Cash For Clunkers – Pros and Cons

These days there seems to be only one buzzword doing the rounds in America’s Economic circles! Any guesses? ….Yes! You’ve guessed it right. Its “Cash for Clunkers”,  President Obama’s bill, now known as Car Allowance Rebate System is  one where you exchange your  old vehicle for a new one at a credit of $3,500 -$4,500. Now that’s a deal isn’t it? This endeavor by the Obama government to boost fuel economy seems to be getting a roaring response from the common man. This program covers most vehicles like SUV’s, large trucks and pick up vehicles, apart from the regular family cars. The program covers deals taking place between the 1st July and 1st November 2009. So if you want to go for it, now is the time.

Many people seem to have benefited from the cash for clunkers program. The automobile industry ultimately seems to be getting the rewards of the program. The customer response is overwhelming. The customer requirements seem to be matching the expectations of the automobile industry. The vehicles that need to be noticed have got the attention. Prius seems to have been the model in the limelight with an attention percentage of 212 in a span of just one month from May to June. Hyundai Elantra seems to have gotten a 109 percent attention in the same period and 93 percent from June-July. Other vehicles got 30 % more attention .so ultimately the cash for clunkers program seems to be a hit with the common man. At least it appears to be so.

What is encouraging is that the people who were interested in this program were not regular customers. Many new people ventured out to try this program. Rather, those people who were thrifty with their money were the ones who came forward to try out this program. Under other circumstances they wouldn’t buy new cars, but the credit system seems to be so lucrative that they bought new ones.

However though things seemed to be very bright with the program, there are certain things going against the program. Though it looks beneficial from the point of view of customers, the dealers are complaining. They were not clear about the website that they had to register with. Some consumers also feel that the taxes that they pay should not be used for changing their old cars only for the purpose of getting a new car and money.

Now it seems many dealers are withdrawing from the program because  of delayed funds from the capital.  They don’t have the finances to pay more rebate and they are also concerned about getting payments for the deals from the customers. As Gather reports according to a news release from AP , “The Greater New York Automobile Dealers Association, which represents dealerships in the New York metro area, said about half its 425 members have left the program because they cannot afford to offer more rebates. They’re also worried about getting repaid.”

It seems a need for governmental financial aid for supporting the dealers was felt.

Cash for Clunkers seems to be good from the environmental point of view and also from fuel economy point of view. Efficient cars are less polluting environmentally.  Fuel efficiency is what you’d require in your vehicle when the oil prices are soaring very high. When you don’t know where your fuel prices are destined to in the coming few days, its better to opt for fuel efficient vehicles. But some people are deliberately exchanging cars that are in good condition.

The debate about the worthiness of the program and its misuse will continue. I feel the government should help the dealers out financially to make this program a huge success.