People usually drive old clunkers because they can’t afford anything better. If the Government buys them chances are they’ll just buy another clunker if they can, not a new car they can’t afford.
Maybe Obama and company will buy them all a new vehicle too?
And who is going to loan them the money to buy the new car? Oh, I forgot, the banks will be forced to loan to them just like the housing mess...and we’ll get to pay again. Where did our leaders get their economics training? Or did they get any?
Here’s the deal. They did the same trick in Germany...a vehicle 9 years old or older, that you’ve owned for minimum of twelve months....you got $3250 to crush it (nothing less than a crush is acceptable). Each person gets one chance to do this. So a husband and wife can do this. The catch is that the new car has to be German-made.
So now we turn and look at this possible US deal. Here’s the big problem. As much as Ford, GM and Chrysler really want this deal to occur...what about other companies...like Honda, who makes a car in the US? If you open up the floodgates....over half the people will run to Toyota, Hyundai or Honda....which doesn’t help the big-three. I’m guessing that there serious legal implications if they try to limit this to Ford, GM or Chrysler.
But here are the other issues. We have a used part industry which really needs to use the option of reeping parts off the old cars. The rule will be a crushing and likely nothing less than that.
I will make this comment as well...in recent days in Germany...several statistics folks went out and found that 90 percent of the folks who did the junker deal...were going to buy a new car anyway. So this only changed the minds of ten percent of the folks. Another issue is that almost everyone in Germany has bought what they want...so from June on...for the rest of the year....I expect almost no sales....so this will go real flat shortly.