Do the math!

[softballmafia]

SO...you took FEDZILLA up on its offer of $4500. dollars to trade in your old "Clunker" (interesting choice of words)? Well, let's see who got the best of that "deal"...
If you traded in a clunker worth $3500, you got $4500 off for an apparent "savings" of $1000. You could have gotten $3,500 if you had just traded the car in. So you really are $1,000 ahead (depending on your clunker's value) at this point. Not too bad...

However, you WILL have to pay taxes on the $4500 come April 15th (something that no auto dealer will tell you). If you are in the 30% tax bracket, you will pay $1350 on that $4500.

So, rather than save $1000, you will 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, trading in a "clunker" that was costing you less to run than the payments that you will now be making. Even if you save $1,000. dollars a year in gas due to better mileage, you're still gonna be in the red for five years....hello?

But wait, it gets even better: you also got ripped off by the dealer. For example, the month before the "cash for clunkers" program started, every dealer here in LA was selling the Ford Focus with all the goodies including A/C, auto transmission, power windows, etc for $12,500. because competition was stiff due to poor sales from the stalled economy.

When "cash for clunkers" came along, they stopped discounting them and instead sold them at the list price of $15,500. So, you paid $3000 more than you would have the month before. Honda, Toyota , and Kia played the same list price game that Ford and Chevy did. Now let's do the math...
You traded in a car worth: $3500
You got a discount of: $4500
---------
Net so far +$1000
But you have to pay: $1350 in taxes on the $4500
--------
Net so far: -$350 (that's minus...in the red)
And you paid: $3000 more than the car was selling for the month before
----------
Net Loss: -$3350

We could also add in the additional taxes (sales tax, state tax, dealer prep, etc.) on the extra $3000 that you paid for the car, along with the Five years of interest on the car loan; but let's just stop here while you kick yourself. Suffice it to say that those costs will be much higher than any savings you get from "better mileage".

So who actually made out on the deal? FEDZILLA collected taxes on the car along with taxeson 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. Manufacturers got to dump lots of cars they could not give away the month before. Lots of good or repairable used cars got taken off the market, crushed and sold as scrap metal to (ready for this?) CHINA ! (Look it up...) And the poor consumer got saddled with even more debt that they cannot afford.

FEDZILLA'S merry men (who promised that people making less than $250,000. would pay "not one red cent more in taxes") will make millions in new tax revenues after convincing Joe Consumer that he was getting $4500 in "free" money from the "government" In fact, Joe was giving away his $3500 car and paying an additional $3350 for the privilege.

If you find errors in this math, please let me know.. .being a simple guy, I'm always willing to learn new things; and if you took "advantage" of the Clunkers deal, I have some swamp land down in Florida that's for sale...

And remember, these are the same Einsteins who want to take control of our health care system. Hold on to your wallet!!

[hotwheels]

Great read!

[CrushersDad]

Yes, very good read!

I look forward to seeing what I will save with the government health insurance!!!

[coachmatt]

the only good thing that came out of the cash for clunkers is ALL THOSE OBAMA STICKERS ARE NOT ON THE ROAD ANY LONGER

[Skarp]

the only good thing that came out of the cash for clunkers is ALL THOSE OBAMA STICKERS ARE NOT ON THE ROAD ANY LONGER

Just saw a new one--"WWOD." I almost barfed in my Big Gulp.

[softballgm]

"WWOD". . . .now THAT is scary.

[softballmafia]

WWOD what will obama do by elm.jpg (35.64 KiB) Viewed 5477 times

[Skarp]

Here's the really good news. It cost taxpayers only $24,000 per car sold under the clunkers program.
http://money.cnn.com/2009/10/28/autos/c ... /index.htm

The government can't even give money away without bungling it, and we're supposed to trust them to competently run massive, ongoing programs? How f'ing stupid have we become in this country?

[GSB]

I got another 6 yrs until my little one is gone. Then I'm going full Jeremiah Johnson and living in a cabin in Idaho......... as long as I can get wireless internet

Can you skin a griz Pilgrim?

[jofus]

Is this swing linear or rotational?