Clunkers program could drive used car prices up

[Kevin_Kennedy]

I've already pointed out that it is people within the automobile industry that are saying the prices of used cars are going up, and basic economics tells us that this is going to happen. If you lower the supply of something then the price rises. Since there are less used cars now on the market the price of used cars is on the rise.

In other words you have repeatedly failed to show a single shred of evidence to support your claim.

Show me some evidence - or be relegated to I-hate-Obama-and-I'm gonna-whine-about-EVERYTHING status.

Just because you are apparently unable to comprehend the evidence doesn't mean it's not there.

 

[Kevin_Kennedy]

ps, if you don't want to talk about steel then don't bring it up. it's not your sides' strong subject.

I brought steel up in an attempt to point out that once an industry uses the federal government as a crutch it often becomes dependent on the government. What exactly is my side?

and I made it real clear that i'd pull out example after example of the AMERICAN steel industry being crushed under the theoretical bullshit of free market capitalistas. You call it a crutch but those workers are able to afford a standard of living ABOVE that of a ******* mexican dirt pauper or indian beggar. Did you want to tell me that you are not on the free market side of this?

They're able to afford that standard of living at the expense of other people. Yes, I support the free market.

 

[Kevin_Kennedy]

If you had an ounce of evidence to support the claim that some are being negatively impacted that would be one thing.
But you don't.
You're just complaining because you assume that some will be negatively impacted.
SHOW ME THE EVIDENCE!

I've already pointed out that it is people within the automobile industry that are saying the prices of used cars are going up, and basic economics tells us that this is going to happen. If you lower the supply of something then the price rises. Since there are less used cars now on the market the price of used cars is on the rise.

no, you posted about junkyards in OK. One interview from one guy about what he thought was going to be free junk cars doesn't even scratch the surface of how many are out benefitting from CFC right now.



"basic economics tells us blah blah blah" dude.. the pompous "i've read some econ theories" silliness doesn't impress me here any more than it did when Greenspan was groveling AFTER the fact.

The Chairman of the central economic planner cannot possibly be for a free market, as a centrally planned economy is the opposite of the free market.

 

[Care4all]

No, the government has created an artificial demand for new cars by paying extra to those who trade in their old cars to be destroyed. Perfectly good cars in many cases. This creates a shortage in used cars thus driving their prices up.

so, none of the clunker people buying new, were the people that WOULD HAVE BEEN buying used cars?

I think demand for used cars would go down a little, since an estimated few hundred thousand people out of the 750k, made the clunker trade and bought new who may have bought a used car otherwise....

it'll all work out kevin....the projected used car shortage isn't taking all facts in to consideration imo...

That's exactly what many of them are. They now have extra incentive to buy a new car, whether they can afford it or not. That's not really a good thing, however. We don't want more people to go into debt if they can't afford it, and just because you can get a loan for a new car doesn't mean you can afford it.

There are still people who can't afford a new car, regardless of Cash for Clunkers. But while the demand may have gone down overall, the prices continue to rise because there is still a significant demand and the supply is getting lower. Also, as I've pointed out, this imbalance is going to outlive the Cash for Clunkers program.

kevin, we can't hold peoples hands....if they actually qualify under these tight credit conditions, then they have to decide for themselves if they feel comfortable taking a new loan out.

i had heard that near 70% of all cars ever made in the usa, are still on the road running....750k of them trashed probably won't make a dent in that....

some of these people buying new and trading their clunkers, can no longer be counted in the projected demand for used cars kevin...this can't be ignored.

plus, outside of the engine block being destroyed, the clunkers can be salvaged for their parts...which should flood the used car market, reducing the price of used car parts and eventually the used car....

or, if prices for used cars really do go up, the person trading in their old used car for a newer used car will sell their own used car for more, while paying more for the newer used car... IT WILL WASH kevin

worth questioning, but when figured through...this is much to do about nothing....honestly!

care

 

[Shogun]

I don't have the numbers. Should we simply not post on the subject, however? Simply praise this wonderful government program and move on? Or is it legitimate to point out that while some are seeing a benefit from this program, that there are others who are negatively impacted by this program?

