I did some research on the internet and put together a list of pros and cons regarding the “Cash For Clunkers” program. I made a list for the individual who is considering buying a car through the program, and also a list for the “Collective Soul”, for us to consider the overall impact on the universe, as described in this article.
So far the Pros and Cons add up to this: Singles: 4-Pro, 6-Con. Collective Soul: 6-Pro, 12-Con.
INDIVIDUAL:
advantage
1. $4,500 + other incentives, you may be able to save a lot of money on the purchase of a new car, if you look for more incentives than the $4,500.
2. Less gasoline. You could save a lot of money at the pump.
3. Reduce repair costs.
4. Environment: Your driving will cause less pollution.
cons
1. Insurance: It usually costs more to insure a new car.
2. New debt: Is it wise to take on more debt in your financial situation?
3. Wasted Parts – Your old car will be destroyed. Whether or not some of the parts will be recycled is questionable.
4. Added value to your old clunker. The used car market may heat up due to decreased supply. Your used car may be worth more than the coupon after this Cash for Clunkers program leak.
5. More gasoline. You may be inclined to drive more knowing your car gets better gas mileage.
6. Comfort zone. You KNOW your old car. And he knows what repairs you have done to it and what is likely to go wrong.
FOR THE COLLECTIVE SOUL:
advantage
1. Increase sales at car dealerships.
2. Increased sales of new cars to consumers who might not otherwise buy right now. For high- and middle-income people with good enough credit to get a car loan, it gives them a down payment.
3. Older vehicles are often less fuel efficient than their modern counterparts, so taking them off the road and replacing them with newer cars would likely lower the oil consumption of individual owners and the nation.
4. Old vehicles typically don’t run as clean as new vehicles, so removing and replacing them on our roads would likely reduce vehicle exhaust emissions, lessening the impact on the environment.
5. Older vehicles were not held to the same crash and safety standards as newer cars and tend to be less safe in an accident. Replacing them with newer vehicles could lead to fewer car accident injuries and deaths.
6. Automakers are struggling right now, especially domestic automakers. Providing a financial incentive to buy new cars would likely lead to an increase in car sales, generating revenue for automakers and helping them weather the economic downturn, while stimulating the economy at the same time.
cons
1. Artificial and unsustainable boom in car sales.
2. Crushing those vintage cars makes those parts and vehicles harder to come by and therefore more expensive.
3. Many companies make parts and upgrades for older vehicles. A reduced supply of older vehicles would negatively affect your sales.
4. The automotive restoration and customization industry relies on vintage cars as the basis for its products. A reduced supply of older vehicles would negatively affect your sales.
5. For low-income people, it makes it more difficult to find and keep an old vehicle.
6. Convince low-income people, those who drive clunkers, to go out and finance a new car when we are still in the midst of the consequences of easy credit in the housing market.
7. Deliver vehicle donations to charities. Some charities that rely on vehicle donations for funding say they are receiving fewer cars and trucks, because donors change their minds and decide to switch vehicles into the Cash for Clunkers program.
8. Some older vehicles actually get better gas mileage than some newer ones. Replacing them would negate any benefit to the environment or America’s oil consumption problem.
9. Encouraging consumers to scrap running vehicles could shorten the life of cars and encourage the production of new cars, which would have a greater adverse effect on the environment than keeping the old car.
10. This proposal would not necessarily benefit automakers that are financially worse off, as there is no guarantee that consumers will use their incentive to buy a vehicle from one of those manufacturers and not from another company.
11. The program is not restricted to AMERICANS, and is not restricted to vehicles made in AMERICANS, but comes from AMERICAN taxpayer money.
12. It costs more than $4,500 per exchange. It costs approximately $6,000 per vehicle, taking into account the cost of additional government staff, office space rental, equipment, employees, web development, form printing, etc.
http://en.wikipedia.org/wiki/Car_Alowance_Rebate_System
