Friday, July 31, 2009

I've been wondering about something. What's to prevent a dealership from increasing the price of their fuel efficient K4K cars by $3500-$4500 so that they walk away at the end of the day with the customer still paying the average or higher price for the vehicle. So they make not only between $3500 and $4500 extra on the vehicle BUT that same rebate from the government?

Also, say I walk into a dealership with a 24 year old vehicle that has bad fuel mileage and the damn thing is only worth $1,000. But...the government is allowing a credit of $3500 for my old high mileage inefficient vehicle? So the dealership is going to get $3500 for a $1,000 vehicle, they make $2500 off the government with my tax dollars. Add that $2500 to the $3500 increase in price the customer just paid, when the dealership jacked up the price. They just made $6,000 on one car. Not bad eh?

A possible increase to three billion dollars for this program, that's JUST for the rebates. What about the cost to administer this program? Divide say $4500 into $3 billion, that's approximately 666,000 clunkers. Who is going to scrap these? According to the government, it will be done by government approved facilities. Who owns the facilities? Are there ties to government officials? These cars may be sold by the scrap yard for parts (except engine and drive train) prior to shredding. The cars may not be resold in the US or anywhere else.

Yeah ok.

Also, the CARS act specifically states that this does not apply just to new American cars, which means that many individuals might want up purchasing foreign cars. The dealership gets the rebate $$ from the government and is able to replace its sold foreign made car with another foreign made car. That doesn't do jack for American vehicle manufacturers does it?

If you ask me, we could have done something better with $3 billion of our tax dollars. Ya think?

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