Cash for Clunkers unintended consequences.

[Headless Thompson Gunner]

I'd be in favor of burning down a bunch of the houses NEWER than 10 years old.  A lot of those new McMansions are all but disposable anyway. 

As has been said before, destroying wealth to make us more prosperous ain't gonna work.

[280plus]

Yup, I see a lot of repos on the horizon. How is it any different from the bad loan debacle? People trading in these "clunkers" are going to find themselves suddenly saddled with a car payment the will eventually be unable to pay and all the happy joy joy will wear off in short order. 

[FTA84]

Yup, I see a lot of repos on the horizon. How is it any different from the bad loan debacle? People trading in these "clunkers" are going to find themselves suddenly saddled with a car payment the will eventually be unable to pay and all the happy joy joy will wear off in short order. 

I'm not yet convinced that this is happening.  The credit market has been so tight lately that I can only imagine the only people benefiting from C4C are those who are responsible.  Or has the congress/administration loosened up credit to make this program succeed?

[Desertdog]

is this a surprise to any of you?  America junk dealers are probably selling the scrap metal to Japan at reduced rates due to the volumn of scrap being generated from all those cars being replaced.

Cash-for-Clunkers Great — for Japan

Monday, August 10, 2009 4:56 PM

By: By Dick Morris & Eileen McGann 
 http://www.newsmax.com/morris/japan_clunkers_ford_gm/2009/08/10/246107.html


The only part of the stimulus program that is working, the “cash for clunkers” program is, in reality, a subsidy to foreign car companies, proving that Barack Obama is the best president Japan ever had.


The Department of Transportation reports that the 10 leading trade-ins are all American branded cars while six of the top 10 new cars purchased — and four of the top five — are foreign. So the Senate is about to pass additional funds to subsidize the trade-in of American cars and the purchase of foreign cars.


DOT reports that the following are the 10 top trade-ins, all American:


1. Ford Explorer

2. Ford F150 Pickup 2WD

3. Jeep Grand Cherokee 4 WD

4. Jeep Cherokee 4 WD

5. Dodge Caravan/Grand Caravan

6. Chevrolet Blazer 4 WD

7. Ford Explorer 2 WD

8. Ford F150 Pickup 4 WD

9. Chevrolet C1500 Pickup 2 WD

10. Ford Windstar FWD Van


And the top 10 new car purchases, subsidized by the American taxpayer, are mainly foreign vehicles:


1. Toyota Corolla

2. Ford Focus FWD

3. Honda Civic

4. Toyota Prius

5. Toyota Camry

6. Ford Escape FWD

7. Hyndai Elantra

8. Dodge Caliber

9. Honda Fit

10. Chevrolet Cobalt


It is a violation of the World Trade Organization rules to enact a public subsidy program and skew it toward only domestically produced products, so the Congress has no choice but to extend the program to all comers. No choice, that is, but to not spend the money in the first place.


“Cash for clunkers” will do wonders for the Japanese economy, but its impact on the U.S. job situation is problematic. This unintended consequence is a great illustration of what happens when the blunt tool of government subsidy is applied to the fine tuning of a free market economy. Government planners keep getting it wrong. That's why socialism is such a bad idea.


So Obama can boast of a great success in taking American cars off the road and replacing them with foreign cars. Great going!
 

[Boomhauer]

I wouldn't buy a US brand car. Especially not GM or Chrysler. Maybe a Ford, but if buying new, why would you not go Japanese (unless you are looking for a heavier than 1/2 ton pickup)?

[Scout26]

Ummm, sorry, but the Honda's and Toyota's on the list are made in the USA, just not in Detriot or the Rust Belt.

[bedlamite]

The name of a car doesn't necessarily determine where it's made anymore.

http://www.automotiveaddicts.com/inthenews/07-10-06.html

[Nick1911]

Ummm, sorry, but the Honda's and Toyota's on the list are made in the USA, just not in Detriot or the Rust Belt.

Ding ding ding!!!

[seeker_two]

One more thing....the Ford Escape is made by Mazda....

The name of a car doesn't necessarily determine where it's made anymore.

Very true.....my Nissan Frontier was made in Tennessee.....while my in-law's Fords were made in Mexico.... 

[Standing Wolf]

I buy Japanese cars that are actually made in Japan; I also use my own money rather than the tax payers'.

[drewtam]

Besides, the Japanese economy is getting nailed much harder than the rest of the world.

