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Getting Screwed by Cash 4 Clunkers?

Four days after it came to life, the allotted funds were expended.  Our elected enlightened ones never expected so many to line up to take advantage of free cash from Congress.  Wait a sec…could this be a parallel we’ll see if Obamacare comes to life?  Let’s save that for another article.

When I first heard of Congress’ Cash-for-Clunkers (C4C)  scheme I didn’t like it, but for the wrong reasons.  I guess I made the mistake of literally interpreting the word “clunker” in the title.  Why I thought our government would be so transparent as to title their program to clearly communicate its intent I’ll never know.

I wrongly assumed that scammers would rush to junk yards, pay a couple of hundred dollars for piece of junk, drag it or pull it to a dealer, and use it for a $4500 downpayment on a shiny new car.  Voila!  Scam the government.

Well, it turns out the genius’ in Congress thought of that and included requirements to stop such abuses before they happened.  But in the process, this intrusion into the free market, like all government programs intended to fix problems the government created, spawns several more catastrophes we’ll feel the effects of down the road.

Let me start by saying I’m debt-free.  My home, my cars, and everything else I own are paid for, free and clear.  This didn’t come to be by luck or accident, but by sacrifice and well-laid plans.  Thanks to C4C, a key strategy I employed in those plans will no longer be available to me or others who might wish to take a similar path in order to enjoy a life free of monthly payments and negative net worth.

You see, the last new vehicle I purchased was in 1988.  I was 21 at the time.  Two years later I needed to sell that vehicle after enlisting in the Marines.  I was upside down and had to pay an extra $300 to relieve myself of ownership of that ride.  I swore that would never happen again, and it hasn’t.  Since that day, I’ve never owed more on a vehicle than what it was worth.

To avoid that undesirable predicament, I purchased older vehicles with high miles–that I could pay cash for.  The first was a 1982 Ford Courier with just under 100,000 miles that I paid $700 for at a Southwestern Bell equipment auction.  It was ugly as hell, but well-maintained.  I drove it for two years, and taught myself to work on it.   When the starter went out, I bought a book, some tools, a new starter, and replaced it.  I sold this truck and bought a full-size 1980 Chevrolet pickup for $1500.   It took me where I needed to go for two more years.  I repeated this numerous times over the years and haven’t had a car payment for a vehicle on which I was the primary driver for the past 19 years.

Thanks to the social engineers in DC, a life without car payments may no longer be possible after my current vehicle wears out.

If this program is still in place (Remember the words of Ronald Reagan, “The closest thing to eternal life on Earth is a government program.”) when I’m in the market for my next car, it will artificially add $3,500-$4,500 to the price of every car I’d otherwise be interested in purchasing.  At best, a comparable vehicle to one I’d have purchased a year ago with $2,000 won’t sell to a private buyer for less than $4,500.  It won’t last me any longer than the one I’m driving now, but thanks to the government it’ll cost me more than 3 times as much to drive it.  And the difference between paying $2,000 and $4,500 will force many to finance these cars when they could have paid cash if our intrusive government would have just let the market work.

But $4,500 likely won’t touch one of these cars either, because our genius’ in Washington are also drastically depleting the supply of such vehicles.  Though the cars taken on trade in the C4C program must be driveable, our government is mandating they be rendered inoperable and destroyed.  So far, a quarter of a million driveable used vehicles have been taken off the road.  The most basic law of economics, supply-and-demand, guarantees an increase in price will result from this program.

These cars will no longer be worth buying at their government-inflated prices.  That will leave me with the choice of buying even older cars or buying a new car.  Of course, if too many people turn to buying those (really) old clunkers, that really are gas-guzzlers, I’m sure our brilliant social engineers in DC will change the rules to take away that option also.  Eventually, that will leave me with no choice but a new vehicle that I’ll almost certainly be forced to finance.

I’ve spent my adult life carefully plotting to keep from having a car payment.  Silly me, I considered this responsible.  Now the Socialist social engineers that run our government have identified folks like me as part of the problem.  They’ve designed and implemented a scheme intended to strip from me the freedom of living life without car payments.  They’ve determined that I no longer have the right to be debt free.  That it’s only fair that I too am forced to purchase a vehicle that I’ll have to finance.

After all, in our Obamatopia, if anyone must make a car payment, it’s our collective responsibility to share that burden.  You see, if we’re all forced to buy new cars, the newly acquired taxpayer owned auto companies can continue selling unaffordable cars with affordable payments for a little while longer.  In effect, by forcing me to buy a new car, it will lower the payment of those who got themselves over-extended by buying cars they couldn’t afford.

You know, back to that spread-the-wealth thing Obama loves so much.

The House of Representatives has already voted to spread another $2 billion of your wealth to help screw me and others like me over.  This should take another half a million good, operable, used vehicles off the road and into the scrap heap.  Luckily, the US Senate is balking at handing another $2 billion to the auto companies and taking the next step to permanently increasing the cost of new and used cars by $4,500.

Senator John McCain (R-AZ) has threatened to veto any extension of the program and Senator Jim Demint (R-SC) says he’s weighing options and will fight if there’s a chance to stop it.  But Republicans aren’t the only obstacles to expanding one more government giveaway to subsidize the American auto industry.  Senator Claire McCaskill (D-MO) on Twitter tweeted today, “We simply cannot afford any more taxpayr $ to extend cash for clunkers. Idea was to prime the pump, not subsidize auto purchases forever.”  Other Dems are opposed because they say the program doesn’t mandate enough increased fuel economy.

Bottom line, if these Senators hold the line and refuse to make C4C a permanent program, and if I can make my 12-year-old car with 140K miles last another couple of years, I just might be able to keep living life without car payments.

But not if President Obama has anything to do with it.

August 1, 2009 Posted by | Obama | , , , , | 10 Comments