Cash For Clunkers

There are plenty of opinions about the Cash for Clunkers program. Now here's mine. I think the program as it is doesn't service the American Economy as well as it could. In fact there are some definite negatives. It has taken on more transactions than it could handle and has dealers' requests backed up to the point that some are sending things through three or four times with no response. Plus it takes a while to determine a "clunker". Sure the commercial says 1984 or newer, has to get certain gas mileage but there is a 136 page booklet of requirements that must be met. Now getting people to buy new cars and bring business into car dealerships is a positive for the auto industry, or should I say the new car industry. While this program does help sell new cars, it deals a blow to the used car industry which is where most dealers make most of their money anyway. It's taking all these used cars, of which most are perfectly good, running cars, and removes them from the market all together. Think of how many people can't afford a new car and would find one in the "clunkers" that are being destroyed. Also think of the revenue it's taking away from the dealers that could resale those "clunkers" to someone who isn't in the new car market. Another thing is that the parts from the "clunkers" can only be sold for up to six months after the date of trade. That is hurting the used parts companies and wreckers that get to demolish the cars but then can't sell the parts for more than six months. The final problem I have with this program is that the engine must be completely disabled by draining all the oil and filling the engine with sodium silicate which will render the motor permanently unusable. That same motor is then sold to China. They take that metal and resource and manufacture their own products which we are going to buy from them in the form of something else in the future and believe me, we are not going to settle our debt to China by selling them used car engines. I think they are using the green movement to promote this when our biggest problem is our own economy. Sure this program is taking cars off the road which don't get impressive gas mileage but it's such a small percentage that it won't have an impact on the global warming myth that everyone is freaking out about. Besides, you can trade in a car or truck under this program for something that gets just 4 more miles per gallon. Now there's a lot of people who traded in their old car which was paid off for a new lexus in which they couldn't afford without this $4500 rebate. How many of those people do you think will still be making the payments once they lose their job or some small unexpected expense comes up? Seems similar to when we gave people loans on homes that they couldn't afford if the rate changed (which it did). But who cares about that since these loans aren't for $200,000 plus. The dealers won't feel the sting when that happens but the banks that hold the titles to those autos will. Sounds like the Government is doing nothing but giving away more free money to add to our astronomical debt and taking perfectly good used cars off the market at the same time. The only thing that the success of this program proves is that the American people like getting free money. It's still not clear if this program will get another 2 billion dollars to continue since it did run out of money in less than a week but i'm hoping it doesn't. Let's not get overly excited about some program with a ton of stupid rules which did so "well" that it ran out of money early. Success is going to be judged by the effects this program has on the next 5-7 years.

Thanks for reading.