"With surprising swiftness, the government's "cash for clunkers" program has burned through its $1-billion budget in less than a week as car buyers swarmed dealerships, and federal officials were scrambling late Thursday night to find more money to keep it going."
"Robert Gibbs, a White House spokesman, said the administration was looking for ways to continue the popular new program, which offers $3,500 to $4,500 for people who trade in an old car for a new one with higher fuel economy."
This is generating a lot of excitement and moving some iron. So if the customer qualifies they get the $4500 credit, GM rebates, and in most cases a GM discount.
Here are some of the highlights or benefits as I see them.
1. A new car is sold
a. GM gets one sold
b. the dealer gets one sold
c. the salesperson makes money
d. if financed the financial institution makes money
e. the state makes money on sales tax
f. the state makes money on state fees
g. the makes money because new ones get a full tank
h. the oil company makes money and its logistical team makes money
2. A clunker is taken in
a. the dealer makes $50 for disabling the engine ( supplies cost $30 )
b. the is paid by government to destroy motor/transmission
c. the junk yard parts out remaining parts
d. the junk yard sells the scrap metal
3. A clunker off the road
a. better emissions
b. better gas mileage
c. insurance company makes more money (naturally) now insuring newer vehicle
d. safer vehicle (less medical expenses in case of accident)
Someone needs to share some of this with the lawmakers who feel that GM, Ford, and Chrysler are not far reaching into the economy of the US. We haven't even taken a look at all the suppliers who sell parts, cleaners, solvents, etc. that make all of the above work.
Probably the one industry benefiting the most is the paper industry — the gov't LOVES paperwork. But a few trees are probably worth what this program is producing.