[StBernard] Well now, let's see who got the best of the "Cash for Clunkers" deal.........
Westley at da-parish.com
Mon Oct 19 19:38:27 EDT 2009
Well now, let's see who got the best of the "Cash for Clunkers"
Check the math. The irony is that the people who took the bait on this deal
are the ones who can least afford the losses they incurred.
This article is worth the little bit of time to read.
By the way, a Dallas car dealer, 30 years in the business, told me that many
if not most of the "clunkers" were spirited out of the US and NOT destroyed.
They ended up on used car lots in Mexico or were scavenged for parts. It's
illegal of course, but laws never had any effect on the used car business!!!
Further, many of the new car dealers have yet to collect from the US Gov.
This is from a car dealer out in Los Angeles, CA.
SO...you took FEDZILLA up on its offer of $4500. dollars to trade in your
old "Clunker" (interesting choice of words)? Well, let's see who got the
best of that "deal"...
If you traded in a clunker worth $3500, you got $4500 off for an apparent
"savings" of $1000. You could have gotten $3,500 if you had just traded the
car in. So you really are $1,000 ahead (depending on your clunker's value)
at this point. Not too bad...
However, you WILL have to pay taxes on the $4500 come April 15th (something
that no auto dealer will tell you). If you are in the 30% tax bracket, you
will pay $1350 on that $4500.
So, rather than save $1000, you will actually pay an extra $350 to the feds.
In addition, you traded in a car that was most likely paid for. Now you
have 4 or 5 years of payments on a car that you did not need, trading in a
"clunker" that was costing you less to run than the payments that you will
now be making. Even if you
save $1,000 dollars a year in gas due to better mileage, you're still gonna
be in the red for five years....hello?
But wait, it gets even better: you also got ripped off by the dealer. For
example, the month before the "cash for clunkers" program started, every
dealer here in LA was selling the Ford Focus with all the goodies including
A/C, auto transmission, power windows, etc for $12,500 because competition
was stiff due to poor sales
from the stalled economy.
When "cash for clunkers" came along, they stopped discounting them and
instead sold them at the list price of $15,500. So, you paid $3000 more
than you would have the month before. Honda, Toyota , and Kia played the
same list price game that Ford and Chevy did. Now let's do the math...
You traded in a car worth: $3500
You got a discount of: $4500
Net so far +$1000
But you have to pay: $1350 in taxes on the $4500
Net so far: -$ 350 (that's minus...in the
And you paid: $3000 more than the car was
selling for the
Net Loss: -$3350
We could also add in the additional taxes (sales tax, state tax, dealer
prep, etc.) on the extra $3000 that you paid for the car, along with the
five years of interest on the car loan; but let's just stop here while you
kick yourself. Suffice it to say that those costs will be much higher than
any savings you get from "better mileage".
So who actually made out on the deal? FEDZILLA collected taxes on the car
along with taxes on the $4500 they "gave" you. The car dealers made an
extra $3000 or more on every car they sold along with the kickbacks from the
manufacturers and the loan companies. Manufacturers got to dump lots of
cars they could not give away the month before. Lots of good or repairable
used cars got taken off the
market, crushed and sold as scrap metal to(ready for this?) CHINA ! (Look
it up...) And the poor consumer got saddled with even more debt that they
FEDZILLA'S merry men (who promised that people making less than $250,000
would pay "not one red cent more in taxes") will make millions in new tax
revenues after convincing Joe Consumer that he was getting $4500 in "free"
money from the "government" In fact, Joe was giving away his $3500 car and
paying an additional $3350 for the privilege. Chicago politics gone
global...with an agenda.
If you find errors in this math, please let me know.. .being a simple guy,
I'm always willing to learn new things; and if you took "advantage" of the
Clunkers deal, I have some swamp land down in Florida that's for sale.
And remember, these are the same Einsteins who want to take control of our
health care system. Hold on to your wallet!!
AND - on top of that many of the "sales" were really "leases" so we have
people who, before the "cash for clunkers" program couldn't afford the
monthly payments for a new car, "leasing" a new car with a 36-60 month term.
Does anyone else see that in 24-36 months there will be a tremendous influx
of "repos"? The owners haven't paid the lease payments, haven't done any
maintenance and have probably abused the cars since they knew that the car
wouldn't be theirs for very long. This will create a tremendously large
pool of poorly maintained and abused "used" cars.
The "new" car dealers can't give away cars today because the potential
buyers have all used the "cash for clunkers" program, the charitable
organizations that relied on donated automobiles are not getting any
donations and WE the taxpayers get the privilege of paying for it and China
benefits from cheap, readily available scrap.
AND - WE elected these idiots!
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