[quote=bsrsharma]Getting people already in financial trouble to spend even more money they don’t have
Flu,
I think that comment borders on patronizing (car buyers). Firstly, statistics show most of the buyers have been middle class and better. Secondly, in this day and age, which idiot financier will advance a dodgy loan on a fast depreciating asset? I think most of the buyers are pretty good credit risks. This is a generally good program except for the politically inspired “gerrimandering” of allowing low MPG trucks for purchase. Also, the scrappage could have been done better – for example by offering to exchange the trade in vehicles, when feasible, (for free) with really old & polluting vehicles (like the pre 1990s for example) or donating to Mexico and destroying like number of Mexican clunkers (many without any emission controls and some still using leaded gas).
On the whole, a better program than the completely dysfunctional “foreclosure prevention” crap and other stimulus boondoggle (like wire transferring funds from treasury to Goldman via AIG, almost like in a third world tinpot dictatorship).[/quote]
Aren’t middle class the ones complaining about higher medical costs, jobs going overseas, wages being frozen or cut? I don’t see with the current economic climate how a majority of middle class should be sinking greater depth into debt.
I think there definitely is a priority problem here, and seeing that so many folks are more than willing to spend money on a government subsidized bling, but such abhorrent toward spending more on say health care, sends a pretty clear message to me….Americans haven’t truely experienced enough economic calamity to have learned sh1t about fiscal responsibility.
And frankly,the comment about the “people middle class or better” are car current buyers in this C4C program…I’m assuming by that statement, you’re saying referring to people with more financial capacity and disposable income….Well people in this category don’t ‘need’ a credit to buy a car do they? In fact, I have a few friends that live in RSF and Del Mar(real del mar) whom have bought cars (plural) under the C4C program, some for more than one family member…I had a few friends that bought a car for themselves, and each of their kids (because each of their kids had their clunker in their own names). And they definitely don’t NEED this government subsidy. (Frankly, i would have milked the system too..) I just wonder though how folks feel who can’t afford a home even today feel about indirectly subsidizing someone of my RSF/Del Mar buddies and their kids.
I have a really tough time digesting this “wealth redistribution” to support more consumer spending on cars. A new car for most is most likely a “want” and not a “need”. And in this economic climate, I think for most americans, that any financial $$$$ should be going towards the “need” category and the “savings” category..
So, this is a subsidy to the automakers/dealers, purely. The arguments for environmental gains don’t seem to hold water. For one thing, a good portion of cars from the 80ies are actually more fuel efficient than modern cars… The 80ies honda CRX for instance gets 41 mpg roughly combined, which is about the same as the current generation civic and prius hybrids.
Several reasons for this include (1) arms race from auto manufacturers…ie horsepower wars… and (2) cars these days are weigh like porky pig, with the aforementioned hybrids weighing 1000lbs more than the CRX. That’s we’re i think the auto makers should be investing r&d…How to make the bloated pigs less bloated via composite materials while preserving strength. Some auto companies got that going on with Aluminum, asf, and carbon fiber….Vettes, BMW and Audi come to mind.
Second, most of these “clunkers” are just going to the landfill…Those cars could have been recycled for parts. Also, I wonder what this will do to the used car market.
You should have seen some of their cars that some of these RSFs/Del Mar buddies trashed. Some of them were early model lexuses, honda/toyota minivans, that ran just fine but got say 17mpg and were below the $4500 in the dealer trade in value, so they just didn’t go through the hassle of doing private sales and just trashed the cars under C4C. For instance, an early 90ies Lexus LS400 gets less than $3500 at dealer trade in, and meets the C4C program. and that car was immaculate.
Well, anyway, like I said… all this consumer spending at least the equity markets like it (for now)….I’ve seen companies that are so heavily dependent on consumers spending money they don’t have like American Express rise from $18 during the early year to $33, and I’ll be laughing my ass of even harder if I see shitygroup go from $1 to $5 or higher, because it’s highly unlikely it will ever go back to $1. So, I’m not complaining. I do feel bad for a lot of the cars people are destroying…To me it’s like putting your dog to death because you want a new puppy.
Anyway, like housing, I’m sitting out on a new car purchase. I have a feeling after this C4C program runs out, you might find a good deal on a car….Seems like dealer inventories are hitting lows, and that probably means that auto companies are going to ramp up production to meet demand to squeeze every nickel out of consumers…However,it’s just a short demand…Sine auto manufacturers can’t simply change supply as quickly to meet a much more fluid consumer demand…I suspect that just about when the new cars start hitting the showrooms again, the $2billion will be gone, and suddenly, we’re back to square one…Dealers with excess inventory without knowing what to do with them, and auto companies having to write down big losses. just you watch…