"Between a good and a bad economist this constitutes the whole difference--the one takes account of the visible effect; the other takes account both of the effects which are seen and also of those which it is necessary to foresee." - Frédéric Bastiat

so.. you dont have anything concrete about this yeti of an issue you are nitpicking, eh? Again, petty. You can post whatever you want.. but, don't be shocked when your pettiness gets called what it is. I know it might rock your ******* world but MAYBE, just MAYBE CFC is working out better for MORE american's than your hands off approach of "well, capitalism has it's ups and downs so lets jest ride this one to hell and hope it gets better someday" crap. I realie that you resent the government when you are not up at bat. boo ******* hoo. When you have numbers that reflect the negative like I have the numbers that reflect the positive let me know.


ps, after your steel industry gaffe I'm not sure i'd rely on silly ******* quotes as if name dropping some theorist (opinion) means something to everyone.

This program is helping some people, but it's at the expense of other people. In a free market approach only those who have made unwise decisions get hurt.

I didn't make a steel industry gaffe. I made a comparison between a steel industry completely dependent on government protection, and the automobile industry that I see as going down the same road. Maybe Bastiat's quote doesn't mean anything to you, but it's a very prescient observation nonetheless.

yes, and I retorted with the domestic steel industry being shafted by capitalistas who'd rather rationalize foreign goods than a local standard of living. Again, I'll dual you on this issue.

In a capitalist system there is ALWAYS a loser. there is ALWAYS someone who doesn't beneift as much as the next guy. What the hell is the problem? That there is a loser or that this is a program coming out of a democrat gov? Your concern, and rationalization thereof, is just stupid as hell.

 

[nodoginnafight]

In a capitalist system there is ALWAYS a loser. there is ALWAYS someone who doesn't beneift as much as the next guy. What the hell is the problem? That there is a loser or that this is a program coming out of a democrat gov? Your concern, and rationalization thereof, is just stupid as hell.

game ..... set ..... match

 

[Kevin_Kennedy]

so, none of the clunker people buying new, were the people that WOULD HAVE BEEN buying used cars?

I think demand for used cars would go down a little, since an estimated few hundred thousand people out of the 750k, made the clunker trade and bought new who may have bought a used car otherwise....

it'll all work out kevin....the projected used car shortage isn't taking all facts in to consideration imo...

That's exactly what many of them are. They now have extra incentive to buy a new car, whether they can afford it or not. That's not really a good thing, however. We don't want more people to go into debt if they can't afford it, and just because you can get a loan for a new car doesn't mean you can afford it.

There are still people who can't afford a new car, regardless of Cash for Clunkers. But while the demand may have gone down overall, the prices continue to rise because there is still a significant demand and the supply is getting lower. Also, as I've pointed out, this imbalance is going to outlive the Cash for Clunkers program.

kevin, we can't hold peoples hands....if they actually qualify under these tight credit conditions, then they have to decide for themselves if they feel comfortable taking a new loan out.

i had heard that near 70% of all cars ever made in the usa, are still on the road running....750k of them trashed probably won't make a dent in that....

some of these people buying new and trading their clunkers, can no longer be counted in the projected demand for used cars kevin...this can't be ignored.

plus, outside of the engine block being destroyed, the clunkers can be salvaged for their parts...which should flood the used car market, reducing the price of used car parts and eventually the used car....

or, if prices for used cars really do go up, the person trading in their old used car for a newer used car will sell their own used car for more, while paying more for the newer used car... IT WILL WASH kevin

worth questioning, but when figured through...this is much to do about nothing....honestly!

care

No, we can't hold peoples hands and they do need to make their own decisions. However, if we subvert market forces and incentivize these people to take risks then aren't we doing the same thing we did to cause this recession in the first place?

Yes, trashing a huge number of perfectly good used cars will cause a shortage and raise prices.

I'm not ignoring it. However, many of them would otherwise get a used car because they really can't afford a new car in the first place.

