“Here I stand. I can do no other.” In other words, Congress is about to pass the famous “Cash for Clunkers” bill designed to boost car sales. And I think it is a bad idea.
Don’t get me wrong. I want Detroit to sell more cars. I did my puny part by buying a new car from a Ford division in April.
But this bill makes no sense.
When I first heard about it, I thought, great. This will get those fume-belching rattletraps off the road. You know, those ancient 1970-something cars, with doors held together with coat hangers. I had a Chevy like that in college. It got eight miles to the gallon.
But this cash-for-clunkers bill won’t touch those.
Instead, it is designed to help middle-class people upgrade their current chariot, and I think it has vast potential for fraud and abuse. For one thing, as Sen. Susan Collins of Maine noted, you could use the voucher to buy a new gas-guzzling Hummer H3.
Here’s how the bill would work. Now, there are minor differences between the Senate and House versions, but the essentials look like this. Only cars made since 1984 would qualify.
You could get a voucher for $3,500 if you purchase or lease a new car that gets at least four miles to the gallon more than your old one. That would go up a thousand dollars if you get a new car that gets ten miles to the gallon more.
The catch is that the dealer can’t resell your old car; he or she will have to scrap it. So here’s the problem. First, if your old car is worth more than the voucher, you’d be nuts to participate.
Second, if I want to be some environmental hero, and bring in a 1985 Corvette, do you really think the dealer will scrap it - or do you think he will sell it on the black market?
I think there is going to be a lot of that - not with Corvettes, but with old Tauruses and Chevy Impalas. Here a little secret. Most of the people who drive clunkers are poor. Even if their car qualifies for the program, they aren’t going to be able to buy a new Ford Escape or a new anything else with that voucher. They can buy the sort of cars that are supposed to be scrapped.
Ah, but this will still stimulate car sales.
Well, yes. But let me quote Consumer Reports. “While the measure is designed to help ailing US automakers, we found most of the new models we’d recommend as replacements are made in Japan.” Still, this is going to pass anyway, because they’ve added it to a bill to fund supplies for our soldiers in Afghanistan.
Nice trick, that, attaching one bill to a totally unrelated bill. Now that’s something that really should be illegal. Maybe I’ll sit in a 1968 Chevy tonight, and write my congressman.
Buyer beware: You should do your homework prior to making a car purchase under the 'cash for clunkers' program. Various news outlets have highlighted some scams, both online and at the dealership that you should look out for.
See: http://tinyurl.com/nlv3ed
Posted by: Jaxon | July 24, 2009 at 05:29 PM