Cash for clunkers alternative

@Debs_place (10525)
United States
August 30, 2009 12:28pm CST
Well the cash for clunkers has come and gone. The government blew a big bunch of cash and the car dealers cleared out some inventory. And maybe we will burn a tiny bit less gas. We will see a blip on the recovery picture What next? I have been thinking about it and maybe what should have been done. Here is what I propose-- bring back the tax deduction that makes the interest on car loans a deduction...for everyone. The interest is deductible. Make this for any car loans until 2015. How will this make a difference -- People can plan for that car payment. The sales of cars will be encourage because the long term cost is down. The sales will not be a giant blip but will take place over years making for a continued growth in the economy. It will not cost the government upfront but will reduce the amount they get in the spring of the year. What do you think? Is this a possible plan? Think it would help? What would you suggest to keep the economy moving.
8 responses
@ShepherdSpy (8562)
• Omagh, Northern Ireland
30 Aug 09
The UK version of this scheme still seems to be running (for now),but personally speaking,I'm between a rock and a hard place for buying a new car! I'm driving a near 10yo car at present as I don't want to be handing out wads of money in payments each month on a fast depreciating shiny metal box that's probably dropped a couple of grand in value once I got it out of the showroom..and I've discovered since the scheme started that my car is A MONTH too young to be eligible! The date that was set as the limit for eligibility has apparently been set in stone,with the result that my car,though 10 years old in the next few weeks, WON'T qualify for the £2000 trade in value offered by the scheme.. You'd think once it reached 10,I'd be in..but because it wasn't 10 before a certain date,I'm out in the cold..ah well,if it breaks,I'll have to trade up to a 9yo vehicle! On the alternatives..a Friend in Spain got a low interest loan to purchase a car..I didn't hear the full details,but here,you had to buy a NEW car,you couldn't just buy a slightly used ex demo car for £2k off..I'd like to see some alternatives too!
@Debs_place (10525)
• United States
31 Aug 09
We should have traded..I have a 12 year old van. It is over 1/2 as old as my son who is in the Navy. We did not have an age limited, we had a mpg minimum limit. So because I went for a fuel efficient car 12 years ago, I get punished now.
• Omagh, Northern Ireland
31 Aug 09
So the car being traded and the car being bought had to meet specific mpg figures under this clunkers scheme before you could trade or buy? Interesting...Here,there was no limit to what you could buy,as long as the manufacturer was taking part in the scheme..I didn't hear of any Ferrari's or Hummers being bought,as most contenders were euroboxes or Asian Imports at the smaller end of the scale..
@Debs_place (10525)
• United States
31 Aug 09
You also had to buy a car that had a certain minimum MPG but I am not sure what it was.
@peavey (16876)
• United States
30 Aug 09
Cash for clunkers was only for people who could afford new cars in the first place. I would imagine that most of the "clunkers" were cars a lot newer than mine. I get 25 mpg and some of the new cars traded for didn't get that much. What's the benefit? Public relations? What would help get our economy started and rolling again would be to remove tax burdens and health insurance burdens from small businesses. They hire more people all together than the huge corporations. Our grass roots, common people are perfectly capable and willing to start new businesses, improve and expand ones they already have and to hire a lot of people, but the government makes sure that they can't.
1 person likes this
@Debs_place (10525)
• United States
31 Aug 09
That is so true...only the people who could afford a car payment benefited. you are in the same boat I was, even if I could afford it, the mileage I get in my mini-van disqualified it as a clunker. You are right, the government has got to encourage small businesses to start and grow, they are the real backbone of this country.
@nangel78 (1458)
• United States
30 Aug 09
I have a car that is paid off and keeping it as long as I can so I found the cash for clunkers to be rather rushed. Yes the environmental cars will help, but it was a quick way to get some money into the system.
1 person likes this
@Debs_place (10525)
• United States
30 Aug 09
That kind of quick fix is like a fad diet. It may work for a bit but ultimately it does not work. It is the long term infusion of money that will keep the economy moving.
@mrbranan (1012)
• United States
30 Aug 09
You know it seems to me that a lot of people couldn't participate in this because they couldn't afford the payments on a new car and lets not even talk about the insurance prices. I think it should have included all the cars on the lot and not just the new ones that way many more of us could have taken advantage of this.
