payed off. I doubt if a dealer will give me anything worth my Caravan, so I will pay it off first and sell it myself. I have to do my own research and home work because I don't trust a car salesman... lol.

Tom S

Matt said...

Great post. I like how you laid all of the information out there.

natalie said...

hi Dirk
interesting article!
I hope you are well...
please come by and post a comment on my blog about 9/11 heroes
hugs,natalie

Lisa said...

Thank you Dirk. This is the first article I've read about the cash for clunkers deal that explains it all so well. Very helpful information.
Lisa in Kentucky