An unexpected car tax

[mardi gras skin]

But your registration fees are actually taxes, they are providing money to the government. "Unintended consequences" is a much better title for the thread, but not as incendiary, so it was not used.

Joe, you are the one poster I wish posted more often.

Yes, you're correct that it is not a tax. I was trying to say that the government did something that took money out of my pocket. It might be more accurate to say that they did something to take money out of my pocket and put it into another person's pocket. Redistribution of wealth. Does that work?

[mardi gras skin]

To my eye, most were in the range of $0-$1500 value at best.

I could be wrong. But when you take a ton of the $2000 car buyers off the market, those people still need a car. That jacks up the price of low in cars and all the more expensive cars compensate. If a car that went for $2000 last year is going for $3000 this year because demand outstrips inventory, the $3000 cars move up in value to $4000. That has to affect used car prices.

[daveakl]

I could be wrong. But when you take a ton of the $2000 car buyers off the market, those people still need a car. That jacks up the price of low in cars and all the more expensive cars compensate. If a car that went for $2000 last year is going for $3000 this year because demand outstrips inventory, the $3000 cars move up in value to $4000. That has to affect used car prices.

There ya go

[Tarpon75]

The vast majority of clunkers were exactly that....pieces of crap. The government action was VERY beneficial to the car companies, car dealers, car buyers, the move to conserve fuel, etc. Your anger is misdirected and your research is flawed.

You are wrong and this action was far from beneficial. I have been in the car business for over 25 years and this program was the largest setback ever to the auto industry. I buy cars on a wholesale basis and attend auctions sometimes 3-5 times per week.l also purchase trade ins from dealerships when possible.During the clunker program I would frequent dealerships that had rows of viable used cars lined up waiting to be sent to the crusher.What the program did was take alot of good cars off the market hurting retail purchasers and dealers as well as used parts distributors.Yes there were alot of very good autos crushed. Not to mention the cost to the tax payer associated with destroying these cars.You might be able to convince some people that what you are saying is true but you won't convince anyone who knows anything about the car business.The used car industry and the consumer are still feeling the effects of a serious shortage of cars.

[Tarpon75]

There ya go

No,you aren't wrong.

[Tarpon75]

From the link... Credit the prolonged recession with prompting more Americans to buy used, sending the average price of a 3-year-old car up 11.1 percent from last year and triple the usual annual increase, reports Edmunds.com, an auto research site.

A 3-year old car is not a clunker.

You are right in your point that the recession has extended this problem but the cars needlessly taken out of the market is the largest culprit.Even if you are right and some of those cars had major flaws in many cases, it was still equitable to repair and then market those cars.This program also hurt repair facilities.In the market here in Fla. there was positively alot of decent vehicles taken out of the process .

[Bostic Hog]

You are wrong and this action was far from beneficial. I have been in the car business for over 25 years and this program was the largest setback ever to the auto industry. I buy cars on a wholesale basis and attend auctions sometimes 3-5 times per week.l also purchase trade ins from dealerships when possible.During the clunker program I would frequent dealerships that had rows of viable used cars lined up waiting to be sent to the crusher.What the program did was take alot of good cars off the market hurting retail purchasers and dealers as well as used parts distributors.Yes there were alot of very good autos crushed. Not to mention the cost to the tax payer associated with destroying these cars.You might be able to convince some people that what you are saying is true but you won't convince anyone who knows anything about the car business.The used car industry and the consumer are still feeling the effects of a serious shortage of cars.

I'm not in the auto business, but I thought these cars that were taken in the "Cash for Clunkers" were gas guzzlers. Like they didn't qualify for the rebate if they got more than 18 mpg or something. What kind of market is there for these cars, even now? Who wants a 88 Explorer or an 86 Cadillac BOAT?????? Good autos were crushed, probably, but was there really a market for these cars?

[Sandman69]

How else are the Pimps supposed to get their rides now?

[Tarpon75]

I'm not in the auto business, but I thought these cars that were taken in the "Cash for Clunkers" were gas guzzlers. Like they didn't qualify for the rebate if they got more than 18 mpg or something. What kind of market is there for these cars, even now? Who wants a 88 Explorer or an 86 Cadillac BOAT?????? Good autos were crushed, probably, but was there really a market for these cars?

Those autos that were crushed were a very large segment of the inexspensive car market.Some were guzzlers just as there are many so called guzzlers on the market now.Suv's,trucks,and cars that get 17 miles to the gallon have not been outlawed.There are many new autos being sold currently that don't average 17 miles per.Those examples your are giving were not the cars I saw waiting to be crushed,as I said there were many viable cars crushed.There may have been some of those cars you mentioned but I saw small suvs and large suvs as well as cars that were of late 90's and even 2000's vintage.By the way Explorers weren't made until 1991. Not everyone can afford a 2010.

[TradeTheBeal!]

