Cash for clunkers

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Permalink Reply by Matthew D. Cohen on July 31, 2009 at 7:05pm

Prevention over treatment. Over the long-term, it may be far less expensive to undertake a cash-for-clunkers program than to remediate the environmental (and related) damage caused by such clunkers.

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Permalink Reply by Mark Bublitz on August 3, 2009 at 9:16am

Sorry, I am a numbers guy at heart and the numbers don't add up...not to mention we are subsidizing, basically, government owned companies - but that is another matter. Going into debt for a new car seldom makes economic sense. It is a lifestyle decision. Even hybrids don't pay for themselves in fuel savings (just run the numbers on a std. Civic vs. a Civic hybrid - it takes something like 9 years to pay for the hybrid premium @ $6/gallon).

The real tragedy is we have not identified and targeted accordingly, the environmental cost of burning fossil fuels. As unpopular at it may be, gradually raising the price of gasoline will ween people off of it. We just have to avoid price shocks so people have time to transition out of their current vehicle into new ones. If the "true cost" (either actual or perceived) was factored into operating that "clunker" the market would take care of getting rid of them all by itself.

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Permalink Reply by Mark Bugaieski on August 3, 2009 at 9:30am

This was a topic of discussion on the radio this a.m. One thing that I was surprised about, and maybe I missed it, but the first I heard of it was on car dealer commercials. Seems like there should have been more public debate/discussion about how best to spend the $.

Also, I wonder about the economics of this. The people that are driving "clunkers" are usually doing so becasue they choose to (cars are not imporatant to them and they'd prefer to drive an "old beater " rather than have the status symbol of a $25k car. Or, they're driving them becasue they economically have to.

How many people who couldn't afford a car payment and had no business considering a new/newer car did so and now are going to be in trouble with the payments.

Maybe rebates of a couple of thousand dollars on high-milegae cars would have been a better, more considered alternative?

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