Skip to comments.Cash for clunkers may destroy second hand car market
Posted on 08/01/2009 8:17:19 AM PDT by PureSolace
New Delhi, Aug 1, 2009: Will cash for clunkers destroy second hand car market in the US? Many people are asking the question ever since the cash for clunkers program was introduced by the Federal government just a week ago.
Yesterday the Federal government put its stamp on extension of the program and the increased funding for people who wanted to get rid of their gas guzzling clunkers.
The US House gave its nod to the extension of the program and 2 billion dollars more in funding. This will give some hope to clunker owners who thought that they may not be able to benefit from the program.
But with the number of people rushing to get rid of their old cars, and go for new, and fuel efficient ones, experts are saying that it may kill second hand car market in the United States.
The left does not want low income people driving cars. They want them in public transit.
Highways and cars are for trust fund babies and government officials.
It will totally destroy the used car market. As of now, your used car is worthless.
Not unless they make it illegal to sell used cars....which is not to far fetched.
Actually it will drive up the prices of all cars..new or used. The govt just increased the amount of money buyer have to buy cars. Plus the minimum price for a running clunker just became $4500. Why sell for less? That means that the price of all used cars will go up and there will be less of them. New car prices go up since stupid buyers will be willing to pay higher prices because they suddently have a down payment with the clunker.
Just more dollars chasing fewer goods..
Cash for Clunkers will prove to be a massive fraud and failure on a hundred different levels.
It is an appropriately “homely” and apparently “harmless”
piece of feel-good indirect social engineering that the Zero Adminstration probably thought they could pull over on us because they managed to wrap it in a cute “non-profit” kind of name like Cash for Clunkers. Every ongoing failure and negative repercussion of it, though, will be spun as positive (think LONG-TERM , people!), and it will I hope wind up serving as a PERFECT SYMBOL for how and why this Administration should not be entrusted with ANYTHING in your life, and should not have ANY access to your or your children’s pocketbook. A great deal should be made of what looks like the inevitable massive failure of this program.......yeah, I know so far it’s only a BILLION......see, that’s the problem when these criminals have already gotten people accustomed to hearing about HUNDREDS of billions, and TRILLIONS.
The people most affected will be the poor who otherwise would have bought those cars. Get used to walking because the gooberment doesn't want you driving.
But then not to many people want to buy the pile of garbage so you may be correct.
As long as the used car was rated at more than 18mpg, it does not qualify for the $4500 rebate, so it remains at “willing seller-willing buyer” price.
Of course, the used, full sized pickup truck & 4x4/SUV market now has a $4500 minimum price.
This policy will, like many other things the evil federal government does, hurt the poor. They now have to pay more for a used car.
This is similar to when the federal government destroyed food when the poor were malnourished and hungry during the Great Depression.
Hay, wasn’t Obama going to buy us gas?
Apt comparison. Libs are economic imbeciles.
Stores and manufactures/Markets affected:
Charity use of cars
Training to fix cars
Rare Parts stores
Isn’t the plan actually about the move to public transportation/limitation of individual movement, bicycles and walking?
Deconstructing America and its cities. Breaking the love affair between Americans and their cars, classics and care for their cars.
The federal government is changing the rules as it goes. Suddenly, a number of cars have had their mpg rating retroactively increased to make them inelegibile for this program.
This is a total joke and fraud. The government should not meddle in the market.
This CashForClunkers scheme is just another example of how Leftists LOVE to control. To them America (the world in general) is like a dashboard with a million knobs, dials, switches, sliders, etc with only themselves behind the panel. Turn a dial, if it breaks, turn in even more. Slide a slider, if something screws up, slide it all the way. Flip a switch - if something blows up, flip a few more similar switches. When nothing works, just randomly slide, flip, turn.. until Americans get so fed up they kick the commie socialists out of the control room. Republicans take over and install a new panel with just a little fewer knobs, switches, sliders and dials.
For example, the government can, at any time, make the mileage requirement much lower to exclude more models. It can also exclude specific models and makes by name.
The uncertainty of the program's future is what makes it such a joke.
Some dealers are even doubtful if they will ever get the rebated money from the federal government even though they have fully complied.
The dealers have to prove they destroyed the trade-ins before they are paid so if the feds refuse to pay, the dealer cannot even sell the vehicles to recover their losses because they have been required to destroyed them.
How would you enforce a claim if you are a dealer? Would you sue the federal government? Good luck with that.
This program is the biggest mess I have ever seen. What a joke!
And that’s not the only thing the government shouldn’t be meddling in. I’m sure you know the answer to this: since when is our government been in the business of owning car companies and banks? 3 1/2 years can’t go by quick enough!
They SELECTIVELY got rid of some of the dealers and THEN put this program into effect. The $4500....pure profit for the dealers....and right up front!! What a scam!!
Actually, I think it will make the used SUV more expensive. There will be fewer of them. The whole supply and demand thing...
A local man turned in his Cadillac. It looked like a sharp car, and I had never seen dirt on it. He bought a Prius. I will wonder if his Cadillac ever gets back on the road contrary to the rules.
No, that used Tundra must become more expensive. “Clunkers” are not being resold, they are being destroyed and taken off the market. There will be fewer used cars available, increasing their costs.
Cash for clunkers is an example of the Broken Window Fallacy in action. It only makes sense if you assume that the benefit of removing “gas guzzlers” from the fleet outways the costs, an assumption that I do not share.
Used cars will go up in price as well as new cars. The federal government is doing to the car market the same thing it has done to healthcare costs and college tuition.
Actually, all the cars traded in on the cash for clunkers have to be destroyed. I’m ready to downsize (kids are now driving) and even thought about this program (about time I got some of my tax dollars back). Once I found out they destroy the cars traded in, I changed my mind. Why should my perfectly good 5 year old Expedition be trashed (not even sold for parts, just scrapped) when it still has many good years in it. Talk about wasteful!
However, when I want to sell it, I see the price going up, as the government is eliminating my competition for me!
1) People driving older cars, have lower insurance rates
....and most likely no monthly car payment.
2) Now they have an attractive carrot dangling in front of
...them with this possible $4500.00 prize.
3) If they had to drive older cars due to lack of money
...what makes them think they can afford higher insurance
....in addition to a new monthly car payment?
“Before we can create our Utopia we must continue to destroy America and it's wealth first.”
Next on the list the American Automobile.
As you noted, the whole Cash for Clunkers boondoggle is really a scheme to encourage consumers to get back in debt. No doubt the govt. and their friends in large banks are alarmed that many citizens have realized that paying thousands of dollars in interest to banks to have a new car is a bad idea.
For many consumers they'll end up paying some bank way more in interest than the $4500 they get from the government. And the return on investment from buying and financing a new car just to get slightly better mileage is negative for the consumer.
Some people already got caught in the middle. Traded in their car and then the rules changed the next day. Dealer called them and said they needed the $4,500 they gave them or they couldn’t keep the car. I wondered if the dealer had already destroyed their car.
How many auto mechanics is this deal going to hurt?
What is going to happen to NAPA auto parts because of this program?
Ebonics for stuck on Stupid
Not likely. The “cash for clunkers” program ran throught a billion dollars in an eye-blink. It’s pretty clear that this program is unsustainable. There will be quality used cars available. Could be that they will command a higher-than-normal price for a while.
You don't think they can keep this thing up forever, do you?
Plus, this being the government, a lot of the people who buy a car based on the cash for clunkers rebate are not going to get the rebate. It's already happening.
This is going to be the biggest government snafu ever perpetrated. Leno and Letterman will be joking about it for years.