Tuesday, August 11, 2009

Cash for my Clunker?

It's been a chorus, these last few weeks. As soon as I roll up the driveway in my big, cream 'Locomotive,' somebody starts yelling how I qualify for 'cash for clunkers.'

"D'you know how much that car is worth? You can get $4,500 for that thing!"

True, $4,500 is considerably more than my car is actually worth (I picked up The Locomotive for a grand) but it still strikes me that 'trading it in' is a complete false economy.

For a start, there's not a single car retailing for under $20,000 that I would even consider buying. I'm not a fan of new cars anyway, so trading in my stylin' Lincoln for a limp replacement doesn't fill me with any enthusiasm whatsoever.

Secondly, buying a new car means monthly payments. Mummy Militant's Toyota costs us $199 a month and pretty much any new car - even with Obama's 'cash for clunkers' payment - will end up costing us about the same (or considerably more.) My Lincoln costs me nothing per month. Already I'd be losing out by buying a new car!

Then there's a deposit, of course. Two grand is about normal - which isn't going to appear out of thin air. My old car costs me, unsurprisingly, nothing to stick with.

So look at it from my perspective. Instead of sticking with a reliable car that costs me nothing to lease or own, the 'economy' of 'Cash for Clunkers' sees me throw down $2,000 as a deposit, make monthly payments of at least $200, all for a car I didn't even want in the first place!

Even the normal argument - that I'd 'earn my money back' in fuel economy - is false. What I'd save in filling the tank, I'd lose in depreciation and the cost of insuring a brand new motor, (instead of a twenty-year-old 'clunker.')

I can see the appeal of the 'cash for clunkers' scheme - Hell, I'd even have considered it for a 5-speed Ford Mustang - but I'm certainly not the sort of 'clunker' driver who's going to take the cheese this time around.

Sure, my 'clunker' might cost me a car payment every few months in maintenance, but this old bird was rolling down the highway for the last twenty years - and will be doing the same for just as long into the future.

Tomorrow's post: Hopefully how my Lincoln didn't break down by the side of the road.


paul mitchell said...

Roland, looking at this from a personal perspective is ultimately the most important thing, but what the idiots in DC do not realize is that for every older model car they take off the market, the cost of those very same older model cars goes up in direct proportion.

They are in essence making it even harder for poor people to afford transportation to get to their jobs. Democrats KILL poor people. Always have, always will.

Roland Hulme said...

Interesting point, Paul. I'll wait to see if my clunker goes up in value.

I had another criticism... Just like the bailout - buying 'bad assets' and making them tangible, when in reality they were never 'real' assets and were just 'made up' money - the 'cash for clunkers' program covers the cost of the depreciation a car suffers the moment it drives off the lot - another example of the taxpayer being asked to pay for an 'asset' (part of a new car's sticker price) that never really existed in the first place.

paul mitchell said...

Dude, if you keep edging to the center, you are going to be called a fascist by your people.

Anonymous said...

Does the government really want to encourage people to buy something they do not want with money they don't have? That's what caused the problems in the first place.