Saturday, April 25, 2009

Cash-for-Clunkers: Another Tax-and-Spend Fiasco

A bill known as Cash-for-Clunkers is slipping in under the radar of most citizens, but it’s another government giveaway that will cost taxpayers. On the surface it sounds great: $3K to turn in your high-emission vehicle and buy a more fuel-efficient car.

I’ve been researching this bill for an interested organization, but I only write about what interests me on my personal blog. I'm all for fuel-efficient cars, but I do not want to pay for someone else's new Lexus hybrid while all I can afford is what I've got.

Here are some of the most important reasons why taxpayers are suckers – again – if we let Congress spend our money on this.

  • The cost of producing each fuel-efficient vehicle offsets the lower-emissions that will be produced. There is no environmental benefit.
  • The emissions standards are not high enough for the trade-ins.

  • Fuel savings are not great enough to compensate for the new car payment over time.

  • The reimbursement is so low that many people are better off selling their older vehicles privately.

  • Destroying older vehicles drives up used-car and parts prices. Hobbyists who restore classic cars are very concerned and are among those who do not support this bill.

  • Now that gas prices are lower, Americans are returning to their love for bigger cars. A cash or tax incentive is not going to change Americans’ love-affair with their cars.

  • American car manufacturers are not in a position to benefit from a spike in sales; their lower-emission vehicles are not yet available in great numbers.

  • The people who will benefit are those who already have enough money to trade in their older cars for a new one. Of course, this will be financed by ordinary people who are struggling to stay afloat.

One drawback I have not found many considering is what we are going to do with the toxic batteries from hybrid and electric cars. This makes sense because the bill does not require purchase of a hybrid car; most purchases will be fuel-efficient internal combustion engines.

Batteries are another cost of hybrid car ownership that often is not considered against the price of owning a hybrid or electric car; it run to a few thousand dollars to replace the battery/ies.

In summary, Cash-for-Clunkers not an idea whose time has come; it’s an idea that taxpayers do not need to finance.

If you want sources, I’ve got dozens of them.


Dogwalkmusings said...

The whole idea, as you've laid out so well, is a "clunker"!

ellen said...

I was wondering about this one myself. My son could use a better car, but what would be paid will not buy him a better one, and there's no way he'd be able to get credit - that's hard to come by these days.