Gimme Back My Clunker
My first car cost me $700, which I just barely managed to scrape together back in the early-mid ’90s. The purchase price of my 1975 Oldsmobile 98 included an adapter to play tapes in the in-dash eight-track player. Whenever my inexpensive patches gave way, the beast would roar like a Harley through its rotting exhaust pipe, and I’d periodically find myself without amenities like power steering. But the fixes were inexpensive and easily rigged, and the car kept me mobile for the first of my two years as a college drop-out. Without it, I’d have been unable to commute from my shared five-room apartment to my two part-time jobs — one making about $5.50 per hour at a record store and the other making a princely $7.00 per hour selling fish off a truck on a suburban New Jersey street corner.
There was something about those old cars — almost as if they had souls. Whether they were killers, like Steven King’s Christine, or cute pals, like Herbie the Love Bug, it was easy to imagine sentience in a way that modern vehicles don’t as readily permit. They were substantial; cars weren’t yet throw-away commodities.
None of which should imply that I wasn’t thrilled to trade in the 98 for a fresh-from-the-factory Pontiac Grand Am GT that made me, as a teenager with no prospects, feel a little more substantial. The dealer gave me $150, so my year’s worth of transportation wound up costing less than two months of my subsequent car payments.
Of course, if the year had been 2009 instead of 1995, Uncle Sam might have given me $4,500, more than a 500% profit on my one-year investment, on top of the year of mobility. As wrangling over additional funding for the Cash for Clunkers program continues, those of us who put in time driving cheap cars to small-time jobs might wonder whether the architects of this bit of “stimulus” considered the personal economic equations of the poorly paid. The difficulty of finding passable three-figure vehicles will probably prove proportional to the duration of government giveaways, and some folks might decide that it just isn’t worthwhile to work at all.
The move by the government just enables, much like spouses of alcoholics, those who never had the foresight to realize that all cars will eventually need repairs.
Instead of planning for the future like most responsible people, the Obamanator has played rope-a-dope with the Obama-will-help-me-with-my-mortgage crowd.
Now, instead of a lower insurance premiums, instead of no pesky monthly payments, instead of a low city tax rate, these people that couldn’t afford to fix their cars now have to come up with at least $4500 to register their vehicles, put aside money for the increase in next years city taxes (could this really be the Obamanator’s reason?) and most likely will have a $1000 monthly payment.
Fear not for those bought under the Cash for Clunkers program and who will experience ‘buyers remorse’ in November. I’d bet the Obamanator will bail them out too.
Dealers often use the bait ‘n switch routine to draw in customers to a more expensive vehicle and now Government Motors has now outdone any dealer on the grandest of scales.
While tobacco manufacturers use nicotine to keep the user hooked into their products, the Obamanator pretty much uses the very same addiction: dependency.
Good point Roland.
In other words, what we have here is a Barney Frank subprime redux, only this time with cars instead of housing.
Ton W., BINGO!!
Not to mention the inevitable result of crushing tens of thousands of running used cars will be higher used car prices. Meanwhile, the local mom and pop car dealers are probably losing any customers they had for newer used models to new car dealers.
Incidentally, I’ve noticed that manufacturer rebates are greatly reduced from this time last year, so it might even be a zero sum gain for gullible consumers.
When the program finally ends, look for dealerships to do commercials such as “we’re continuing the cash for clunkers program” and just marking up their prices to compensate.
80% of the energy use a car represents is used during the manufacturing process. Looks like we’re going to be ramping that up, perhaps?
And for rolling hazardous waste sites to boot.
I assumed this program was developed to help out Government Motors. Now I see the big winners so far are Toyota, Honda and Hyundai.
Today I stopped by my local Ford dealer to get a piece for my 20 year old Ford. I asked about the “Clunker Law” and whether Ford was getting it (I thought it might just be GM and Chrysler), he tells me that Hyundai has sold the most cars under it. I didn’t demand verification. This came up in a news story the Feds have not yet sorted the data to determine if this is true. The government had better start making the “cars that Americans want”.
How smart do you have to be to figure that you could save more money by junking the clunker and buying a year old car?
This crowd will get this. I have been attending a lot of industrial auctions lately. There are a number of people showing up in T-shirts which read “Reardon Metals”.
>This crowd will get this. I have been attending a lot of industrial auctions lately. There are a number of people showing up in T-shirts which read “Reardon Metals”.
Oh my. The galt of those people!
; -)
Justin, had 1995 been 2009, you could have gotten $4,500 for your Oldsmobile 98 when buying a new car. But had 1994 (the year you bought the Olds 98) been 2009, you wouldn’t have been able to find a used car to buy for $700 that could take you to your two jobs, because almost all of those used cars would have been traded in for $4,500 and destroyed by the government (owners of the Olds 98 and its ilk would get paid far more to send them to the landfill than to sell them to someone that needs a car).
BTW, Justin, I wasn’t implying in my prior post that you didn’t know what effect the Cash for Clunkers program will have on persons looking for cheap used cars; I just wanted to express it using the “if the year had been 2009 instead of . . .” example that you had provided.