Clunker Cash for Cars and Soon Clunker Cash for Appliances
President Obama came up with this energy-saving idea using stimulus money.The president offered the public a chance to exchange those heavy, gas-burning cars for newer models that were more energy efficient and would be subsidized by stimulus money.You trade in your clunker and receive $4,500 toward the newer car, supposedly more environmentally efficient.But beware, there is talk that there maybe a similar stimulus bill for you to buy newer appliances that are also more energy efficient.My friend Tony from Staten Island, an electrical engineer, sent me this e-mail regarding this great deal. Ha!
“What a farce. I suspect those who took it will soon wake up when they find out they will get a 1099 form from the government for the $4,500.00 they received. Ignore all the gas crap and just look at how the stupid car buyer got taken to the cleaners: If you traded in a clunker worth $3500, you get $4500 off for an apparent “savings” of $1000. However, you have to pay taxes on the $4500 come April 15th (something that no auto dealer will tell you) and if you are in the 30% tax bracket; you will pay $1350 on that $4500.
So, rather than save $1000, you actually pay an extra $350 to the feds.In addition, you traded in a car that was most likely paid for.Now you have 4 or 5 years of payments on a car that you did not need, that was costing you less to run than the payments that you will now be making. But wait, it gets even better:you also got ripped off by the dealer. For example, every dealer in AZ was selling the Ford Focus with all the goodies including A/C, auto transmission, power windows, etc for $12,500 the month before the “cash for clunkers” program started. We could also add in the additional taxes (sales tax, state tax, etc.) on the extra $3000 that you paid for the car, along with the 5 years of interest on the car loan but let’s just stop here.
So who actually made out on the deal?The feds collected taxes on the car along with taxes on the $4500 they “gave” you.The car dealers made an extra $3000 or more on every car they sold along with the kickbacks from the manufacturers and the loan companies. The manufacturers got to dump lots of cars they could not give away the month before.And the poor stupid consumer got saddled with even more debt that they cannot afford.Obama and his band of merry men convinced Joe consumer that he was getting $4500 in “free” money from the “government” when in fact Joe was giving away his $3500 car and paying an additional $3350 for the privilege.”
Thank You Tony for enlightening us and Thank YOU Mr. President.
Screech at you next week!