Reducing the price of some used car parts. The ones that can't be salvaged are going to skyrocket in price, and no used cars will not go down in price.

What about first time car buyers and those who don't have a car to trade in? They're going to suffer through the higher price of used cars. It will not wash. The imbalance is unlikely to be made up in getting a higher price for their trade in.

 

[Shogun]

I brought steel up in an attempt to point out that once an industry uses the federal government as a crutch it often becomes dependent on the government. What exactly is my side?

and I made it real clear that i'd pull out example after example of the AMERICAN steel industry being crushed under the theoretical bullshit of free market capitalistas. You call it a crutch but those workers are able to afford a standard of living ABOVE that of a ******* mexican dirt pauper or indian beggar. Did you want to tell me that you are not on the free market side of this?

They're able to afford that standard of living at the expense of other people. Yes, I support the free market.

when those other people are ******* mexicans who will work for clean water and a few pesos, sorry, you'll have to ******* forgive me for rooting for the home team despite bullshit econ theories.

 

[Kevin_Kennedy]

so.. you dont have anything concrete about this yeti of an issue you are nitpicking, eh? Again, petty. You can post whatever you want.. but, don't be shocked when your pettiness gets called what it is. I know it might rock your ******* world but MAYBE, just MAYBE CFC is working out better for MORE american's than your hands off approach of "well, capitalism has it's ups and downs so lets jest ride this one to hell and hope it gets better someday" crap. I realie that you resent the government when you are not up at bat. boo ******* hoo. When you have numbers that reflect the negative like I have the numbers that reflect the positive let me know.


ps, after your steel industry gaffe I'm not sure i'd rely on silly ******* quotes as if name dropping some theorist (opinion) means something to everyone.

This program is helping some people, but it's at the expense of other people. In a free market approach only those who have made unwise decisions get hurt.

I didn't make a steel industry gaffe. I made a comparison between a steel industry completely dependent on government protection, and the automobile industry that I see as going down the same road. Maybe Bastiat's quote doesn't mean anything to you, but it's a very prescient observation nonetheless.

yes, and I retorted with the domestic steel industry being shafted by capitalistas who'd rather rationalize foreign goods than a local standard of living. Again, I'll dual you on this issue.

In a capitalist system there is ALWAYS a loser. there is ALWAYS someone who doesn't beneift as much as the next guy. What the hell is the problem? That there is a loser or that this is a program coming out of a democrat gov? Your concern, and rationalization thereof, is just stupid as hell.

In a free market there are losers based on their own bad decisions. When the government intervenes they create an imbalance and cause undue pain to those who have done nothing wrong. In this case, the American auto-industry has made terrible business decisions, and now the poorest in our society are paying higher prices for used cars so the government can prop up this auto-industry.

 

[Kevin_Kennedy]

and I made it real clear that i'd pull out example after example of the AMERICAN steel industry being crushed under the theoretical bullshit of free market capitalistas. You call it a crutch but those workers are able to afford a standard of living ABOVE that of a ******* mexican dirt pauper or indian beggar. Did you want to tell me that you are not on the free market side of this?

They're able to afford that standard of living at the expense of other people. Yes, I support the free market.

when those other people are ******* mexicans who will work for clean water and a few pesos, sorry, you'll have to ******* forgive me for rooting for the home team despite bullshit econ theories.

Well you'll have to forgive me for not supporting those who take away from society rather than contributing to it.

 

[Shogun]

They're able to afford that standard of living at the expense of other people. Yes, I support the free market.

when those other people are ******* mexicans who will work for clean water and a few pesos, sorry, you'll have to ******* forgive me for rooting for the home team despite bullshit econ theories.

Well you'll have to forgive me for not supporting those who take away from society rather than contributing to it.

yea dude! because a ******* mexican paper really does contribute to the AMERICAN culture outside of dropping our wages to compete with those who sill work from clean water and a ******* daily taco.

SURE!

 

[Shogun]

This program is helping some people, but it's at the expense of other people. In a free market approach only those who have made unwise decisions get hurt.