I have been in the car business for over 25 years and this program was the largest setback ever to the auto industry.

I've been in the biz for 20 years and this statement is just goofy. "Largest setback ever"? I dare you to step to a 25 year Pontiac sales manager/mechanic/plant worker and play your violin.

I buy cars on a wholesale basis and attend auctions sometimes 3-5 times per week.l also purchase trade ins from dealerships when possible.During the clunker program I would frequent dealerships that had rows of viable used cars lined up waiting to be sent to the crusher.What the program did was take alot of good cars off the market hurting retail purchasers and dealers as well as used parts distributors.Yes there were alot of very good autos crushed.

Yep. For about 9 months, used car prices went up by roughly 10-15%, then stabilized. Profit margins also got smaller. After nearly a decade of easy living, the biz actually got challenging for a little bit. I don't remember any starving wholesalers, though.

Not to mention the cost to the tax payer associated with destroying these cars.You might be able to convince some people that what you are saying is true but you won't convince anyone who knows anything about the car business.The used car industry and the consumer are still feeling the effects of a serious shortage of cars.

Leave the "tax payer" out of it. We all pay taxes.

The shortage of cars you reference began well before C4C, when gas spiked and nearly all manufacturers idled truck plants...most idled full-size car plants too. Thin new car inventories had just as much effect on the elevation of used car prices as any other factor. See ya at the auction.

[DeanCollins]

Looks like no one took the decline in the average persons credit worthiness into this equation. It may be that, because of home foreclosures, job loses, and the many that aren't paying their credit bills on time or not at all, that these folks can't buy new cars or qualify for the better deals/ financing that new car dealers offer. These would be new car buyers are now increasing the number of used car buyers, increasing demand. There are an unbelievable amount of "Buy here/ pay here" used car dealers here in FL for that reason, as well as pawn shops, and predatory lendor/banks like Amscott.

Your best bet, for finding a good deal on a used car, is buying from a private party, which usually involves cash. If that's not possible, get pre-qualified for a loan and then look for private sales.

[Tarpon75]

I've been in the biz for 20 years and this statement is just goofy. "Largest setback ever"? I dare you to step to a 25 year Pontiac sales manager/mechanic/plant worker and play your violin.

Yep. For about 9 months, used car prices went up by roughly 10-15%, then stabilized. Profit margins also got smaller. After nearly a decade of easy living, the biz actually got challenging for a little bit. I don't remember any starving wholesalers, though.

Let me rephrase my original statement,this program was the largest setback to the used car business that I have seen.There was no positive effect for anyone in the business or for the consumer.I didn't say anyone starved but many were needlessly effected by this program.Any gains in new cars sales were negated in the months following the program when sales fell flat.I'll stand by my premise that this program was a flop.

I am aware that we all pay taxes but this program needlessly added to an already bloated deficit at tax payers exspense.Have any idea how much it cost the tax payer to crush each car?Maybe this link will help with that as well as add a little more perspective on the effects of this program. www.edmunds.com/help/about/press/159446/article.html

[joe]

Redistribution of weath is clearly more accurate. Moreso than unintended consequences. What it is not is a tax.

There is no question that the program increased the price of used cars. This was a known consequence from the time the program was proposed. The car industry, and by that I mean new cars, desperately needed to be propped up. The government chose to do so by taking gas guzzlers off the roads, which to my mind is not a bad thing. Yes, viable cars were crushed, I know this better than some, I drive old cars. I have an 86 Saab, an 87 Benz, a 99 Saab and a 99 Volvo, three of which are worth far less than the governments $4000 payoff (the 560SL obviously being the exception), but I could not trade them in under the program because all but the Benz exceeded the poor gas mileage requirments of the program. In addition, I am in the market for a used car ('cause my Volvo has lots of miles and needs much more work than it is worth) so I am really feeling the effects of the increase in prices for used cars. But what the heck, you shop with the market that you have, not the market that you want:-)

The word "tax" is a boogieman. Kinda like Jason in a hockey mask or Freddy Kruger with his slouchy hat. It was misapplied here.

[TradeTheBeal!]

Your best bet, for finding a good deal on a used car, is buying from a private party, which usually involves cash. If that's not possible, get pre-qualified for a loan and then look for private sales.

Absolutely nothing wrong with buying a car from a reputable dealer.

[DeanCollins]

Absolutely nothing wrong with buying a car from a reputable dealer.

Never said that there was, however, buying a car from a private individual yields the opportunity for a lower price. What I don't like about buying cars from dealers is they toss the vehicles records out, and then they claim ignorance about the cars history. Aside from a carfax (which aren't always accurate) you're on your own. I like seeing the maintanance records with the car to get an accurate picture of how that owner treated the car. For instance, on all my cars I change ALL the fluids front to back every 30k miles, oil is synthetic and gets changed at 4500. Most people don't take very good care of their cars.