As we are on the verge of seeing the Obama Administration’s Cash for Clunkers program on the verge of becoming a reality, we’re now starting to hear more dissenting voices that warn that the program might not jump start U.S. auto sales like they hoped.
Arguably, the problem comes from it seeing so many changes since it’s original introduction. It’s current form was recently analyzed by four experts at Automotive News who estimate that the bill will only result in new car sales of 70,000 – 200,000.
They base this estimate on three main issues surrounding the Cash for Clunkers program.
The first issue being that the limit of 18mpg doesn’t encompass enough vehicles. The second being that clunkers will only be able to be turned in between July 1 and November 1. And finally, they point out that most people who could afford a new car would probably already have bought one and that even with the maximum discount of $4,500 it probably still makes more sense to buy a used car.
One thing is for sure though, at very least we will see some polluting clunkers pulled off the road and replaced with newer, cleaner vehicles. Whether or not it manages to give a the struggling US auto industry a boost remains to be seen.
June 24th, 2009 at 6:54 am
My 20 year old Camry does not qualify. With 241,000 miles on it, it is a true clunker. I was going to use about $1,500 from my tax refund to fix various minor things. But, I heard about the possible clunker program and decided to wait. I can afford a new car. But why would I walk away from a well running car that has not had any trade-in value for several years? Offer me $4,500 for it and I will buy a new car tomorrow. The voucher, plus my repair set aside and dealer discounts would total to nearly 10K off the sticker price. Question: How do you explain the miniscule increase in miles-per-gallon required for buying a new truck? Answer: The bill is clearly intended to move unsold SUVs and trucks, which have large profits. People in my position would likely buy another small car and drive it for 15+ years. It appears that Congress is not interested in that. So, I’m off to the repair shop to ensure that I get at least another couple of years off my clunker. In 5 years my clunker transforms into a classic. Honestly, I would have preferred to help the auto industry and help the environment by getting my fluid leaking, smoke emitting car off the road. However, I won’t do it for free. The bill is a great concept, but is a lousy plan… darn narrow-minded Congress. I hope President Obama vetoes the bill. Then he could sign a bill that was expanded to include all 15+ year old vehicles, with 175,000+ miles on them, which are worth less than the voucher value.
June 24th, 2009 at 7:39 am
i so hardily agree. we have a 1983 toyota pickup, if we could afford a new car, we would have already bought one.
July 11th, 2009 at 2:35 pm
I wish I could get a trade on my car. My 1956 Chevy Bel-Air is on its last legs and I could surely use a new Hyundai now…i
July 27th, 2009 at 9:40 am
First time checking out this blog, but I got to say I’ll probably be here more often
September 1st, 2009 at 5:48 pm
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