Obama’s “Cash For Clunkers” Program Gives Incentive to New Car Buyers

Jul 13th, 2009 @ 3:57 PM by Alden Smith

Last Thursday, Congress approved the new Cash for Clunkers program.  The program is designed to provide motorists with a $3,500-$4,500 incentive if they agree to trade in their older vehicles for one that is more fuel-efficient.  The Obama administration feels that this program will be a stimulus for car dealerships; it also provides the nation with vehicles that are more fuel efficient.  In states that rely heavily on the auto industry for jobs, such as Michigan, this can be seen as a good thing.

But what if the car being traded in his worth more than $3,500?  Many vehicles on the road today are worth that and more.  Another condition of the program is that all cars that are traded in must be crushed and taken off the road.  This makes little sense, when you consider the many people that need to find transportation that will get them back and forth to a job, if they have the good fortune to find one.

In an article at Reuters.com, Business Insider’s Jay Yarrow comments that people that are driving around in a car today that is valued at $4,500 are unlikely to be able to afford payments on a new car.  We are in the middle of a deep recession, with a 9.5% unemployment rate.  People are still losing jobs, and many companies have deep concerns about their future.

This program is intended to run from July 1 to November 1, 2009.  Many car dealers are concerned about the fine print of the program, which they have not seen yet.  Although many car dealers are excited about the program, many are also concerned that the money allocated to the program, which is just $1 billion, will not effectively sustain the program.  Although dealers are eager to sell, many are hesitant to do so, because they are unsure of receiving their money, according to the Miami Herald.

On the surface, the program appears to be a good incentive for people wanting a new vehicle, and it is reassuring to car dealers that there is a program in place that may get cars rolling off their lots once more.  Whether the Cash for Clunkers program proves to be effective can only be determined by time.

6 Responses to “Obama’s “Cash For Clunkers” Program Gives Incentive to New Car Buyers”

1. gdudak says:

   July 16, 2009 at 3:56 pm

   It’s a good idea in theory.
2. Garth says:

   July 16, 2009 at 3:59 pm

   I agree, this is definitely something I need to look into.
3. Brunilda says:

   August 1, 2009 at 11:14 am

   I think is a great idea,i really need a new car, thanks mister president president OBAMA
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