Cash for Clunkers, the government sponsored trade-in rebate program, got an extension on Thursday when the U.S. Senate voted to add 2 billion dollars in additional funding, like the U.S. House of Representatives had done a week earlier. This will extend the program until Labor Day, according to estimates.
The Cash for Clunkers Program was quickly using up the initial 1 billion dollar appropriation, to the surprise of many, and to the delight of automobile dealers across the country. The program was actually stopped for a day or so, until the government said they intended to extend it with the additional funding.
While I personally will not be taking part in the program as I am happy to keep my “clunker” for a few more years, I don’t blame anyone for doing so.
It’s certainly a great deal for auto dealers, who are seeing stronger auto sales than they have seen in many, many months. But this will certainly decrease when the program ends, as many people who are taking advantage of the CARS Program now may have purchased a vehicle in the next few months if the program didn’t exist.
The problem, as I see it, is that many people are trading in a “paid for” car that still runs for a new car with a car note. While $4500 off the sticker price is a good deal, taking on a new car note for 3 years or so may not be for many people, especially in this economy.
And we all know where the money is coming from- that’s right, the taxpayers. Someone will eventually have to pay for it, if not now, sometime in the future. Just like the stimulus checks, most people don’t refuse free money when it is offered to them.
I just wish the government would let me keep more of my taxes and let me spend it if and how I want.
Do you think adding another 2 Billion to the Cash for Clunkers Program, is good or bad?
Photo by Infrogmation of New Orleans
Similar Posts:
- Cash for Refrigerators or Cash for Appliances Rebate Program Coming- Is This a Little Too Much?
- Details of the Car Allowance Rebate System (C.A.R.S.) or Cash for Clunkers Program- And Will it Really Help?
- Update: Latest Details on the Obama Stimulus Plan-Will it Work?
- Mistakes I Have Made With Money That You Should Avoid
If you have enjoyed this article, please consider subscribing to Think Your Way To Wealth updates
using
an RSS reader or
by email to get all of the latest posts and updates delivered for free!
{ 4 comments… read them below or add one }
I think this is a horrible deal. Very few folks who are trading in clunkers for newer cars can afford to do so. The others will need their own bailout. I don’t understand how people think that this is a good deal. Trading in a car for a car note. I don’t think the $4,500 off is worth it in my opinion, not for a car that depreciates as fast as vehicles do.
That’s why i’m investing in my education because that is what keeps pushing me up in this economy. Have fun in your new car everyone, i’ll keep my money and my clunker until the wheels fall off.
@DFH- I agree with your 1st point to a degree, I think a lot of people that are participating probably don’t really need the assistance, or are trading in their paid off clunkers for a car note, which is probably not a great idea for some people.
Cash for Clunkers is creating an artificial demand for vehicles. It skews the market and the car companies don’t have to provide higher value at a lower cost because the government is picking up the tab for their ineffectiveness. Not everyone qualifies for the program yet, EVERYONE is paying higher taxes or higher prices driven up by higher taxes in other market segments.
In the short-term there is a flurry of buying because the government will give some people $4,500 for their old cars. People should be paying off their debt and saving money to weather the future. So should our government be doing the same.
@KM- Unfortunately, I think you are correct, and while it is a boon now for automobile dealerships, their sales will likely go down (even lower than normal) after the program is over.