May 20 08:37 AM US/Eastern

The annualized contraction of 15.2 percent in real terms was...

http://www.breitbart.com/article.php?id=D989VIS82&show_article=1

[GigaBuist]

I'm not surprised.  I recently changed my mind on submitting my 2000 Jeep Cherokee to the program and bought a Nissan Versa with it.

[280plus]

Good question but I still have my doubts. Time will tell I guess.

[Jamisjockey]

Topix merged.  'Nuff said.   

[Racehorse]

One more thing....the Ford Escape is made by Mazda....

Yes, but Ford owns 2/3 of Mazda.

[GigaBuist]

Yup, I see a lot of repos on the horizon. How is it any different from the bad loan debacle? People trading in these "clunkers" are going to find themselves suddenly saddled with a car payment the will eventually be unable to pay and all the happy joy joy will wear off in short order. 

I know anecdote doesn't equal data and all that, but here's what I've seen:

I'm turning in a 'clunker' and it'll cost me $190 a month for the new car.  That's well within the range of affordable to me and I'll probably have it paid off in half the time I'm supposed to.

Old man turned in a 'clunker' and paid cash for the replacement vehicle.  Another full-sized truck of some kind.

My in-laws on the other hand all drive clunkers.  One of them is annoyed that this is going to make it even harder to find the engine he needs for the truck that needs one.  There's at least 6 vehicles among them that would qualify for this program.  None are jumping on it because they know they either won't qualify for a new loan or shouldn't be getting one.

[280plus]

Well, one can only hope the rest of the population acts as responsibly as your family. What I see is plenty of car dealers looking to make sales however they can. They won't care about the ability of the buyer to pay. That's the loan company's problem once the sale is made. Once the reality of 6 years of payments hits home some of these buyers are bound to fold. I hate car payments myself so I'm keeping my "clunker".

[Jamisjockey]

Rasmussen poll on the news this morning:
at least 53% polled think that the government is wrong destroying the clunkers and should make them available to low income families for cheap.
 
This administration is imploding, one policy at a time.

[White Horseradish]

I know anecdote doesn't equal data and all that, but here's what I've seen:

I'm turning in a 'clunker' and it'll cost me $190 a month for the new car.  That's well within the range of affordable to me and I'll probably have it paid off in half the time I'm supposed to.

I could probably afford that, but that would be $190 more a month than I am paying now. Not a good trade-off - $190 buys quite a bit of gas and close to 1000 rounds of 9mm at Walmart.

At any rate, one of my cars is 19 years old, the other is 21. Neither qualify for the program, gas mileage is too good. The 19 year old one actually gets better mileage than the book says, and the book says 22mpg.

[Monkeyleg]

At any rate, one of my cars is 19 years old, the other is 21. Neither qualify for the program, gas mileage is too good. The 19 year old one actually gets better mileage than the book says, and the book says 22mpg.

My Mustang gets 24 highway and 14 in the city (10 with the A/C on). I wonder if I should trade that clunker in for one of these?



I saw one of these on the road the other day. It looked like a water closet on wheels.

[Regolith]

My Mustang gets 24 highway and 14 in the city (10 with the A/C on). I wonder if I should trade that clunker in for one of these?



I saw one of these on the road the other day. It looked like a water closet on wheels.

I'm pretty sure I said this in another thread, but oh, what the heck...

Someone at my university has one of those, and I parked near it once.  If you were to take a saws-all and remove everything above the side mirrors, you could fit one of those in the back of my Ford Explorer (with the rear passenger seats down), and still have room for a passenger and some luggage to spare.

[280plus]

I saw a guy trying to fit a medium sized box into the "cargo area" of one of those. He was soundly rejected and had to go get ANOTHER car that the box would fit in. 

[K Frame]

I'm starting to see a LOT of "Smartcars" on the road in my area.

What I don't understand, though, is why someone would pay what they want for a Smartcar's rather mediocre mileage combined with its incredible un-utility.

Holy crap.

In order to get into the Smartcar site to see information on their products, you HAVE to provide your contact information.

Barak Obama just signed up to learn more about a Smartcar.

[Regolith]

Barak Obama just signed up to learn more about a Smartcar.

 

Personally, I'd rather get one of these.  It's about the same size, probably cheaper, gets about the same MPG and can haul more stuff.

Might be difficult to make it road legal, though...

[seeker_two]

Too bad CfC only applies to cars....I'd find a clunker to trade in for one of these...



http://www.davepit.com/wp-content/uploads/2008/03/1-brp-can-am-spyder.jpg

Pretty cool...esp. seeing Dennis Quaid riding one in GI JOE....