Cash for Clunkers

[christopher w]

Is it just me or would it make too much sense for a requirement of this program to be that you have to buy a car from an American automobile manufacturer if you are going to be using this program?

[PositiveOutlook]

The argument for this is that the foreign manufacturers cars are made here in the US plants...

Weird though, I just read an article where, after passing ANOTHER $2 BILLION, the interest is dipping...

http://www.reuters.com/article/ousiv/idUSTRE57B09220090812?pageNumber=2&virtualBrandChannel=0

[Bluemoon06]

Cash for clunkers doesn’t make since to me.  You go into a dealership and decide you want to buy a car with a sticker of $30,000.  You trade a clunker and get $4,000 from the government, what does the dealership give?  This looks like car dealerships have slow business, so instead of them giving you $4000 off the sticker of a car, the government gives you $4000 off.  I want the $4000 from the government all the manufacturer’s incentives and $4000 form the dealership.  I think the deal is sitting there like the cat that ate the bird.

[PositiveOutlook]

Group of Dealers Launch Private Auto Stimulus Program...

http://www.foxnews.com/politics/2009/08/06/group-dealers-launch-private-auto-stimulus-program/

[Hoosier4life2005]

You guys know we crush these cars after they're turned in?  IMO this program is a horrible idea.

#1.  Instead of people buying things that maybe they needed (like a refrigerator), they are buying a car because the deal is so good.

#2.  All people were going to need cars eventually, so they are just killing off future sales.  People would have just boughten all these cars in a few years, as opposed to now.

#3.  Crushing these old "clunker" cars after being turned in.  These are perfectly good assets that were just destroying.  My friends dad had a PERFECT OKAY car to drive, but they crushed it.  Were destroying good assets, thats never a good idea..

#4, More government spending, never a good idea, especially in the economy.

[christopher w]

I have read about people that realized after it was too late that they had made a big mistake. If I had a running vehicle with no car payment I don't care how much the Govt. was giving me I would drive that sucker into the ground. While it may be stimulating the economy a bit it is also putting people deeper into debt.

People think it is a great deal. What they don't realize is that the dealer probably would have given them a decent chunk of change for the car anyway because they need to move product. Now instead of the dealer biting the bullet it is the US taxpayers that are biting the bullet. I am sure dealers are loving this.

[PositiveOutlook]

On the flipside, from what I've read, the USED car market is costing people MORE (10-15%) money now because they are destroying these cars...

With alot of low-income families credit being trashed lately, do you think they are buying new or used? 

[Hoosier4life2005]

Seems like we all agree that this program has alot of downfalls to say the least.  Why cant the gov just stay out of stuff like this?  Unbelievable.

[christopher w]

There are plenty of SUB-PRIME car lenders out there. Check out Drive Financial. 18-25% interest rates.

[PositiveOutlook]

That's kinda my point... they now will get hit with a higher cost for the sub-prime loan along WITH an increased cost BECAUSE of the used inventory shortage due to destroying these trade-ins..

[sellnbama]

I've heard alot more negative from dealers than positive.One ford dealer is into it for $150k and is having a hard time getting rembursed by govt(imagine that).I also foundout if the customer has any judgements or due taxes,the dealer has to settle that before they pay also.Just like obama said yesterday -UPS and Fedex are doin fine,it's the US post office that's goin down.Said while trying to convence you to go govt!!??(teleprompter desparetly needed)

Just like always,whatever they touch they screw up.Just imagine when you're hurting dealing with these einsteins for your healthcare.Back to the topic,cash for clunk is to force cars the govt does'nt want you to have off the road.

Christopher,
Could'nt agree with you more on the car note.Me & my wife don't have any and never will.Paid for is the only way for me.     

[Bluemoon06]

Just like always,whatever they touch they screw up.

Just like the military, or the interstate highway system, or air traffic control, or the internal revenue service, or ...

[PositiveOutlook]

Bluemoon06,

"Just like the military, or the interstate highway system, or air traffic control, or the internal revenue service, or ..."

From a service standpoint, the military is a great system... the Bureaucracy makes it inefficient as an organization and leads to cost overruns...

If you are going to hold out the interstate highway system as an example of something they don't screw up, I can't help you there...  But to put it into perspective for you...

