Last week, my husband and I bought a new Honda Fit. We have wanted one since 2005, when we had to settle for a Honda Civic (an excellent car) since our 1990 Toyota Corolla was literally rotting out from under us. Since then, we've been looking for a used Fit, to no avail. This summer, we decided to bite the bullet and just sell our car and buy a new Fit. Then, along came Cash for Clunkers (technically, the Car Allowance Rebate System). Not only did we not get a deal on financing a new Fit, but the market fell out of the used car market because of this program, so we didn't get as much for our Civic as we had planned. So, the first answer to the title question is: Not us!
One group that benefited from CARS was those with "clunkers", defined by the program as those vehicles that get lousy gas mileage (to paraphrase). So, while we and others like us have been buying only four cylinder cars for the last twenty years in order to foster fuel efficiency, others who were not so energy conscious got a cash bonus this summer. How nice! Not only did they get to use more than their fair share of gasoline all these years-not for work purposes, mind you, but to ferry the kids around and go grocery shopping-but they also got REWARDED! Unlike my spouse and I, who were unable to take advantage of this program because our car got 40 MPG. What a couple of dummies-we should have bought a Chevy Tahoe four years ago (used, of course)!
The groups that truly made out like bandits, however, are the new car manufacturers and dealers. The industry posted a 2.4% gain in sales due to this program, while the rest of the economy stayed flat or declined. There does appear to be a problem actually getting the money to the dealerships, though, with many suspending the program until they get paid back by Uncle Sam. Well, at least they'll have to wait a bit for their free money.
What if that money had come directly to consumers? If the government had divided up that $3 billion among U.S. taxpayers over the age of 18 (let's estimate this number at 200 million), each of us would have received a check for $15,000. Not a fortune, but, hey-that's almost exactly the price of a 2009 Honda Fit! We sure could have used that money. Consumers rule 70% of the economy, so even if most didn't buy a car, the ecomomy would still have gotten a boost. Perhaps some would be able to catch up on their mortgage payments, thereby avoiding foreclosure, since the mortgage relief program isn't working out too well. Not as glitzy as a new car, but much more important to cash-strapped working families.
Ah, well, it's all over but the shouting, now. On the bright side, we got the car we wanted, and thousands of gas guzzlers will never drink at another gas pump. I also won't have to grouse as much when I see a huge SUV pass me on the highway, since there will be fewer of those around. Now, if they only take my advice for their next bailout idea...
One group that benefited from CARS was those with "clunkers", defined by the program as those vehicles that get lousy gas mileage (to paraphrase). So, while we and others like us have been buying only four cylinder cars for the last twenty years in order to foster fuel efficiency, others who were not so energy conscious got a cash bonus this summer. How nice! Not only did they get to use more than their fair share of gasoline all these years-not for work purposes, mind you, but to ferry the kids around and go grocery shopping-but they also got REWARDED! Unlike my spouse and I, who were unable to take advantage of this program because our car got 40 MPG. What a couple of dummies-we should have bought a Chevy Tahoe four years ago (used, of course)!
The groups that truly made out like bandits, however, are the new car manufacturers and dealers. The industry posted a 2.4% gain in sales due to this program, while the rest of the economy stayed flat or declined. There does appear to be a problem actually getting the money to the dealerships, though, with many suspending the program until they get paid back by Uncle Sam. Well, at least they'll have to wait a bit for their free money.
What if that money had come directly to consumers? If the government had divided up that $3 billion among U.S. taxpayers over the age of 18 (let's estimate this number at 200 million), each of us would have received a check for $15,000. Not a fortune, but, hey-that's almost exactly the price of a 2009 Honda Fit! We sure could have used that money. Consumers rule 70% of the economy, so even if most didn't buy a car, the ecomomy would still have gotten a boost. Perhaps some would be able to catch up on their mortgage payments, thereby avoiding foreclosure, since the mortgage relief program isn't working out too well. Not as glitzy as a new car, but much more important to cash-strapped working families.
Ah, well, it's all over but the shouting, now. On the bright side, we got the car we wanted, and thousands of gas guzzlers will never drink at another gas pump. I also won't have to grouse as much when I see a huge SUV pass me on the highway, since there will be fewer of those around. Now, if they only take my advice for their next bailout idea...
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