Posted on 08/26/2010 8:57:31 AM PDT by Mobile Vulgus
In yet another see-I-told-you-so moment, Obama's cash for clunkers program is now hurting lower income folks who wish to buy used cars by driving costs up an average of $1,800 above what used car prices were at this time last year.
In August of 2009 I wrote that Obama's cash for clunkers program would "soon be materially hurting the lower middle classes" that aren't rich enough to buy new cars. With the rule that the cars turned in under the clunkers program had to be destroyed many thousands of good, serviceable used cars were summarily removed from the used market. Fewer cars on the used market means the ones that are left will see higher prices. It's a simple supply and demand principle here. Apparently Obama was blissfully unaware of such a simple truth.
Now a report on Edmunds Daily, a car shopping advice service website, is saying that used car buyers are seeing an average of $1,800 more on their purchases. On larger-sized autos it's even higher...
Read the rest at Publiusforum.com...
The “Little People” can take Public Transportation.
oh wait, there’s more! Recent stats showed that the biggest majority of those taking advantage of the program were trading in american made brand cars for Toyotas.
Like this is one of those surprise moments..
BWAHAHAHAHAHAHAH! Elite, “highly educated” ruling class strikes out AGAIN!. BWAHAHAHAHAHAHAHAHAHAHA!
Neighborhood mechanics are hurting too with all the used cars suddenly off the market, replaced by new ones. In addition, all those cars had to be crushed, so low-cost parts from the junkyard are more rare for those who didn’t or couldn’t take advantage of the program.
By my calculation, C4C took less than .3% of the vehicles off the road.
690,000 vehicles of a population of 254,000,000
That seems like a minimal impact to me.
(I still agree it was a bad idea - the Baraqqis used it as added gravy to the UAW)
Cash for clunkers was a totally moronic idea from a bunch of arrogant morons elected by racists and half wits. google bastiat and broken window for a really good explanation was to why this program is beneath stupid (but apparently not the nadir for and his homies).
This was predicted at the time.
I just experienced it although I’m not necessarily a lower class car buyer.
In another unforseen consequence of this regrettable and expensive program, Boise suffered a huge loss of availability of rental cars over the summer because the rental companies took advantage of the high used car prices by dumping their fleets and then holding off on new purchases. It’s annoying that short-sighted beaurocrats spend our money to create havoc and imbalances in the market.
The environmental logic of cash for clunkers also makes no sense. The feds gave people $4000 to improve their gas mileage by 5 mpg. Over the life of a car (150K miles), that translates to a savings of 2500 gallons. Who can make a new car for the equivalent of 2500 gallons of gasoline energy? It takes more power to melt and form the metal and glass, produce the electronics, forge the rubber, deliver and assemble parts, run the factories, transport the workers, and transport the finished products. On top of that, it takes a lot of power to recycle the old car, which by definition of the program was a fully functional car. In summary, a huge waste of money when we can ill afford it.
Factor into that the near impossibility of getting parts from Chrysler and GM since the takeover.
Had a girl roll in a couple of weeks ago and diagnostics revealed her Obama-mobile (bumper stickers, keychain... the whole works) needed a new computer. There was only one available. In the entire country. And after getting it, it was faulty.
She just started blankly as Hubby told her it was slim pickins since the government got involved. “Well, what am I supposed to do about my car?” “Beats me. That was the last computer in the country.” rofl!
I disagree that the consequences were unforseen. I think that the arrogant a$$holes in the 0 administration forsaw them and just didn't (and still don't) care.
Yes and according to another poster who used to be a new car dealer the rental companies are holding on their cars longer because the makers aren't giving them the deals.
This program was nothing more than a scam but it has no effect on the price of used cars. My wife and I just bought two used cars from dealers below the "private sale" price.
Don’t buy into the class warfare.
These people are not best described as “highly educated”. They are the political class.
Although they may have attended top schools, and have degrees - their actions are not defined by their education.
The reason I make this point is that 95% of the “highly educated” are still here, as your Drs and engineers etc - and are more apalled than the lesser educated (if possible) - because we know that these mistakes are easily predictable, and the government did it anyway.
For the people who did this - ideology trumps education. They knew better - but did it anyway.
Point well taken. I'll call them the Elite, snobbish Ruling Class. And I do believe they view themselves as a special class.
Agreed - however - a different way to look -
Auto production - down from 16+MM/year to 12MM/year - last few years.
Take autos at 200MM - to make math easy. 200MM = 12 years of production at 16MM/yr. Last two years we have not produced 8MM cars that were normally produced - half a year of production.
So there is your demand - we are basically “short” 8MM cars - 4% of market.
Drop on top of that - the specific class of crs that were removed from market with clunkers programs - approx 10-12 year old, maybe 1MM cars. Demand at mid incomes oncreases for “average” 4 year old used cars - because we are short 8MM cars. Pushes demand for 6-8 year old cars. Then - the supply shortage of 10-12 year old cars hits, and a double whammy of the “cheap but decent used car market”.
I just plugged numbers to type it quick - but the production downturn is the real driver. Then clunkers adds a special supply contraction.
Another way to view - the cars removed from circulation were not the bad ones - they were the ones with people with assets to buy a new car. So they are really concentrated into a the band of vehicles that would have been “decent used cars”. The 1976 Cutlas Supremes of the world were not traded in because their owners didn’t have the $12K for a new Hyundai. That is why they were still driving the Cutlas.
But - as I tried to point out quickly - it is the produciton supply shock driving the market, then the clunkers just hits right at a bad spot, in a tight market.
Well that sure as hell describes me. We had planned to trade in my wife’s car last year and upgrade to a SUV. We paid it off in Apr instead and have no plans to buy a car or SUV in the immediate future (as long as obama is President).
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