Cash for Clunkers thoughts...

[PortDawg]

Here is an interesting look at the cash for clunkers...


The brilliant scam: Bring your clunker to the nearest car dealer and you will get a gift from Obama - $3500 for your junk car to be applied to the purchase of your brand new car.

Ignore all the gas crap and just look at how the stupid car buyer got taken to the cleaners:

If you traded in a clunker worth $3500, you get $4500 off for an apparent "savings" of $1000.

However, you have to pay taxes on the $4500 come April 15th (something that no auto dealer will tell you). If you are in the 30% tax bracket, you will pay $1350 on that $4500. So, rather than save $1000, you actually pay an extra $350 to the feds... In addition, you traded in a car that was most likely paid for. Now you have 4 or 5 years of payments on a car that you did not need, that was costing you less to run than the payments that you will now be making...
But wait; it gets even better: you also got ripped off by the dealer.

For example, every dealer here in LA was selling the Ford Focus with all the goodies, including A/C, auto transmission, power windows, etc for

$12,500 the month before the "cash for clunkers" program started.

When "cash for clunkers" came along, they stopped discounting them and instead sold them at the list price of $15,500. So, you paid $3000 more

Than you would have the month before. (Honda, Toyota, and Kia played the same list price game that Ford and Chevy did).

So let's do the final tally here:

You traded in a car worth: $3500

You got a discount of: $4500
--------
Net so far +$1000
But you have to pay: $1350 in taxes on the $4500
--------
Net so far: -$350 And you paid: $3000 more than the car was selling for the month before

----------
Net -$3350

We could also add in the additional taxes (sales tax, state tax, etc.) on the extra $3000 that you paid for the car, along with the 5 years of

Interest on the car loan, additional insurance cost, additional licensing cost, but let's just stop here.

So who actually made out on the deal? The feds collected taxes on the car along with taxes on the $4500 they "gave" you. The car dealers made an extra $3000 or more on every car they sold along with the kickbacks from the manufacturers and the loan companies. The manufacturers got to dump lots of cars they could not give away the month before. And the poor, stupid consumer got saddled with even more debt that they cannot afford.

Obama and his band of merry men convinced Joe consumer that he was getting $4500 in "free" money from the "government" when in fact, Joe was.

Giving away his $3500 car and paying an additional $3350 for the privilege.

Think this was stupid for those who were crazy enough to swallow this wonderful scheme?

Just wait until we get Obama's nationalized health care with no additional costs over what most of us now pay for health insurance and the best medical care in the world. Think that scheme might be hatched by the same guy who pushed the "Cash for Clunkers"? Do you hear Obama getting ready again to say: "Sucker!!?”

AND ... the "clunkers" were supposedly shredded and sold to CHINA so they could make more junk and sell it back to us...

[Munch]

I bet some people did OK if they actually had a POS that was barely worth $800 and were actually looking for a new ride but as far as I'm concerned it never seemed like that good a deal all around. Not to mention all the scrapped cars that could have been used for parts or sold to the really poor people who drive absolute crap.

It seems if the government honestly cared about the people they would have set up some deal where poor people whose cars don't even run could have gotten these C4C cars. It's all about putting the working man in debt and lining the pockets of the Gov and corporations, nothing more.

[09CTSV]

One part of the equation for taxes, you can write off the taxes on a car purchase for next year. I've got about $3000 to write off on the Caddy. I think the program was still going with the Cash for Clunkers.