Comments on: Green Stimulus Idea – ‘Cash for Clunkers’ http://earthfirst.com/green-stimulus-idea-%e2%80%93-%e2%80%98cash-for-clunkers%e2%80%99/ A Sharp Eye -- With a Green Edge Tue, 17 Nov 2009 13:33:14 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: Michael Pittinaro http://earthfirst.com/green-stimulus-idea-%e2%80%93-%e2%80%98cash-for-clunkers%e2%80%99/comment-page-1/#comment-6047 Michael Pittinaro Fri, 30 Jan 2009 18:01:26 +0000 http://earthfirst.com/?p=1794#comment-6047 Well put, Anderson. In addition (from the SEMA website): • “Cash for Clunkers” programs threaten enthusiasts nationwide with the loss of valuable parts and parts-cars for repair, restoration, and customization projects. The programs also risk destroying classic, historic and special-interest vehicles, our American heritage. • Cars turned in for scrappage often barely run, or are rarely-driven second or third vehicles that have a minimal impact on overall fuel economy or emissions. • “Cash for Clunkers” programs will reduce the availability of affordable transportation and repair parts used by low-income drivers. It will also compete with the Salvation Army, the Purple Heart and other charities that rely on vehicle donations to raise money. • “Cash for Clunkers” ignores better policy options. If Congress wants to act, support for repair and upgrade is a better choice and a win-win for consumers, dealers, manufacturers and repair shops. Significant emissions and fuel economy improvements can be achieved in older vehicles through relatively simple and inexpensive means: repaired/replaced exhaust systems, tune-ups, etc. Well put, Anderson. In addition (from the SEMA website):

• “Cash for Clunkers” programs threaten enthusiasts nationwide with the loss of valuable parts and parts-cars for repair, restoration, and customization projects. The programs also risk destroying classic, historic and special-interest vehicles, our American heritage.

• Cars turned in for scrappage often barely run, or are rarely-driven second or third vehicles that have a minimal impact on overall fuel economy or emissions.

• “Cash for Clunkers” programs will reduce the availability of affordable transportation and repair parts used by low-income drivers. It will also compete with the Salvation Army, the Purple Heart and other charities that rely on vehicle donations to raise money.

• “Cash for Clunkers” ignores better policy options. If Congress wants to act, support for repair and upgrade is a better choice and a win-win for consumers, dealers, manufacturers and repair shops. Significant emissions and fuel economy improvements can be achieved in older vehicles through relatively simple and inexpensive means: repaired/replaced exhaust systems, tune-ups, etc.

]]> By: Anderson http://earthfirst.com/green-stimulus-idea-%e2%80%93-%e2%80%98cash-for-clunkers%e2%80%99/comment-page-1/#comment-2232 Anderson Wed, 06 Aug 2008 14:48:12 +0000 http://earthfirst.com/?p=1794#comment-2232 This idea is poorly thought out. Ultimately, this would hurt lower-income consumers. Here's why: 1. The government would be shelling out more than what any dealer or individual would be willing to pay for these vehicles. 2. Sellers would then have no logical reason for selling them to anyone other than the government because of the 20% premium. 3. Many of these cars would go out of circulation on the open market (the main goal of the program). 4. Individuals would be forced to buy newer "non-clunker" vehicles. Generally speaking, these would cost more. 5. Absent a supply of clunkers, the next cheapest segment of the car market (let's call it clunker-plus) would become more valuable because of the increase in demand. 6. This increase in value, combined with the fact that clunker-plus cars would naturally be more expensive than clunkers would mean that the the least expensive cars on the market would be dramatically more expensive. This disproportionately affects individuals with lower incomes who have smaller transportation budgets with which to work. 7. I suppose the natural argument is that the people trading in cars at the 20% premium could use that to pay for a better car. However, this means that the poor would have to have a car to trade in order to escape the negative effects above. If a low-income parent wanted/needed to purchase a car for a child or replace a car totaled in a accident, or did not have a car to trade in for whatever reason, they would still be saddled with the higher costs without reaping any of the benefits. This idea is poorly thought out. Ultimately, this would hurt lower-income consumers. Here’s why:
1. The government would be shelling out more than what any dealer or individual would be willing to pay for these vehicles.
2. Sellers would then have no logical reason for selling them to anyone other than the government because of the 20% premium.
3. Many of these cars would go out of circulation on the open market (the main goal of the program).
4. Individuals would be forced to buy newer “non-clunker” vehicles. Generally speaking, these would cost more.
5. Absent a supply of clunkers, the next cheapest segment of the car market (let’s call it clunker-plus) would become more valuable because of the increase in demand.
6. This increase in value, combined with the fact that clunker-plus cars would naturally be more expensive than clunkers would mean that the the least expensive cars on the market would be dramatically more expensive. This disproportionately affects individuals with lower incomes who have smaller transportation budgets with which to work.
7. I suppose the natural argument is that the people trading in cars at the 20% premium could use that to pay for a better car. However, this means that the poor would have to have a car to trade in order to escape the negative effects above. If a low-income parent wanted/needed to purchase a car for a child or replace a car totaled in a accident, or did not have a car to trade in for whatever reason, they would still be saddled with the higher costs without reaping any of the benefits.

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