Clunker, redefined.

[Bill Shaw]

Now that we've passed two funding phases within 8 days, some points I haven't seen bandied about over the airwaves much...

First, the one that impacts me, personally. After laying out $8,000 cash on a 20mpg. 2001 S10 about 18 months ago, it seemed I was in pretty good shape. The goal was to shed the -10mpg F150 I was using. Mission accomplished, and then some. Got $500 short-selling the old ride, which was used to purchase the kickbutt Pioneer system for my new wheels.

Also, it was a nice asset to have. My attraction to this particular truck was that it only had 50,000 miles on it. There had been a 'hit' on it, but that had seemed (and since, proven) to be repaired well. Leaving a piece of collateral which could be used at some future point, if raising more than a few thousand bucks made sense.

Today, with only 15,000 additional miles on it, the trade in value of it is... identical to that of a "clunker". Thanks Obama

The very real impact is an inability to flip it to purchase a $1000 trailer, about $2000 worth of equipment, and a mid-sized truck capable of towing everything.

No addition to my boss's arsenal of services. No new business opportunity seized. No jobs created providing those services, since I couldn't do all this work by myself.

Second overall element, the used car dealers are getting crushed.

Lightly mentioned in reports now (not before the recent cash reup of the program a few days ago), is activity has come to a virtual halt. Fielding a couple dozen trade-ins a week until recently, they are now seeing nothing going in, or out.

If you have no UAW connection, you're basically screwed.

This program had been portrayed as a "green" (environment) effort, however, the impact is more "green" (economic).

Those new cars nobody has wanted to buy? An enormous sector of the industry has been deflated in order to provide a 25% off coupon to fabricate sales.

I'll pass on expanding the idea that all those homes folks couldn't afford now have a lemon they can't afford in the driveway. But, it has that kind of feel. Detroit produces clearly overpriced, undervalue merchandise, you & I pay- whether we get a vehicle out of the deal, or not.

Lastly, is the provision that calls for the destruction of said "clunkers". Very few parts, aside from the engine hold much value to scappers. Body parts can be repaired with fiberglass. Windows & mirrors manufactured aftermarket. The engines themselves are where the money is. And they are required to be destroyed. Dealers must replace the oil in the “clunker” with two quarts of sodium silicate solution and run the engine for up to seven minutes to sieze it. So, even if lots can scrape together a few salvageable parts, the motor that powers the vehicles able to use them now exist in much smaller numbers.

I certainly hope the Obamanation never gets around to "rescuing" the construction business.

Things were just starting to look up.

[spoc22]

And don't forget the government, via this program, is subsidizing an industry in which they own 60% of two of the major players. No conflict of interest there.

[StockTrader]

Originally Posted by spoc22

And don't forget the government, via this program, is subsidizing an industry in which they own 60% of two of the major players. No conflict of interest there.

EXACTLY!

Nick