The confusion around the Cash for Clunkers (or CARS) program continues. The Senate may take up the bill Wednesday or Thursday, but an extension of the program is anything but a done deal.
Today, Senators Diane Feinstein (D-California) and Susan Collins (R-Maine) announced their support for extending the program. Despite earlier concerns, they are happy with how consumers are using the program, particularly the increase in the number of fuel efficient vehicles purchased. The Department of Transportation found on average people using the program bought cars, SUVs, and trucks that got 9.6 more miles per gallon than their old "clunkers."
While the program is popular, some are opposed to pouring another 2 billion to boost car sales. There's a question of fairness: Should auto-dealers get a boost while other small businesses are struggling? There's a question of need: Do people with older cars need $4500 more than someone else? I talked to some folks who took advantage of the program and actually didn't think it was good policy. (They didn't want to talk on the record). Others felt with so much money being spent for "stimulus" what difference would another couple billion make, especially if it is for a program that is, by all accounts, working.
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another couple billion make, especially if it is for a program that is, by all accounts
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Dad, if US Oil Production peaked out in 1974 and Persian Gulf Oil Production peaked out in 2007, would better fuel economy in this country save some of our oil for military needs of our future generations? If, then what would be your suggestion for how to pour the sodium silicate into the engines of our clunkers?
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Sodium Silicate is expensive. It would be cheaper to replace clunker rear end with low ratio rear-axle, replace transmission with wide ratio gears, and replace spark-plugs with new palladium plugs having platinum electrodes.
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But how much new parts would cost on each clunker?
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Retail or wholesale?
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Retail
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$6666.99
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Wholesale
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$1.49
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Undiluted to not include CEO Bonus & call options
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$0.49
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With very low ratio rear axle How much mileage you could get at steady 60 mph on open highway without traffic signals?
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149 mpg
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Got it! At low engine RPM you get lot of efficiency. Any backfire?
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Rarely, and very little kickback on Capitol Hill.
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Here's the problem, not the price of cars it's the credit restrictions. Think about this only those with great credit are buying the new cars, what will happen is all the people with blemished credit and those who are on fixed incomes will be the ones who have to buy the turned in clunkers. I know a dealer that got a big laugh out of it all and said the folling "i'll just take those clunkers and sell em to poor suckers as a buy here pay here car and i'll make more money than you can imagine" Will the program really help, I don't think so in the long run.
If you could be here where I live, there are many "clunkers" on the road, more so than in other parts of the country. There are also many poor people who may not be able to afford the payments for a new car. The cash for clunkers should not limit used newer, not just brand new more efficient cars to reduce pollution and unsafe hazards on the road. Some of these clunkers are not insurable because they are a major liability risk, especially during evacuations on the Gulf Coast.
In her post, Stephanie says that some of the fuel efficient vehicles people are buying include SUVs and trucks that get 9.6 more miles per gallon than did their clunkers. Trading in a clunker that gets 15 miles to the gallon for an SUV or truck that gets 24 is not going to have any effect on lessening our dependence on foreign oil. It's trading a big gas guzzler for a smaller gas guzzler.
This program has very little to do with fuel efficiency, dependence on foreign oil or the environment. This is all about moving inventory off the dealers' lots. Once that inventory moves the auto manufacturers can ramp up production. It's a further government bailout of the auto industry and a payback to the UAW.
I believe any measure that get people away from gas guzzlers and looking at more fuel efficient sustainable options is good mainly because we have just got to get away from our dependence on imported oil.
The issue of cost/fuel efficiency really came to the front burner when gas prices spiked a couple of years ago to around $4 per gallon. Now that gas prices are around $3 we still talk about them but our focus has shifted to fuel efficient cars. The CARS program says the government will give us money if we trade in our 20 mpg gas guzzler for a more efficient 30 mpg car. It'll cost us $3 to drive 30 miles in our new car whereas it cost us $4.50 to drive those 30 miles in our guzzler. But if gas prices were at $2 per gallon we could travel those same 30 miles for $3 in our clunker.
For the year ended 12/31/08--or during the recession-- ExxonMobil had net income of $45 billion (that's with a "B"). I'm sure other oil companies had similar profits. What if the government forced the oil companies to cut into their profits in the form of reduced prices at the pump? Wouldn't a gas cost reduction that benefits everyone who drives a vehicle provide more of an economic stimulant than a car clunker program that targets a small segment of the population?
Financial stability is the reward of frugality and industry, but the frugal and industrious are paying the freight for the wasteful here. After we bailed out the big spenders with their McMansions, we now have the pleasure of buying their old SUVs.
The C4C program is really just pork and another attempt to buy votes by this out of control Congress. Yes, it is unfair partly because people who participate have to be affluent enough to afford a new car and yet the clunker must meet strict requirements that our 1990 Chevy did not. Just another way to put our children and grandchildren deeper into debt while we live it up.
A friend of mine at work participated in the CARS program and it works. Without the $4500 incentive
there would have been no deal. A few billion dollars for this program seems meager in comparison to the many billions already spent in bank bailouts. And unlike the bankers, the car shoppers have snapped up these deals in a hurry and provided real stimulus to our economy.