I support Americans, I support Americans going back to work, I support good deals for Americans. I'm sorry you do not feel the same.
What a coincidence, I support America and Americans who can take control of their own lives and not depend on the government to fulfill their sense of entitlement. Thank you for the sad attempt to twist my words. It’s too bad that the CARS program didn't do anything to actually help the people.
If you actually paid attention to what was going on instead of just being dazzled by the shiny gloss on the surface, you'd realize what I'm talking about.
Here, I'll break it down for you, since I'm feeling generous.
First, the true "clunkers" on the road are all well over 9 years old. The people driving these cars, even with a voucher from the Feds, most likely should not even be buying a new car. They just don't have the money. That's why they're driving a clunker in the first place. Unless a person has enough disposable income to be paying for a new car in cash, they probably shouldn't be buying it.
Besides having to commit to high monthly payments against something that they currently may have no monthly payments on, they will wind up paying more in annual fees and insurance payments. In most states, the vehicle registration fees are age and value based. My car, for example, costs about $30 this year. A new car will cost nearly $500. Additionally, a new car would probably add another $400 to $600 a year in higher insurance costs. Combined, you could be looking at a new expense of $850 to over $1000 a year that is over-and-above any monthly expenses for a new car loan.
The average mileage on a new car is about 27 miles per gallon and that car is destined to drive about 12,000 miles a year; once off the lot. That means that this new car will probably need about 450 gallons a year to operate. For the sake of conjecture, let’s use a rate of $2.60 per gallon, making the annual fuel expense about $1170 dollars. A 4 mpg increase in a mileage rate is only a 14 percent reduction in annual fuel expenses. The resulting savings for buying that new car would be a little over $13 a month for the buyer. Not much of an incentive to spend $10,000 or more (even after the voucher) to save such a small amount of expense in gasoline.
In addition, this isn’t even getting the inefficient vehicles off the road. Given that the average car is 9 years old, it will be repackaged by the car dealer as a used vehicle and resold. That used car will remain on the road for a very long time.
Lastly, the biggest problems with the "Cash For Clunkers" spending bill is that it will drive consumers to buy Toyota's and Honda's. That's because, the Japanese vehicles have higher mileage capabilities than most U.S. models of the same class or type. In fact, most Japanese hybrids are at least 4 mpg more efficient than any equivalent U.S. branded hybrid. Standard fueled cars are even more efficient. That means that many new car buyers just see this as a "government give-a-way" for something that they planned to do anyway.
If people were planning on buying a car within the last six months, hearing about the voucher, they would have held off their purchase until the program had been instated. This created an artificial slump in the car sales market that may not have been as bad as it was if people weren’t waiting on this program to save them a few bucks. In addition, the bounce back the market is seeing is likely to slow as soon as the program ends, since anyone who was planning on buying a car in the following six months bought early to take advantage of the savings. Basically, all the car purchases that had been planned for this year are already done.
Furthermore, the reason the U.S. car sales have slipped over the years is because resale values are lower and repairs higher. If you just look at any Cadillac, two years off the showroom floor, there are constant and reoccurring problems with things like the electrical system. That's why resale values are lower and why their Japanese counterparts are more desirable. The quality and finish of a car on the showroom floor is one thing. However, the repair history is something completely different. U.S. namesakes can't compete with the Japanese after 2 or 3 years of operation. Just look at consumer reports or other rating agencies.
Regardless, there will be almost as many “clunkers on the road after the program is over as there were before.
So, in conclusion, you have Americans burdening themselves with debt they probably can’t afford, in a down economy, no less. They’re paying in excess of $15,000 to get a $4,500 of their own tax dollars back. They're spending MORE money each month as opposed to getting a good deal. You have jobs that have been temporarily created but will likely not last through the month. To top it all off, you really haven’t taken many of those nasty, evil, inefficient cars off the road. This just reeks of success, doesn’t it?
