EVERY EFFING TIME!
Posted on 02/08/2010 10:02:33 PM PST by 2ndDivisionVet
The Car Allowance Rebate System certainly helped carmakers sell more cars this summer than they would have in this troubled economy. But six months later, there's evidence that some "Cash for Clunkers" buyers have a higher repossession and late payment rate than the average consumer.
According to CNW Research, the repo rate among high-risk CARS buyers is more than twice that of the same category of consumers that didn't utilize the program. Of subprime buyers who used the government-funded program, nearly 5 percent have had their newly purchased vehicles repossessed. The same group of buyers who didn't use the program has just over a 2-percent rate of repossession.
"Faced with a new monthly payment of $250 to $350 per month, many of the users admit they didn't think past the new car smell," CNW said in a release. "Most, however, anticipated the economy improving substantially between last July and today and felt that improvement would give them the financial boost necessary to at least offset some of the additional monthly payment."
Turns out, the high-risk buyers involved in purchasing more than 600,000 vehicles under the program also have a higher rate of buyer's remorse than non C4C buyers. Nearly 20 percent of the buyers surveyed that used the program regret the purchase they made, while buyer's remorse among non-incentive users remains low at only 5 percent.
Which is ironic within itself, being my banker told me virtually the same thing when I asked him about the cash-4-clunkers program soon after it started.
(Bad english for a bad idea.)
This was posted elsewhere. Not sure about the numbers.
Subject: CLUNKER MATH
Think of it this way:
A clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year.
A vehicle that travels 12,000 miles a year at 25 mpg uses 480 gallons a year.
So, the average Cash for Clunkers transaction will reduce US gasoline consumption by 320 gallons per year.
They claim 700,000 vehicles so that’s 224 million gallons saved per year.
That equates to a bit over 5 million barrels of oil.
5 million barrels is about 5 hours worth of US consumption.
More importantly, 5 million barrels of oil at $70 per barrel costs about $350 million dollars
So, the government paid $3 billion of our tax dollars to save $350 million.
We spent $8.57 for every dollar saved.
Thanks, that just made my day. /s
EVERY EFFING TIME!
Pulled in consumers who weren’t ready yet.
Yep. In towns around my parts, it’s mostly the perpetually single welfare moms (pros, drugs, pit bulls, etc.) who swapped their boyfriends’ older trucks for new, smaller vehicles since the Cash for Clunkers program got under way. ...ice on the roads about 6 or 7 months of each year.
**** “A clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year.
A vehicle that travels 12,000 miles a year at 25 mpg uses 480 gallons a year.
So, the average Cash for Clunkers transaction will reduce US gasoline consumption by 320 gallons per year.
They claim 700,000 vehicles so that’s 224 million gallons saved per year.
That equates to a bit over 5 million barrels of oil.
5 million barrels is about 5 hours worth of US consumption.
More importantly, 5 million barrels of oil at $70 per barrel costs about $350 million dollars
So, the government paid $3 billion of our tax dollars to save $350 million.
We spent $8.57 for every dollar saved” *****
For the Trip to Hawaii and the moped “ WHAT IS JIMMY CARTER MATH ? “
TT
Another truly grotesque product of this program is its impact on used car prices. Prices on used cars rose dramatically following Clunkers, putting many buyers who could not afford more out of the market.
Can you do that same Math for...
“E85” ((Ethenol)) ?
“Low Sulfur Diesel” ?
How about “ObamaCare” ?
And for the Grand Prize (A Tour of ALGORES private Jet) ...
“Carbon Offsets” ?
TT
Yes you do forget about the used car inventory drop during C4C.
Given the fact that so many cars were just pancaked and cubed there was no corresponding used car hitting the market. I was looking for a used car in August-October last year and the selection wasn’t great, the pricing? The pricing was horrible.
I got very lucky in January though. That’s one ripple in the industry I have never heard about in the MSM. The fact that it disrupted the used car inventory/business for nearly 6 months.
Anyone with an IQ above 80 could have predicted this. People with little means of paying for a car went into dealerships and purcahsed new cars beyond their means with the help of a subsidy.
The loan companies were more than willing to loan the balance for if the car was repossessed, they had equity in the car unless the buyer totally trashes it.
Look for the used car market to be flooded with small cars and make it a buyers market for a while as these repos make their way through the system and we’ll soon hear of “predatory” lending practices by the loan companies.
bttt
Not only that, but for every car that was crushed, that left a parts deficit at junkyards, another business that was detrimentally affected.
Paging Captain Obvious
Surprise, surprise, surprise.
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