I didn't make a steel industry gaffe. I made a comparison between a steel industry completely dependent on government protection, and the automobile industry that I see as going down the same road. Maybe Bastiat's quote doesn't mean anything to you, but it's a very prescient observation nonetheless.

yes, and I retorted with the domestic steel industry being shafted by capitalistas who'd rather rationalize foreign goods than a local standard of living. Again, I'll dual you on this issue.

In a capitalist system there is ALWAYS a loser. there is ALWAYS someone who doesn't beneift as much as the next guy. What the hell is the problem? That there is a loser or that this is a program coming out of a democrat gov? Your concern, and rationalization thereof, is just stupid as hell.

In a free market there are losers based on their own bad decisions. When the government intervenes they create an imbalance and cause undue pain to those who have done nothing wrong. In this case, the American auto-industry has made terrible business decisions, and now the poorest in our society are paying higher prices for used cars so the government can prop up this auto-industry.

No, there are losers REGARDLESS. Tell me how 10 construction contracters who bid on the same ******* job ALL just make poor choices. ITS THE NATURE OF CONTRACT BIDDING THAT ONE WILL WIN WHILE ALL ELSE LOSES. Give me a ******* break. And, until you cite numbers that support your chicken little rant you dont get to use phrases like "and now the poorest in our society are paying higher prices for used cars so the government can prop up this auto-industry". If 5 people don't buy a goddamn used car when 5 thousand benefit from CFC then your entire premise is a giant bowl of thriple stacked fail. But, you don't have relative numbers, do you.

 

[Kevin_Kennedy]

when those other people are ******* mexicans who will work for clean water and a few pesos, sorry, you'll have to ******* forgive me for rooting for the home team despite bullshit econ theories.

Well you'll have to forgive me for not supporting those who take away from society rather than contributing to it.

yea dude! because a ******* mexican paper really does contribute to the AMERICAN culture outside of dropping our wages to compete with those who sill work from clean water and a ******* daily taco.

SURE!

Not having to pay higher prices for steel means the American consumer has more money to spend elsewhere.

 

[Kevin_Kennedy]

yes, and I retorted with the domestic steel industry being shafted by capitalistas who'd rather rationalize foreign goods than a local standard of living. Again, I'll dual you on this issue.

In a capitalist system there is ALWAYS a loser. there is ALWAYS someone who doesn't beneift as much as the next guy. What the hell is the problem? That there is a loser or that this is a program coming out of a democrat gov? Your concern, and rationalization thereof, is just stupid as hell.

In a free market there are losers based on their own bad decisions. When the government intervenes they create an imbalance and cause undue pain to those who have done nothing wrong. In this case, the American auto-industry has made terrible business decisions, and now the poorest in our society are paying higher prices for used cars so the government can prop up this auto-industry.

No, there are losers REGARDLESS. Tell me how 10 construction contracters who bid on the same ******* job ALL just make poor choices. ITS THE NATURE OF CONTRACT BIDDING THAT ONE WILL WIN WHILE ALL ELSE LOSES. Give me a ******* break. And, until you cite numbers that support your chicken little rant you dont get to use phrases like "and now the poorest in our society are paying higher prices for used cars so the government can prop up this auto-industry". If 5 people don't buy a goddamn used car when 5 thousand benefit from CFC then your entire premise is a giant bowl of thriple stacked fail. But, you don't have relative numbers, do you.

So you think there are only five people in America right now considering buying a used car? Get serious.

As to your construction situation, the one who is able to do the job for the least amount of money is the winner. The rest lost because they weren't able to offer the same service for a lower price. Or maybe the winner is a little more expensive but does a much better job. The losers lose because they can't compete.

 

[veritas]

So what good are we doing for the environment if the clunker is NOT taken off the road but is simply being driven by someone else?

* It takes enormous amounts of electricity to refine aluminum from its ore. That's why most aluminum plants are built in areas with cheaper electricity, such as the Pacific Northwest.
* Recycling aluminum requires only a tenth as much electricity as making the same aluminum from bauxite ore.
* Discarding an aluminum can wastes as much energy as if you filled the can half full of gasoline and poured it on the ground.
* It takes barely as much energy as there is in a tablespoon of gasoline to recycle that can.

