Cash for KlunkersFollow

Has anyone actually done this? Are there any credit requirements? Just curious if we're loaning more money to people who won't be able to pay for the loans they're getting.

anyone? All you liberals think this is such a great plan. Do you any of you know the credit requirements to qualify? Or are we just allowing more money to go to people who have no intention of paying it back?

phil,

What i'm getting at is are the car companies being put in a position, just like the mtg brokers were, where they're giving loans to people who don't have the means to pay it back.

Possibly. If so, this double-stimulates the economy, as now repo people will get more work too.

I have a friend who recently just turned her old car in for a new one. Her old one should have been worth $7000 according to a buyer she used. However, because she was in a no-fault accident years ago, the dealerships nearby would give her only $2000 at most for it. With the cash for clunkers program she got $4500, which made the decision between "Take out a large loan to get a new car now or pay for repairs and hope to save up more money for the future purchase" much easier. Her car was never going to be "worth" as much as it is now with the Clunkers program.

As far as I understand it, she turns in her car, the dealership gets reimbursed from the government. Even if she couldn't pay for the loan in the future, the dealerships have already been given the $4500. However, they wouldn't make the sale in the first place if they didn't have confidence in her ability to pay. At least that was my impression.

I think you're trying to imply that people with bad credit would use this program to get cars, and the dealerships would allow them to do so knowing full well they can't pay, just so they can make a sure-fire $4.5k per car. Uh... I don't think that's how it works; it would bite the dealerships in the butt to do such a thing, and they know it. All basic rules of the sale still apply; a good dealership only sells a car if they have confidence the buyer can pay for it.

But I think the obvious question is: have YOU looked into the requirements? You seem to feel there is a point; I'd assume some research would go into finding out before asking other people.

No, it won't. Sorry, your liberal outrage is a dud on this one.

What, too lazy to do your own research again?

Who qualifies to buy cars is left up to the car dealerships. The debt a consumer would accrue is lowered by up to $4500 but it's up to the dealerships. So if dealerships are really stupid and sell to people who can't afford it that's their problem, and nothing to do with the government. I don't think there's any forcing dealerships to sell cars going on here, so your fears are resting on the shoulders of the dealership owners.

I'm sort of surprised to find you opposed to this program, it's giving money pretty much directly back to people, without a ton of regulation. Wouldn't this be awesome?

Also referring to the language of your OP, "we're" not loaning anyone anything. The dealerships or a bank are doing that.

Edited, Aug 14th 2009 3:03pm by Xsarus

Yeah. The dealership hands out the rebate first and then gets reimbursed by the government. Aside from the increased business, they gain nothing on each deal, so there's no reason they'd change their sale requirements. No reason to either, since the demand is so high. They can presumably pick and choose who they sell to.



It does have the virtue of being pretty much the only actual "stimulus" program we've seen out of the government so far. On that measure, it's a pretty decent program.

My only problem with it is that it's got a kind of split brain thing going on. As a stimulus program, "cash for clunkers" implies that we're helping people with old beat up cars get new ones they might not otherwise be able to afford. That's a good thing, right? But the mileage requirements tend to not actually focus this at true "clunkers" but rather fuel inefficient cars. The majority of cars turned in for the rebate so far are larger SUVs. So we're not helping the working class folks so much as the middle class folks who bought into big fuel guzzlers.

Which, if your goal is to eliminate gas guzzlers, is perfectly ok as well. It's just that the two things seem at odds with each other. If you bought a good economy car 10 years ago, and it's now worn out, you likely don't qualify. But if you splurged on a Ford Escalade, it qualifies as a "clunker" now. I suppose it's just a language issue, but it still bothers me a bit. I get the objective, but we're basically rewarding people who made bad choices.

Every time you say mtg I immediately think Magic: The Gathering. Just saying.

Welcome to a society.

@Gbaji: I think the program is pretty much just about getting people to buy cars to stimulate that area. It has some language that implies stuff like environmentalism or whatever, but that's just politics, as it's really not about that.

It's not an environmental measure.