Mark asks…
Results of the “CASH FOR CLUNKERS”?
Results of the “CASH FOR CLUNKERS” Plan as I understand it from the information published by the White house staff on Cars.gov
The vehicle must be less than 25 years old on the trade-in date
The trade-in vehicle must get 18 or less MPG
Eligible replacement cars must get 25 or more miles per gallon
700,000 clunkers taken off the roads, replaced by far more fuel efficient vehicles
This program was funded by $3 billion provided by Congress.
Let’s figure this out in real terms
A vehicle that gets 15 miles per gallon and travels 12,000 miles per year uses 800 gallons of gas per year.
A vehicle that gets 25 miles per gallon and travels 12,000 miles per year uses 480 gallons of gas per year.
So, the average “CASH FOR CLUNKERS” transaction will reduce U.S gasoline consumption by 320 gallons per years each.
So that is a savings of 224 million gallons of fuel per year..
This equates to about 5 million barrels of oil according to the American Petroleum Institute.
5 million barrels is about 1/4 of one days consumption in the U.S. also according to the American Petroleum Institute.
As of this writing crude oil was 68.88 per barrel ( 9/14/09) but let’s use $70 per barrel to round off the numbers.
This means well will save $350 million per year in crude oil.
So we spent $3 billion in future tax dollar plus interest to save $350 million
HOW GOOD A DEAL WAS THAT ???
.
If that does not scare you enough, these are the same people who will soon control your health care.
.
A Modest Proposer
I waited for some one to try to justify this with time and pollution but I was ready for this.
The anual interest on $3,000,000,000 at say 4% (mostlikely higher) compounded daily (like a real loan) is $20,120,870.40 If we only pay the interest at the end of the cycle we will still owe $3,000,000,000
The life of these cars purchased will be around 7 years.
Lets crunch numbers again.
$3,000,000,000 + ($20120870.40 x 7) = $3,140,846,092.80
So your money savings and payback will never equal the outlay to the program.
Now as far as pollution is concerned, most states require a regular emissions check to be passed or the car loses its tags.
So the polluters will be removed from the street.
As for selling the scrap, That has already cost more than the scrap value because of the low price currently in the scrap market.
No matter how you look at it, this program is a loser for the economy
.
CSC101 Customer Service answers:
The important thing is most of the followers think that it is good for the US and that is all that matters in the polls and elections…….politicians have figured out that it is easier to lie and convince 51% of the people of those lies than it is to do it right and care to get elected……..people vote by what they hear ….not what they know
Carol asks…
will the cash for clunkers deal result in a lot of new cars sold? or do you think it won’t really matter?
CSC101 Customer Service answers:
Who knows? Other countries have this program and it seems to have had measureable success.
I think the more interesting question my be
‘will it create a black market for old, crappy cars?’
For example, my Dad has a 1993 Jeep Cherokee with 200,000 miles on it.
Realistically, it is worth $1000 on a good day.
If someone can get $4500 for trading it in for a new car, can he now sell this POS for $3,000 or more?
Michael asks…
Will the ” cash for clunkers ” program ultimately result in ?
Will the ” cash for clunkers ” program ultimately result in the Operation Repo TV Show being seen 3 X per day 7 days a week ?
CSC101 Customer Service answers:
Some profits for car dealers…..mostly foreign makes…no boost in employment for all dealers said no need to hire….
Sad part the program encourages people to go into debt after being told our debt gave us the economic problem.
Longer issue is 3 billion of printed debt….can you say increase the chance of inflation for a three month sales boost?
Courtesy of Y!Answers