But cars aren't cans. As expressed before, the value of a car goes far beyond its raw material assets. Are there going to be enough clunkers to impact the steel market? Will there be a notable quantity of steel now available due to the crushed clunkers? I think not. How much energy is it going to take for the crushing and then the redistribution of the paltry amount of steel and maybe some catalytic converters thrown in to make a dent? It won't. You can't trade in the rusted out Firebird that has become a planter in the back forty. You have to have had insurance for a year prior in order to get your clunker money. So in most all cases these cars are utile. Somebody could use them. How much more energy is being saved by crushing, transporting, resmelting, etc, VS a couple mpgs lost? Not much......probably not any.

Why couldn't the clunkers be treated as any other trade in would be? Offered to be resold if they are sound and have some useful life left? Offered for charity? Used to help people?

 

[Care4all]

That's exactly what many of them are. They now have extra incentive to buy a new car, whether they can afford it or not. That's not really a good thing, however. We don't want more people to go into debt if they can't afford it, and just because you can get a loan for a new car doesn't mean you can afford it.

There are still people who can't afford a new car, regardless of Cash for Clunkers. But while the demand may have gone down overall, the prices continue to rise because there is still a significant demand and the supply is getting lower. Also, as I've pointed out, this imbalance is going to outlive the Cash for Clunkers program.

kevin, we can't hold peoples hands....if they actually qualify under these tight credit conditions, then they have to decide for themselves if they feel comfortable taking a new loan out.

i had heard that near 70% of all cars ever made in the usa, are still on the road running....750k of them trashed probably won't make a dent in that....

some of these people buying new and trading their clunkers, can no longer be counted in the projected demand for used cars kevin...this can't be ignored.

plus, outside of the engine block being destroyed, the clunkers can be salvaged for their parts...which should flood the used car market, reducing the price of used car parts and eventually the used car....

or, if prices for used cars really do go up, the person trading in their old used car for a newer used car will sell their own used car for more, while paying more for the newer used car... IT WILL WASH kevin

worth questioning, but when figured through...this is much to do about nothing....honestly!

care

No, we can't hold peoples hands and they do need to make their own decisions. However, if we subvert market forces and incentivize these people to take risks then aren't we doing the same thing we did to cause this recession in the first place?

Yes, trashing a huge number of perfectly good used cars will cause a shortage and raise prices.

I'm not ignoring it. However, many of them would otherwise get a used car because they really can't afford a new car in the first place.

Reducing the price of some used car parts. The ones that can't be salvaged are going to skyrocket in price, and no used cars will not go down in price.

What about first time car buyers and those who don't have a car to trade in? They're going to suffer through the higher price of used cars. It will not wash. The imbalance is unlikely to be made up in getting a higher price for their trade in.

they probably were never going to buy one of these gas guzzlers as a first used car in the first place kev...these type of gas guzzler used cars are the LEAST desirable....

i still think it is not anything of great concern...

if the dealers ran a promo, giving 3500 to 4500 for your trade, (but were not trashing the trade for the gvt), this promotiom would have been JUST as successful for them....

that would have been just a promotion dealers decided to run to increase their business...it still would have inflated the normal rate of sales for new cars...would that still be considered artificially inflated or just part of the business's marketing strategy???

 

[BasicGreatGuy]

In my opinion, the federal government has no business subsidizing the purchase of automobiles.

 

[Kevin_Kennedy]

kevin, we can't hold peoples hands....if they actually qualify under these tight credit conditions, then they have to decide for themselves if they feel comfortable taking a new loan out.

i had heard that near 70% of all cars ever made in the usa, are still on the road running....750k of them trashed probably won't make a dent in that....

some of these people buying new and trading their clunkers, can no longer be counted in the projected demand for used cars kevin...this can't be ignored.

plus, outside of the engine block being destroyed, the clunkers can be salvaged for their parts...which should flood the used car market, reducing the price of used car parts and eventually the used car....

or, if prices for used cars really do go up, the person trading in their old used car for a newer used car will sell their own used car for more, while paying more for the newer used car... IT WILL WASH kevin

worth questioning, but when figured through...this is much to do about nothing....honestly!

care

No, we can't hold peoples hands and they do need to make their own decisions. However, if we subvert market forces and incentivize these people to take risks then aren't we doing the same thing we did to cause this recession in the first place?

