The program may sound good at first, but people in the car business have a lot of questions about it. That's partly because details on the program have not yet been released. But from what information is out there, the cash for clunkers program may cause some unintended consequences for those who can least afford it.
Jones West Ford already has a sign up letting drivers know they'll be a "cash for clunkers" dealership. New cars that can replace the old under the program are readily on display. Inside Ford has already installed information systems that can determine if new car buyers qualify for 35-or 45-hundred dollars when they turn in their clunker. But until Ford knows the exact details of the program on Friday all of their plans are on hold.
“Artificial prop ups are doomed to fail,” says Greg Lightning Williams of Lightning Auctions.
Williams auctions off used cars and says the "cash for clunkers" program will disenfranchise those who cannot afford a new car. Reportedly "clunkers" defined by the feds as a gas guzzler will be sent to scrap, which means a lot more of the used, less expensive cars won't be available to those who have few options.
“Cars turn around and around and around and around. Someone has to buy a new care to put another used car on the street. We need used cars and if we take these used cars away, it’s gonna be a problem for a lot of people,” says Williams
Those in new car sales have questions as well. While a new approved vehicle will mean the buyer will get better gas mileage than his old vehicle and create less emissions. Will that car buyer be able to get financing? And will that car buyer even want to take on additional debt?
“For me my car is almost paid off, so I would keep the car I have which gets 37-miles a gallon,” says Rene Johnson a local car owner.
One car salesman I talked to today had another point. He calculated the one billion dollar "cash for clunkers" means every dealership in this country could see an average 11 new cars off their lots. That may mean more for larger dealerships, fewer cars for other car salesman.
While you may want to take advantage of the “cash for clunkers” program, its important to remember not all cars qualify as clunkers. Check with a participating dealership to see if your current car can get you the $3,500 to $4,500 dollar credit.