Cash For Clunkers Program

The Cash For Clunkers program has been a huge hit with dealers and has caused a lot of nervous consumers across the line and decide to spend some money.  I know several people who have personally participated in the deal, and I believe that it has truly stimulated the economy.

But I am not sure that it is a great deal for the consumer.

The situation creates high demand at the dealership.  This can lead to a dealer who is unwilling to negotiate since the consumer is already receiving a rebate.  The program has no defined end date (instead the program's web site currently states November 1st or a vague "when the money runs out" deadline that is not measurable by the consumer).  This creates an "I have to buy it right now or else I will miss out on a great deal" mentality.

If the vehicle is financed, this "deal" still has the potential to wreak havoc on a person's financial future!

I have seen several deals and NONE of them have "Wowed" me.  What about you?

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6 Responses to “Cash For Clunkers Program”

  1. Sandie August 11, 2009 at 4:02 am #

    What angers me most about this program is that they take your car and TRASH it. I am driving a government defined clunker, 10 year old SUV with over 100,000 miles. While it is 10 years old, it is in EXCELLENT condition and has just MINOR nicks in paint. By no means is it ready to be TRASHED! That is just ridiculous that the government would take perfectly good cars and throw them in the junk yard. Yes, there are more fuel efficient cars out there – and my next car will be one of them, but I love life without car payments, so I’m driving this one until it dies, not putting it down because of a 4500 reward from the government.

  2. Kris August 11, 2009 at 5:25 am #

    There is only one point that seems to be missed by most people:
    There is no $4500 Dollar rebate!!! It’s not a “reward” either – this is the biggest waste of taxpayers money in the history of this country! The government is not giving you anything! You (!) are the government – your tax dollars are financing this ‘program’ and regardless if you buy a car or not, you are supporting an industry that was doomed more than 10 years ago and their bad habits and business practices finally caught up with all of them.

    The car industry in this country is at best a mysterious industry…. IMHO, there has not been much truth or honesty in 90% of the dealerships in years. The dealerships don’t have to “wheel and deal” right now, because they still get volume discounts from the manufacturers, since they have the billions now that we as taxpayers gave them to support their ridiculous operations. On top of that, they catch additional tax breaks from the government, so at the end of the day the $4500 is just another “rebate” that means very little. If you do the math and apply some common sense and big picture mentality, the end saving to the consumer is non-existent!

    When do people finally understand that you can’t spend yourself out of debt??? You can’t spend more in order to save more! It just does not work…

  3. Ann August 11, 2009 at 7:00 am #

    I personally think it’s a bad deal. I think they are not only being wasteful in destroying some cars that are still in good shape, like Sandie said.
    BUT
    The government is encouraging people to go into debt to save the very companies that couldn’t managed their own debt. Companies the government has thrown countless taxpayer dollars at. All in an attempt to save companies the government now has stock in. Where were they when the textile companies struggled? Why didn’t we get “Cash for Clothing” allowances. This all reminds me of the housing market with the sub-prime lending that was a disaster, causing alot of people to lose their homes because they couldn’t afford them to start with.

    Will the same happen with the Cash for Clunkers deal? Wonder how many cars will be repossessed because people couldn’t afford them to start with.

    NO car payment, period, that’s the way to go. Save up the money and find a great deal by paying cash for it. TRUE CASH talks, government programs with America’s $Trillion$ dollar DEBT does not!!! By the way, your part of that debt is $38,021 and climbing.

    Check it out at:
    http://www.usdebtclock.org/

  4. Mandi August 11, 2009 at 8:00 am #

    What I love is people were mad at Bush for the “stimulus package” that he gave ALL people money not just the one’s that he and the government were invested in.
    I personally have a business. I could use the $4500.00 to invest in health care for my employees. I guess if I were to get in debt to do those I would be better off according to the government but I refuse to run my business with any debt. It’s not easy to do but in the long run I will have a better business for it.

  5. Casey Morgan August 11, 2009 at 7:24 pm #

    There is a fundamental problem with the cash for clunkers program that I haven’t heard anyone speak out against.

    The issue I’m talking about is the fact that the government is influencing our behavior. If they are influencing our behavior, then how far away is that from controlling our behavior. The whole thing is ridiculous!

    I see it as a matter of principle to not participate in the madness. I’ll pay my taxes and vote. But, I’ll purchase vehicles with cash when the time is right for my family, not because the government is trying to control my behavior!

  6. Dan August 12, 2009 at 6:28 pm #

    Like everyone else I do not like the idea that we will be paying for this additional subsidy of the auto industry with our tax dollars.

    Initially I also thought this was a subsidy for the average American who would take advantage of this offer, but I have changed my mind on that. I think it is more of a trap for them. Others have commented above accurately highlight the reasons for that.

    But I also am concerned that we have artificially altered the demand side of the supply and demand equation. The news accounts are that the cash for clunkers program has been a huge success. But how much of that is tomorrow’s (or next year’s) demand that was pulled forward in a rash decision? The vast majority of the clunkers that are being turned in were still running, but would be destined for the used car lot in the next year or two and new car sales presumably would follow.

    Our leaders are perpetuating the financial belief system (i.e. myth) that we must live with debt, have as much of it as possible, and if we don’t have enough of it, we must be enticed BY OUR GOVERNMENT to get into more of it, to keep our economy strong. Woe unto us.

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