Yes, trashing a huge number of perfectly good used cars will cause a shortage and raise prices.

I'm not ignoring it. However, many of them would otherwise get a used car because they really can't afford a new car in the first place.

Reducing the price of some used car parts. The ones that can't be salvaged are going to skyrocket in price, and no used cars will not go down in price.

What about first time car buyers and those who don't have a car to trade in? They're going to suffer through the higher price of used cars. It will not wash. The imbalance is unlikely to be made up in getting a higher price for their trade in.

they probably were never going to buy one of these gas guzzlers as a first used car in the first place kev...these type of gas guzzler used cars are the LEAST desirable....

i still think it is not anything of great concern...

if the dealers ran a promo, giving 3500 to 4500 for your trade, (but were not trashing the trade for the gvt), this promotiom would have been JUST as successful for them....

that would have been just a promotion dealers decided to run to increase their business...it still would have inflated the normal rate of sales for new cars...would that still be considered artificially inflated or just part of the business's marketing strategy???

The difference between your scenario and what's reality is that in your scenario these companies do this by private initiative because they feel they can afford to take the risk. It would be a temporary program and not subsidized by the American taxpayer. If the companies were able to offer this on their own then I'd have no problem with it because it would mean they're healthy and willing to take a risk. However, because it's the government doing it we know that this industry is not healthy and that it's actually a drain on society rather than productive for society.

 

[Care4all]

If they were in healthy shape and sales were steady, this kind of promotion would not be needed.

However, they are not as you call "healthy", and major risks needed to be taken to pull them out of their rut....nothing ventured, nothing gained.

Selling 200,000 cars at normal mark up...making $5000 in profit each verses selling 750,000 cars at $2500 profit each still brings the company more profit during the same period, than not running the promotion.

This is a business strategy that I have used before in the private sector and is not some government strategy that they created out of the blue?

Ideally, it would have been nice if these car companies did a colossal sale like this on their own....it would probably not have had the same impact as this coordinated event among all Brand car Dealership.

you know, I think that i keep seeing the US gvt owning 70% of some of the American car manufacturers in the background of this entire scenario and this is why I accept it...I do understand where you are coming from...but I am at the stage where the dirty deed was done already (the gvt bailed the auto industry out and we basically own a majority) and I want my money back! This promotion set us on the road to getting us some of our money back...

care

 

[Kevin_Kennedy]

If they were in healthy shape and sales were steady, this kind of promotion would not be needed.

However, they are not as you call "healthy", and major risks needed to be taken to pull them out of their rut....nothing ventured, nothing gained.

Selling 200,000 cars at normal mark up...making $5000 in profit each verses selling 750,000 cars at $2500 profit each still brings the company more profit during the same period, than not running the promotion.

This is a business strategy that I have used before in the private sector and is not some government strategy that they created out of the blue?

Ideally, it would have been nice if these car companies did a colossal sale like this on their own....it would probably not have had the same impact as this coordinated event among all Brand car Dealership.

you know, I think that i keep seeing the US gvt owning 70% of some of the American car dealerships in the background of this entire scenario and this is why I accept it...I do understand where you are coming from...but I am at the stage where the dirty deed was done already (the gvt bailed the auto industry out and we basically own a majority) and I want my money back! This promotion set us on the road to getting us some of our money back...

care

You're not going to see any money back from the automobile industry at all. If anybody sees any profit out of them it will be the government, who will then proceed to waste that money again.

Just because the government has already involved itself in the auto industry doesn't mean you want more government involvement. The sooner we realize we've made a mistake the sooner we make the turnaround.