Congress funded this 'Cash for Clunkers' program that provides a $4500 rebate to Americans who trade in their gas guzzling car for a fuel efficient model to the tune of $1 billion. The program started this past Monday, and ran out of money today:
http://www.nytimes.com/2009/08/01/busin … rs.html?hp
Congress had to scramble for a way to keep the program afloat. The $1 billion was supposed to last through November, and it evaporated in less than a week.
What do you think of this? Do you think it's because people really can afford a new car? Or is it more like, here's a way to get $4500 which will make the car payments for a year or two and hopefully things will be better by then?
I feel sort of uneasy about it. What do you think?
What is interesting to me is after all of the foreclosures, job losses, repossesions etc. where are people getting all of the credit to purchase new cars again? We kept both of our vehicles because we knew something was bound to go wrong with this program. I am in agreeance with you I feel uneasy myself.
Maybe people don't need credit? Savings, etc?
I think that I was considering it. My car traded in could get $5000-5500 then another $4500 for the program, and I could have gotten a new Prius for $12,000... not bad! I'm gonna go test drive this weekend. We'll see. I really really love my car though. I don't want to give it up
The bitch of it is we bought a 2010 Honda Insight hybrid in June, but we don't own a car that eats enough gas to qualify for the rebate as a trade it in, so we got zippo.
The Insight is awesome, and I've heard the Prius does even better. My sweetie drives it and is averaging 55-62 MPG with the weather being warm.
Yeah, a friend has the Prius, another the Civic hybrid, I like the Prius. My truck now gets ~15 mpg, so I definitely qualify! But I love my truck!! I was going to wait until I see whether or not I get into my graduate program (so I know what my life will be like for the next two years), but we'll see.
A truck is worth having. We have a '92 half ton Ford pick up but we didn't want to trade that in because we USE it--to haul pellets, machinery, furniture, whatever. It's paid for, so it stays. Gets a whopping 8 miles to the gallon on the highway!
99% of the time it sits. Can't afford to drive it as transportation!
I wrote a hub about this last night and then had to edit it because the program hadn't been suspended after all, now it is being studied. lol
My husband and I thought we lost the chance to get another car. I guess we will still have time, but I wonder about it financially as well. He has crunched the numbers though and firmly believes if we get a car from a dealership offering enough incentives and save a couple of thousand ourselves, we may get away with no car payments at all, or they will be so low, they won't be hard to afford. (We have a trade-in, although it is not clunker-worthy, that will lower the price as well.)So in that case we could easily afford it.
I wonder if that is how so many others are able to afford it. If the prices are as low as I've heard, I imagine people can afford it, with a little savings added in.
Measuring the success of a program like this is very difficult. Arguments will be made that the overwhelming response is evidence of success. Others will say it was caused by the pent-up demand created by the program itself - people who were going to buy anyway simply waited for the program to begin so they could get the 4500.
I am philosophically against such programs; coercing money from those who earned it, and then redistributing it to encourage a a particular behavior.
I think it will soon be as forgotten as the WIN (whip inflation now) buttons of the Ford administration.
In New Zealand, especially in Bumble Town; we are really looking forward to benefiting from the US vehicle replacement program.
We are readying a fleet of car transporters to arrive in Baltimore shortly for loading your clunkers and bringing them here.
As we have so many homeless here; local councils (like Bumble Town's) have organised to take possession of suficient wrecks to house the homeless, after the seats have been rummaged for loose change.
A secondary benefit is that from the containers, it is planned to build prison cells, for the politicians who dreamed up the scheme.
I wish the "clunkers" could have been given to the working poor who need cars. Too bad they were rendered inoperable at the lot at trade-in.
The secondary market for used cars has been trashed for at least 3 years, the time needed for all the new car warranties to expire. About 1/2 million used cars have been artificially removed from the market; the poor will suffer big time because those types of cars are typically purchased by low-income buyers.
But the Democrats meant well!
If suffering means the poor will have to live within their means instead of purchasing a vehicle on credit they don't have and at interest rates that are near usury, then so be it.
A better way to shop for used cars is through the local classified ads, people to people, and by way of barter on Craigslist.
Ummmmm.... the kind of cars being clunkered are runnable vehicles that are often purchased with cash. You must really hate the working poor.
No, it's not the working poor I hate. I hate the greedy bastards that like to twist things, manipulate numbers for their own greed, and cause the working poor to make terrible financial decisions because they think they have to.
What is even worse is when people that are in positions of trust, such as educators, continually feed false conjecture to the working poor and even encourage fiscally irresponsible behavior.
Encouraging people to live within their means is not hatred though encouraging the working poor to purchase clunker cars through dealers that will charge near usury interest rates seems to me to be hatred.
Why would you insist on the working poor to purchase these substanrd vehicles for such high interest rates, knowing that it will further enslave them in debt? Is this the republican plan, to get the working poor so far in debt that when the elections roll around again they can say, see we told you Obama was a bad choice, come over to our side, we'll fix everything those bad democrats destroyed?
The credit companies don't care how many people get into dangerous debt as long as they can charge 28% interest or more...
I agree, too many people rely on credit. But I don't see that changing soon. Everyone wants to have the latest things and think they need a lot more than they really do.
And it is not only the poor who rely on credit.
I hope the consumer are in a buying mode for vehicle after this program ends.
I suspect that most people who were planning on buying a vehicle would have taken advantage of this program. The automotive sales agents are not going to make very many sales in the next few months.
We have had 4 consecutive months of increases in home sales with July being the largest monthly jump in 10 years. I see no reason that car sales will not follow suit. Car sales are already up in India and Europe. I expect a small drop after this "clunker" deal ends and then things will pick up again. People here in the US need cars and the demand for them will continue.
I envy your optimism. Not gonna argue, we'll see who's right in just a few months.
I may be a little biased since I live in a city with a great public transportation system and at least my industry is booming. I too would be interested in the numbers when they come out in a few months. I wonder if they will take into account all the dealerships that have been closed down in the last several months.
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