The Problem With Cash For Clunkers
Cash for clunkers sounds like a great idea. It seems so simplistic: I get money for turning in my old car. However, there is much more to this than meets the eye.
Cash for clunkers is another brilliant liberal idea, and by brilliant, I mean brain dead.
Liberals say that if you trade in your old used car, you will receive $4.5K for a new one. It can’t be the basic if it comes out of D.C., so why isn’t the media challenging this piece of legislation? We all know the answer to that one…ask ABC.
There are numerous downsides to this bill:
- If dealers anticipate a rebate for a trade in, they will only increase their base price for the car to make up for it.
-People drive old cars because they cannot afford new ones so how will $4.5K actually help? The down payments that many banks are asking for are much higher due to risk and tighter lending practices. The monthly payments are also tough to meet if you are of low income status. I just bought a new Mini Cooper and have a great credit/beacon score… but because I couldn’t put down $15K on the spot, I couldn’t get a bank loan. I had to settle for the higher rate at the BMW dealership.
-This will also increase the cost of used cars. If more people are trying to purchase new cars, then used car dealerships will suffer and will be forced to raise their prices to make a profit, rather than make a profit from volume of sales. In essence, this will hurt the lower middle class and the poor – the very people he professes to help.
-Charities will be negatively affected by this law. There are over 350K charities that are used car donors. These charities will see a direct decrease in donations if people believe they are getting a kick-back. These charities will have to cut staff and operations, causing more unemployment and fewer used cars for those who really need them.
-The proposed cost of this law would be $4B. This is another “government pays” bill. Therefore, one would think that maybe this is another bill that is circular… The Government will tax you to help pay for your car… why not just pay for it yourself then? All estimates that come out of the government are conservative at best; therefore, you can and should always take on another 50% to the original value.
-Other industries may suffer if there are consumer shifts. Priorities of consumers will shift based on whether they think they are getting a better deal. If cars go up something else will inevitably go down.
-The fact that the Democrats are global warming alarmists happens to be another excuse they will use. They will exclaim that used cars cause more pollution… I don’t believe that in the slightest, so I won’t even touch on it. There is still plenty we do not know about hybrids and whether or not they truly are as effective as people would like to believe. I also do not believe in the hoax or the hype – ’nuff said. Personally, my Mini Cooper’s gas mileage goes up as it gets older…just sayin’ 
-This is another pay-to-play scheme to pay off the $400M campaign donations given to Democrats and Obama by the UAW. If old cars are scrapped, new cars will have to be manufactured and purchased and more money into the pockets of the UAW.
This type of legislation has been tried before, in another country no less:
Germany has used a similar program for a few months, and of course it has actually cost at least three times more than government “estimates.” More than this, studies of the German experience have shown it has largely led to a mere shift of spending priorities. Consumer electronics sales fell in ratio to automobile spending meaning there has been no net gain for Germany’s economy.
It is so interesting and disturbing how Obama and the Democrats have gone after charities and small business. Charities have been attacked on both the stimulus front, the taxable deductions front, and now this idea for clunkers. A study showed that conservatives give more to charity than any other ideological group, because they do so through their churches. These churches are involved in many charities across the nation and it’s quite disheartening to see the Liberals be so antipathetic towards religious movements.
Obama and the Democrats are hell-bent on making people so dependent on the government, and only the government, that they will soon need to get their diapers changed by them too. This is insanity!
I don’t qualify because my car already gets good gas mileage. My dad swears by the car buying process here: http://excarsalesman.typepad.com/ It is kind of similar.
I haven’t tried it yet, but I might because it looks good.
I have a feeling dealers are going to automatically increase prices because of the increased demand (artificial) for lower MPG cars. So the thousands of savings from this bill for consumers is not entirely accurate. The demand will increase prices and you’ll get a voucher from increased prices. I’m certain some markets you’ll come out even as if they never offered this voucher. It is poorly written legislation.