1 person likes this
@Debs_place (10525)
• United States
30 Aug 09
I agree with that...I have a 12 year old minivan, really up there i miles and would have liked a decent used car, I agree that would have been good for it to include used cars.
@rusty2rusty (6765)
• Defiance, Ohio
30 Aug 09
I think that is a great suggestion. With the economy bad and people loosing jobs. The people who really need to get a new car could not afford it for one rason or another. My problem with cash for clunkers is the clunkers being turned in will be disposed of. What about the people who can't aford to uy brand new vehicle? It hurts them. I know I have never brought a vehicle brand new but used. I also think the clash for clunkers her the smaller dealerships who sold used vehices.
1 person likes this
@Debs_place (10525)
• United States
30 Aug 09
I think in the long run it will also hurt re-sales. The person who paid 4 grand less will not mind getting a lower price on their car if they go to trade it in and the guy who paid 4K more will be upset at the resale value. My plan would not affect any of those things. Remember the days when all interest was tax deductible.
1 person likes this
@icehut (508)
30 Aug 09
Theoretically, lowering the interest rate allows more of us to be able to afford loans for purchases such as cars and homes. However, when the government dropped interest rate down to 0.5% here in the UK, house buyers were still unable to buy homes because the money lenders had a tight grip on their funds. Gone were the days when you could borrow twenty times your salary. As interest rate drops, so does the amount we earn in savings. Those that had been responsible and put money aside in to savings were penalised for not spending and ended up paying off loans with their savings that were no longer earning interest of value. Another negative effect was the withdrawl of foreign investment funds in the pound as investors moved their investments in to other money-earning currencies. To add insult to injury, the financial institues that were bailed out decided to pay back the money they were loaned - to allow the fat cats to resume receiving their bonuses.
1 person likes this
@Debs_place (10525)
• United States
30 Aug 09
Well my plan takes the lenders out of the picture. The interest rates are controlled by the feds and the tax deduction means that people would owe less in taxes. Plusit would even out the sales of motor vehicles over a longer period of time.
• United States
30 Aug 09
I think that cash for clunker's only helped people with money to get car's. Think about it. We all had to buy brand new $20,000 and up car's. Most people had a hard enough time finding new job's, if they didn't find one then most are losing their home's. So the $4,500 off the price of a new car isn't helping those people. It isn't helping the people that are middle class or lower it only helped those with money in their pocket's. If a person that was middle class bought a car like that and had to still pay $350 a month car payment's or more, then they lost their job, they would then be without a car. So to me it really wasn't there to help middle class or lower class people, it was for the rich.
@Debs_place (10525)
• United States
31 Aug 09
Yes, I agree. I could not afford it. If it was a tax deduction and I had a year or 2 to really serious save, then I would be able to get something and I think by then maybe the better mileage hybrids etc will be cheaper.
@Deea48 (1168)
• United States
30 Aug 09
I am like many of the responses here, in the fact I would of liked to of seen it offered in some form ,for used cars as well. Right now it was once again just a bandaid and the only long term solution I see is that yes we will have more fuel efficeint cars on our roads now. Still it only benefited the few who actually had the resources to take on car payments. With all the folks out of work or working alot less hours then they once did, there is no benefit to them. Also I think your idea is a good solid one, that would reap rewards and benifits in the years to come, not just a bandaid, like cash for clunkers. I cannot help but wonder what not, cars sales will go back to where they were before the program, Goverment spent tons of money, which means we spent tons of money, and there is no more money going into the many citizens of this countries pockets. What will turn this country around is the creating of jobs, that will create more money in the average guys pockets, that he in return will spend to get his needs met. Good topic thanks for sharing your idea, I liked it.
@Debs_place (10525)
• United States
30 Aug 09
Exactly. People who might have waited to buy a car until October rushed out and bought it in August. Those of us who could not afford the car payments in those few weeks are still using our old clunkers. This way, I can plan on buying that car and in a few months be ready knowing that a tax refund will also help infuse the economy every year instead of this one big push.