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Was Cash for Clunkers another corporate gift?

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Tim01 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 05:06 PM
Original message
Was Cash for Clunkers another corporate gift?
It seems like a great program, to some extent, on the surface. Less fuel usage nation wide, and a shot in the arm to the car industry.
But the downside is going to be pretty far reaching. I think there were a lot of people who got themselves in debt as a result of this program, people who would have just held on to their older cars otherwise. Now they will be paying finance charges and they will have a new car payment. I have had old cars and new cars. The cost of repairs is no where near as expensive as a monthly car payment, and the mandatory full coverage insurance. Banks and insurance companies benefit from this program, and middle class and poor people pay for it.
The other thing that will happen as a result of this program is a shortage of used cars. Used car prices will go up as a result of this shortage. And they will just not be as available anyway. Some more people will end up with a car payment instead of buying a used car, more debt for poor people and profits for car companies, banks, and insurance companies.
Used car parts will become less available. They will be harder to find, and more expensive. Once again making it more attractive to just get a new car and a new car payment, and higher insurance payment.
I have a friend who owns a junkyard and he is pretty concerned about the impending used car shortage. He and his employees make their living off used car parts. Less used cars equals less used car parts.

I am no longer convinced the motivation behind this program was what we were told it was. Maybe I'm wrong.
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Ikonoklast Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 05:21 PM
Response to Original message
1. There is no 'shortage' of used cars, or used parts.
Do you have any idea as to how many used cars are squashed, shredded and scrapped on a daily basis?

This was going on before Cash For Clunkers, and is going on now.

Many of the clunkers traded in were just that, clunkers.

And the salvage yards still had a month to strip usable parts off those before scrapping them totally.

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AllentownJake Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 05:29 PM
Response to Reply #1
3. You had to own a car for 3 years prior to the trade-in
So, no, there was no salvage of the parts. I don't totally disagree with you there, but the clunkers were at least owned by an individual prior to the purchase program.
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Ikonoklast Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 05:40 PM
Response to Reply #3
9. I should have excluded engine and drive train parts.
Those were excluded from any re-sale.

Anything else of value, interior, body parts, etc, was allowed to be salvaged for one month before the dealer had to scrap it out entirely.
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doc03 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 05:36 PM
Response to Reply #1
6. You do know they poured acid in the drive train of the clunkers
making them unusable? They could still salvage the other parts I suppose.
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Ikonoklast Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 05:44 PM
Response to Reply #6
11. Silica sand, into an empty oil pan.
Run until it turned to glass.
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AllentownJake Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 05:27 PM
Response to Original message
2. It was a Push Demand Forward program
That enabled auto-makers to get rid of excessive inventory that they would have to discount anyway to clear. So yes, it was a give away.
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doc03 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 05:30 PM
Response to Original message
4. I don't really think there will be a used car shortage anytime soon
but I do think the program was a total waste and unfair. I remember seeing where the net gas savings was only something like one mile per gallon. There were more Ford Explorers turned in than any other model and they were traded in for SUV or pickups that only got slightly more mileage. I would have loved to trade in my Mercury tracer that gets around 30 MPG on a Prius that gets around 50 MPG an increase of 20 MPG but my car didn't qualify as a gas hog. So here I got penalised because 7 years ago I bought the Tracer because it got excellent mileage. But my neighbor bought a gas guzzling Explorer back then and gets $4000 for a piece of junk. I saw some cars at a local dealership that were obviously towed to the dealership, one car I saw the wheels were packed with grass clippings there is no way in hell they drove it there.
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AllentownJake Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 05:36 PM
Response to Reply #4
7. It was almost as big of a joke as the golf cart subsidy
that some idiot wrote into the stimulus bill that allowed for people to purchase electric cars, so golf cart makers made them street legal with seat belts and sold them to all the retirees in those gated communities at a ridiculous discount courtesy of a government rebate.
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doc03 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 05:39 PM
Response to Reply #7
8. Wow, never heard of that one, that explains why the
retired doctor across the road started driving a golf cart out to his mail box.
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AllentownJake Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 05:43 PM
Response to Reply #8
10. It was quite the amusing controversy a few months ago
http://online.wsj.com/article/SB10001424052748704107204...

8000 golf cart, 5300 subsidy, 2700 Golf Cart for the consumer.

Yes, the doctor is probably someone who cashed in on it.
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jrtayloriv Donating Member (19 posts) Send PM | Profile | Ignore Fri Dec-25-09 05:36 PM
Response to Original message
5. Obama doesn't do "corporate handouts" -- he does "progressive reforms"
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HoarseWhisperer Donating Member (13 posts) Send PM | Profile | Ignore Fri Dec-25-09 06:38 PM
Response to Reply #5
19. You said it very well. nt
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Sarah Ibarruri Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 05:49 PM
Response to Original message
12. There's very little that can be designed to help the poor...
The rich will always get more benefit from everything, unless strict laws target strictly the poor for benefits.

For example, the electric vehicle subsidy. If it had been written in such a way so as to specifically rule out golf carts, all these rich assholes would not be getting free golf carts. There's always a trick legally written in all laws here in the U.S. And even when there isn't, lawyers will sit down and by golly they'll find some trick to use by which the rich can get things for free.

It's time to make specific laws that rule out the rich. Rich being anyone over $200,000.
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AllentownJake Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 05:51 PM
Response to Reply #12
13. The requirement was street legal
They added seat belts. :rofl:
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Sarah Ibarruri Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 05:52 PM
Response to Reply #13
14. These laws need to be written very simply. I'll write them if they wish: NO RICH MAY APPLY
end of story
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AllentownJake Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 05:56 PM
Response to Reply #14
15. You can say your gross income can't exceed a certain amount to apply for a subsidy
but you can't write it that way.

The Electric Vehicle tax break should never have been written, simply because, there aren't that many electric vehicles on the market right now. The government would be better off investing in battery research and providing the findings to industry for a license fee.
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Sarah Ibarruri Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 06:01 PM
Response to Reply #15
16. I'm not a CPA, attorney, or anything like that, yet even tho I'm not....
I know where there's a will, there's a way. If modern man can operate on the heart, SURELY he can get some attorneys so sit down and write laws in a way so as to EXCLUDE THE RICH one way or another.

I doubt it's beyond our intelligence. Really.
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Gold Metal Flake Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 06:09 PM
Response to Original message
17. Used parts less available? Clunker cars went to the junkyards for parts harvesting.
Why yes, I have proof. Plenty of used parts in much better condition than I usually see. Nice try, sparky.
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Tim01 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 06:39 PM
Response to Reply #17
20. "Nice try, sparky." There is no need to be a dick.
But thanks for the info just the same.
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gmoney Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-25-09 06:24 PM
Response to Original message
18. .
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