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The following is a partial excerpt from Hemmings Muscle Machines, December 2009, “Collectible Clunkers, Redefining Junk”
“One man’s junk is another man’s treasure, and the Cash for Clunkers initiative-so successful that it had to be stopped early (twice!)- has proven that in spades.
Some of the 700,000 cars given up were machines with, at the very least, collector value-whether in pieces or as a whole. A total of 1,611 Mustangs were turned in – all post ’84 models. One of those Mustangs was an ’08!
More than 3,000 Thunderbirds had their wings clipped, including an ’05 two seater: we shudder to think how many were Turbo Coupes and Super Coupes. And, 107 Ford Taurus SHOs are no longer with us.
As for the General… brace yourself: 131 Corvettes from ’84 to ’95, including 34 convertibles, have met their fate. Also, more than 1,000 Camaros from ’84 to 2000 are no longer with us. Elsewhere in the GM lineup, there was a Buick GNX, a 20th anniversary Trans Am, and 61 Fieros (including the rare and desirable ’88 models) sent to the scrapper.
Our hope is that these were all sub-parts car material, with dented panels and mice chewing on the wiring. Even then, many of these machines deserved better.”
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Unfortunately that is the chance you take when there is a program like this. If the program didn’t happen there would be a couple less car companies in business I believe.
If you traded in a clunker worth $3500, you get $4500 off for an apparent “savings” of $1000. However, you 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 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, that was costing you less to run than the payments that you will now be making.
But wait, it gets even better: you also got a Democratic Deal from the dealer.
For example, every dealer here in L.A. was selling the Ford Focus with all the goodies including A/C, auto transmission, power windows, etc for $12,500 the month before the “cash for clunkers” program started. 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).
So, lets do the final tally here
You traded in a car worth: $3500
You got a discount of: $4500
Net so far +$1000But, you have to pay: $1350 in taxes on the $4500
Net so far: -$350And you paid: $3000 more than the car was selling for the month before
Net -$3350We could also add in the additional taxes (sales tax, state tax, etc.) on the extra $3000 that you paid for the car, along with the 5 years of interest on the car loan, but, lets just stop here.
So, who actually made out on the deal? The Feds 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. The manufacturers got to dump lots of cars they could not give away the month before. And, the poor stupid consumer got saddled with even more debt that they cannot afford. Now there will be defaults on these “Obama Good Deal Cars” like there were on the forced Obama Home Loans when he was a Chicago “Community Organizer” that gave loans to people who could not even qualify for a Sears Credit Card…
Obama and his band of merry men convinced Joe consumer that he was getting $4500 in “free” money from the “government” when in fact Joe was giving away his $3500 car and paying an additional $3350 for the privilege. Oh my America, what did you do???
This is THE END of another sad tale of how Obama and his cronies are fooling the gullible people of America.
ddhemi wrote:
Quote:If you traded in a clunker worth $3500, you get $4500 off for an apparent “savings” of $1000. However, you 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 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, that was costing you less to run than the payments that you will now be making.
But wait, it gets even better: you also got a Democratic Deal from the dealer.
For example, every dealer here in L.A. was selling the Ford Focus with all the goodies including A/C, auto transmission, power windows, etc for $12,500 the month before the “cash for clunkers” program started. 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).
So, lets do the final tally here
You traded in a car worth: $3500
You got a discount of: $4500
Net so far +$1000But, you have to pay: $1350 in taxes on the $4500
Net so far: -$350And you paid: $3000 more than the car was selling for the month before
Net -$3350We could also add in the additional taxes (sales tax, state tax, etc.) on the extra $3000 that you paid for the car, along with the 5 years of interest on the car loan, but, lets just stop here.
So, who actually made out on the deal? The Feds 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. The manufacturers got to dump lots of cars they could not give away the month before. And, the poor stupid consumer got saddled with even more debt that they cannot afford. Now there will be defaults on these “Obama Good Deal Cars” like there were on the forced Obama Home Loans when he was a Chicago “Community Organizer” that gave loans to people who could not even qualify for a Sears Credit Card…
Obama and his band of merry men convinced Joe consumer that he was getting $4500 in “free” money from the “government” when in fact Joe was giving away his $3500 car and paying an additional $3350 for the privilege. Oh my America, what did you do???
This is THE END of another sad tale of how Obama and his cronies are fooling the gullible people of America.
Well put, sir.
http://www.snopes.com/politics/taxes/clunkers.asp
only a couple states are taxing the rebate; the federal gov is not taxing it.
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