Cash for Clunkers – is the whole idea a clunker?

It’s probably just me, but I think the whole scheme is a crock. The question is what exactly is being addressed by this scheme, because no matter which angle I approach it from it doesn’t stack.

The US government have at least put an age restriction in place which means cars over 25 years old don’t qualify for the scheme and so won’t be scrapped – shame the British government haven’t adopted the same policy, it didn’t escape some of the media that Humbers, Morris Minors etc have surprisingly been scrapped over here.

If you take the environmental angle you’ll be told it’s to get all the old cars off the roads that are belching smoke and pumping out tons of CO2. Hmmm, not sure about that.

In the US being under 25years old they would have been manufactured in 1984 or more recently, meaning they will all run on unleaded fuel and likely to have fuel injection with catalytic converters – not exactly pumping out hydrocarbons then. Take a look at YouTube and put in “cash for clunkers” you’ll see that there are a good number of vehicles which are far from nearing the end of their life – certainly not my understanding of what a “clunker” should be.

As part of the decommissioning process all the vehicles must have their engines seized to avoid the vehicle being re-sold or used for parts. This is done by pouring a solution into the engine through the oil filler and running the engine until it seizes. For anyone with the slightest engineering background these videos will be painful to watch. Some of the Volvo’s appear to be the cleanest, but which ever make you choose they all appear very road worthy and put up a good fight before seizing.

But take a look at the resulting smoke coming from the car as the engine rapidly wears under the treatment and then the dumping of its fluids onto the ground as it finally expires, it doesn’t seem to be the cleanest or most environmentally friendly option for decommissioning.

Then take into account the vehicles that haven’t been scrapped. At some point they will require parts, and they could benefit from the used parts rather than new parts having to be manufactured using fresh materials and the enormous CO2 footprint from the manufacturing process to make them. So the environmental grounds aren’t that strong.

So it must be financial, right?

My understanding of the idea is to get the economy going with an incentive to help people buy cars and help the Auto industry. OK, so how did the whole financial crisis come about?

Well, I thought it was down to excessive borrowing leading to defaulting of payments and loans. So who are the people most likely to be running a “clunker”?

My guess is that it will be lower income individuals / families who can’t afford to run anything else, but they don’t want to miss out on what they consider to be their best opportunity to get top dollar for their car. So how will they pay the balance – probably take advantage of a loan, so borrowing more money!

Aren’t we now back where it all started?

As for the Auto industry needing help, well with some of their offerings they don’t exactly do themselves any favours and it’s probably only a suitable financial incentive that would tempt anyone to buy!

Like I say, I've probably missed the point - but then I'm not sure there ever was one.