Two weeks ago today, I was at work, as I am now, with my last car. On the way home, it died. I later found that it was the head gasket we had just had repaired three months ago. We hadn't even finished paying on the prior repair. That is what you call a lemon: a car that, no matter how much you put into it, keeps costing you more than it's worth.
This past Monday, a new economic and environmental stimulus package took effect, called "Cash for Clunkers", and it's been getting a lot of attention lately. Because of the death of my car, we took my wife's car in. We didn't know about the program, but when we heard we could get $3500 or $4500 off a brand-new car, it sounded like a good idea. A "Clunker", according to the rules and regulations of this program, is a car made in 1984 or more recently and gets less than 18 miles per gallon. Jen's car qualifies; it gets close to 15 miles to the gallon. Or at least we thought it qualified.
Appropriately named "Chuggy" (by me, no less), aside from getting below-average gas mileage, the spedometer did not work (as soon as you started it, it would climb to, and then past its maximum level), there was no panel on the driver's door (to let yourself out, you had to grab the linkage inside the door and pull), the front windows did not go down, the roof was just a sheet that hung down and could not be tacked up, the doors could not be locked, the A/C didn't work due to a missing belt, the car had to be warmed up for at least 5 minutes in the cold, the shifter knob for the transmission kept falling off (we had to put a bag over it to at least catch it), while the gas tank had a cap, there was no cover, the car was white, rust, and steel colored, the bumpers were barely hanging on. Oh, and it didn't like going over 45-50 miles per hour. (For all that, though, it was a very reliable car. Neither of the cars I've had since she's had it have lasted as long.)
But, according to the federal government, Chuggy isn't a clunker. Being a "Clunker", by their definition, isn't actually about fuel economy. The reason Chuggy isn't a clunker is because when it was "brand new", it got more than 18 miles to the gallon (probably about 20-22). 1990 Oldsmobile Cutlass Calais, V6, automatic. In fact, most standard passenger cars manufactured since 1984 got better than 18 miles to the gallon when they rolled off the lot. So what is a "clunker"? It's mainly big trucks and sports cars, cars actually designed to get low mileage in favor of performance, whether it's workload or racing. Before the Bush Administration, bad fuel economy did not a bad car make, if it made up for it in other ways. Now fuel economy is first and foremost.
Lastly, you don't get any cash. What you get is a voucher for $3500 or $4500 towards the purchase of a new vehicle, and this is all handled with the dealer. It acts as your down payment, if you haven't got one, which is great for working-class folks who have bills to pay and can't save, but can afford a monthly payment. I'm sure we all know folks like that. ;-) (You read the blog of one...)
So here's how it works. If you want to trade your car in under this program, you need to find out what the EPA (Environmental Protection Agency) rated the fuel economy of your car's make, model, and trim when it was brand new. Aftermarket modifications and wear and tear do not count whatsoever. Find this out, because the dealer will find out, and if it's 19 or higher, your car will not qualify, regardless of what it gets now. If your car or truck does qualify, $3500 is taken off the total cost of the car if the new car gets 5-9 miles more per gallon than the car you're trading in. An additional $1000, for a total of $4500, is taken off if the new car gets 10 miles more per gallon than the trade-in. Futhermore, the trade-in must be in the name of the person buying the new car, and it must have been in that person's name for a full year or longer.
We did not qualify, but we were still able to trade Chuggy in for a fraction of what we would have got under the program. Our payments went up a bit and we got a lesser car, but there are things about it I like more, too. (On top of that it gets a little better gas mileage!)
"Cash for Clunkers" started this past Monday. I wondered why Nissan made us sign everything for the 27th on the 24th. I guess that's why. $100 million has already been paid out to car dealerships around the country for Clunker trade-ins alone, and the goverment appropriated $1 billion. So the fund has $900 million left; at this rate, that's another 9 weeks. Maybe less, as word of the program gets out. And Congress is reportedly seeking another $2 billion for the program.
//Update: 3 August 2009: They got it - so there is now roughly $2.5 billion, I'm guessing, available for this program.
This may be what it takes to get the economy working again. Stimulus checks are not the answer, because people either save them, or use them to pay for goods and services that are not financially threatened. Like the light bill - the power company is not going anywhere. So stimulating them is a waste of money. People may buy booze with it, or drugs - or, to be fair, food. Food manufacturers aren't hurting either; neither is the spirits industry. And I shouldn't need to explain why the drug trade doesn't need money. The auto industry however, does need stimulus. And the banks who underwrite their loans. They need help as well. People need to buy expensive things they need because they need them, and they need to buy them from large companies to keep these businesses doing business, and paying their employees, keeping their families fed, their kids off the streets, not committing crimes with their friends. I know all that's a stretch, but that's how a capitalist system works. The only problem is that due to the problems the Republicans left us, people don't have the confidence to make these big purchases, because they'll be worse off if they lose their jobs. The Republicans (and the rich) say "Buy, buy, buy, the more you buy, the more industry will make, fewer people will be laid off, your job will be more secure" and the working class wants assurances. Well, sometimes life doesn't come with guarantees, and you just have to make the most out of what you got. We can make this work.