Dy’er Sez: A good deal for the new car dealers and auto manufacturers…if they even all get paid what they are supposed to from the DOT. Time will tell on that score, but as this article points out only 40% of the rebate requests have even been reviewed…which means that auto dealers are holding on to 60% of the debt pile created by the program. If they don’t get paid, we’ll see lots of closings of dealerships.
The biggest winners (and in my opinion, the whole reason that the program was floated in the first place) are the banks. The number of car loans that they have signed onto due to the program is staggering.
The biggest losers are, as usual, the American people. Sure, folks got some nice cash bonuses for their trade-ins, but the downside is that all those cars that were traded in were scrapped as junk. So, junk yard trawlers, auto parts manufacturers, used car dealerships, and auto mechanics are on the short side of the stick on this one. Additionally, folks who can only scrape together a few hundred to a thousand dollars for a vehicle are now not able to purchase that vehicle due to a better offer being made by the government; perhaps a few less people will be able to get or retain a job due to no car.
Where is all this money coming from to fund the whole shebang…out of the pockets of the American tax-payer. Where are all the profits going? To the banks and the auto manufactures, whom the government has already bestowed trillions of dollars in bail-out money to.
The president said in a speech on Thursday that the program was successful beyond anybody’s imagination. If the yard-stick for success is measured by how the ‘rich get richer and the poor get the picture’, then he’s right on the money.
Story from the New York Times:
Obama to End ‘Cash for Clunkers’ on Monday
By THE ASSOCIATED PRESS
WASHINGTON (AP) — The Obama administration will end the popular $3 billion Cash for Clunkers program on Monday, giving car shoppers a few more days to take advantage of big government incentives.
The Transportation Department said Thursday that the government will wind down the program on Monday at 8 p.m. EDT. Car buyers can receive rebates of $3,500 or $4,500 for trading in older vehicles for new, more fuel-efficient models.
Transportation Secretary Ray LaHood said the program has been ”a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work.” He said the department was ”working toward an orderly wind down of this very popular program.”
- Was ‘Cash for Clunkers’ a Clunker? (curiouscapitalist.blogs.time.com)
- Cash for Clunkers fraud investigation begins (autoblog.com)