Is this logic correct, or is he missing some numbers?
Well, he's not taking into account the savings in oil consumption year after year. It seems like a rather short sighted analysis.
Of course, the only reason the energy savings was made part of the program is there's no way you could get it passed the more liberal Democrats without some kind of "green" angle on it. Hummers for Clunkers wouldn't sell well with a great many people.
If it was just about moving the vehicles off the lots, they wouldn't have put a restriction on what vehicles qualified. I'm sure there are plenty of people who could use a new pickup and would have used the rebate for that
You could get a new pickup truck under the deal but you'd probably only get $3500 under most circumstances. My old man turned in a beat-up Dodge Ram for a new Chevy Silverado work truck. To get the $3500 you only had to show a 4mpg increase in efficiency and like all the C4C deals the original car had to get less than 20mpg combined on highway and city driving.
And stimulating car sales is debatable, because like G98, I'm waiting to see the repossessions begin.
I'll be really surprised if we see massive repossessions spring up. The banks are handing out money willy-nilly these days. One would have hoped they learned their lesson with regards to handing out loans to unqualified people.
Anecdotal data: I know plenty of people that had qualifying cars but didn't cash in on the deal. The only people I know that did are myself and my father. I'm sure he paid cash for his remaining balance and owns it outright while I'm going to be paying mine off over the next few years with a minimum monthly payment that's tiny by my standards.
It's funny how one's own perception colors things I guess. On this board it's seen as cash for people too poor to buy a new car. On other segments of the web it's seen as cash for rich people that can afford a new car.
That's not to say I think the program was a good idea or anything. It was a nice little kick to the economy but we're just going to see new cars sales lag for a long time now. I, like my father, were planning on just running out old beaters into the ground, fixing them as needed, and probably buy a new vehicle in a year or two if the economy looked like it was getting better or at least not getting worse. This just pushed up the purchase date ahead of time and now neither of us will buy a vehicle in the next 5 years or so.
