$4500 Cash for Clunkers, will not work!

scott — Wed, 01 Jul 2009 23:17:52 +0000

Yeah the problem is that the cash for clunckers bill is not worth the paper it is written on. You see people who are driving cars that will qualify for this program do not have good credit or at least the credit it takes to buy a new car now a days. Most banks now require down payments from beacons of even 760. Those with scores below 670 are not even going to qualify, even with down payment from a “Cluncker Buy out plan”. This means that very few are really affected by this. The deal is for purcahse of a new car not used. The used car buyer will only get about $1500 at best, now that may help a little, but in reality we are just feeding the helpless to the lions. By that I mean the people foolded into trading their car to get the bail out money, have good enough credit to buy and can qualify for the $4500, are more than likely driving cars that are worth more than that anyway so it will not make any difference. The people that are buying used cars and can only qualify for $1500 assitance, do not have credit for new cars and that means they are relying on secondary finanacing (which was not as affected by the credit crunch because most is “In House”) that is at wildly high rates. These rates can go as high as 22%, so when I say leading to the lions, I mean causing people that might pay $500 to fix their current car they have no payments on, to trade that in for interest rates that are out of this world. The eventual outcome from all of this will be that these “Low credit score” people will not be able to keep the car because the payment is too high, they are also the group most likely to be laid off so they will have the car repossed and ruin their credit even more. Mean while the people with good credit are not going to buy because they can afford to fix what they have and will not feel any benefit from a $4500 assistance program because their car is worth more than that. End product, the governement annouces a plan that benefits very few and causes more hardship on those that need no more, but it all looks good on paper! If the government wants to help people and the car industry, work out credit issues so people can finance cars agian with little or no money upfront. Then get consession from the auto makers to lower the price to put them within range of todays budgets. Finally, take the bail out money going to the BIG BUSINESS and spread it around the country in SMALL BUSINESS, which always seems to save the country in times of hardship.

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$4500 Cash for Clunkers, will not work!