So cash for clunkers gives you $4500 for your old car, then they destroy that old car. Now that means a whole lot less clunkers for young people to buy as their first car to get them to and from their first job. When there is less supply, demand causes prices to go up. So the clunkers that remain will cost more and young people just starting out will not be able to buy cars. I think we are going to see alot of people buying motor scooters soon just to have a cheap form of transportation. America will look like china or india with the amount of bikes/scooters that will soon be on the road.
The numbers work out to about 86k addtional sales if 226k traded in @3500 rebate. The remainder would have been normal trade-ins. Make me think tarp/talf was 'Cash for bagholders" and all we get is cash for clunkers.
Hello Zen, I believe based on your reply that you missed the point of the OP. The point was that the older car/truck is being taken out of the marketplace and that will cause a drop in supply of cheaper cars. The supply drop will cause a relative increase in the price of older cars and make them less affordable to people with lower incomes (think minimum and near wage people primarily with diminishing effects as income goes up) Whats gonna be the next great idea? How about we start burning down houses that were built before 1975 with less than 10 inches of insulation if you buy a new energy star house. That would give firefighters plenty to practice on (first controlling the burning and then putting the fires out in a controlled method) as well as take a lot of houses out of the marketplace that dont have as high of conservation levels. You could give the new home buyer a $25K credit and that would make buying a new home more afforable. That would put a lot of people to work building new homes and get rid of a lot of excess homes on the market. You just need to ignore the facts that it would raise the deficit (wont it be great to tell the children how their future was mortgaged away so we could destroy cars and homes) and lower the total assets that America owns but lets not get facts in the way of change. The real scarry thing as I write this is wondering how many people will read the home burning concept and actually think it might be a solution to the housing problem...... DC should rename itself to UC (Unintended Consequences) Have a great weekend
I doubt that these kids you're talking about would have even considered buying qualifying cars under the clunker program due to the combined city/highway MPG having to be less than 18mpg. The cost of gas would eat up their earnings.
What i am saying is generally your first car costs about $1500 bucks or 2,000 bucks. Kids are not buying 10k used cars, but if all the people are trading in their cars that are worth less than 3500$ to get a new car, thats all those cars worth less than $3500-4500 will not be able to be bought by kids. This cash for clunkers makes it almost sure that a used car is going to cost a min of $5,000. So the kids are going to say "hey...why pay 5k for a used beater car when I can get a scooter brand new and half the price" I mean you should see some of the prices now for these old clunkers. Back in 1992 I was looking at getting this ford mustang. It was 10k at the dealership and it was used. The same car on ebay has been bid up to over 5k (and reserve has not yet been met.) http://cgi.ebay.com/ebaymotors/Ford...cks?hash=item2555b698f3&_trksid=p4506.c0.m245 Now keep in mind that if you go to kelly blue book website you will see that the car has a private party blue book value of $3,400! Yet people have bid it up to over 5k already. The normal Dealer trade in value for that car is $2,300 (well $3,500 because of the cash for clunkers) This is how the government gets everything distorted.
Please do the math before you post assumptions. If the average person drives 15K miles a year. At $3.00 a gallon each one MPG will add $300 a year, $30 a month. Most kids own cars under 5K, hard to find a car less then 10 years old at that price. Obama is crushing the young and dumb crowd. First he runs up the deficit by taking a few trillion dollars from the their future. next he is trying to force them to buy expensive health insurance to subsidize the elderly. Now he is scrapping all the old affordable cars.
I suppose that it depends on where you live. In the southeast, I see lots of 10-15 year old econoboxes in the $2-3k range, typically with 75-125k miles.
Exactly right. I find it poetic justice that the majority of the type of people that voted him in( the young people) are the ones he is screwing the hardest!
Anybody buying a car on eBay at inflated prices because they think they're going to collect a $4,500 windfall from the government is in for a surprise... You can't qualify for it if you've not had the car registered and insured in your name for at least a year prior.