"Although construction on the Interstate Highway System continues, I-70 through Glenwood Canyon (completed in 1992) is often cited as the completion of the originally planned system.[12][13] The initial cost estimate for the system was $25 billion over 12 years; it ended up costing $114 billion (adjusted for inflation, $425 billion in 2006 dollars[14]) and taking 35 years to complete.[15] Additional spurs and loops/bypasses remain under construction, such as Interstate 485 in North Carolina." - Wikipedia

Get that, the initial cost was $25 BILLION over 12 years, and ending up costing almost FIVE TIMES at $114 BILLION and took THREE times as long at 35 years!

EXCELLENT EXAMPLE of screwing up whatever they touch... and people think that healthcare has ANY CHANCE of costs coming down... they are talking about it being "revenue neutral" now, so you KNOW it will either cost MUCH MORE or services reduced... 

Air traffic control?  Don't know enough about it...

I honestly can't believe you cited the Internal Revenue Service...    LOL... 

[justin0419]

At our staff meeting (military) yesterday, one guy asked the finance lady if we had any money left for the fiscal year.  She said yes.  He asked if we don't spend that, does it go back to "entity X."  She said yes, so we'll spend it so it doesn't get taken away.  This is just one of many problems with our military finances.  Each command is allocated a certain amount each year.  If they spend that amount, they'll likely get the same amount next year.  If spending dips, they'll likely have a cutback next year.  Items purchased on govt contract cost many times more than what you could buy on your own, but you're not allowed to purchase things from just anywhere.  It's common knowledge that govt contracts are big bucks for people.  If the govt is involved, you can expect the price tag to be much higher than normal. 

ATC is undergoing some changes.  There's a big push to force people to navigate using GPS rather than current navaids (TACAN, VOR, VORTAC).  So a few years from now, pilots will likely be flying direct to destinations rather than flying on airways (which are nothing more than highways in the sky) which will save tons of gas overall.  Some people already fly direct, but no Navy plane I've flown so far is legally allowed to navigate by GPS.  GPS is a tool for us, but not legal for instrument navigation.

[Bluemoon06]

Bluemoon06,

"Just like the military, or the interstate highway system, or air traffic control, or the internal revenue service, or ..."

From a service standpoint, the military is a great system... the Bureaucracy makes it inefficient as an organization and leads to cost overruns...

If you are going to hold out the interstate highway system as an example of something they don't screw up, I can't help you there...  But to put it into perspective for you...

"Although construction on the Interstate Highway System continues, I-70 through Glenwood Canyon (completed in 1992) is often cited as the completion of the originally planned system.[12][13] The initial cost estimate for the system was $25 billion over 12 years; it ended up costing $114 billion (adjusted for inflation, $425 billion in 2006 dollars[14]) and taking 35 years to complete.[15] Additional spurs and loops/bypasses remain under construction, such as Interstate 485 in North Carolina." - Wikipedia

Get that, the initial cost was $25 BILLION over 12 years, and ending up costing almost FIVE TIMES at $114 BILLION and took THREE times as long at 35 years!

EXCELLENT EXAMPLE of screwing up whatever they touch... and people think that healthcare has ANY CHANCE of costs coming down... they are talking about it being "revenue neutral" now, so you KNOW it will either cost MUCH MORE or services reduced... 

Air traffic control?  Don't know enough about it...

I honestly can't believe you cited the Internal Revenue Service...    LOL... 

You have to admit that all these government systems are very good at what they do.  Your argument seems to be that they are not cost efficient.  That is not what they were designed to do.  You can run a military cheaper, but that is not its purpose.  Its purpose is to kill people and break things.  They do that the best in the world.  You can build a highway system cheaper (Mexico) but the US interstate system gets you to anywhere in the USA without a map, falling off a cliff or a flat tire.  The internal revenue system gets you to pay them 1/3 of all the money you make every year.

Let me add the post office to that.  The post office is one of the best run organizations in the world.  It delivers mail to every address in the USA 6 days a week.  It looses over 5,000 letters a day, but it handles ½ billion items per day.  That means that it loses less than 0.001% of the mail that it touches.

The government was never intended to be frugal, that is what insurance companies do.  That is why they are marvels at denying claims and they are masters at collecting premiums and are super creative at finding ways to not pay a claim.  Their function is not covering you for catastrophic loss their function is to produce a profit.  The government’s purpose is to provide service not produce a profit.  That is why if you need to get on welfare, they will get you on welfare with the procession and speed of a gazelle. 

I agree that the government is very difficult to deal with unless you are a perfect match but it always does with it was designed to do very well.