A Real Clunker

I’m torn, if you want to know the truth.

Last week, the United States Senate passed the “Cash for Clunkers” bill — they tucked it into an emergency war-funding bill — and President Obama will soon sign it into law.

Here’s how the clunker bill works:

If your current car averages 18 or fewer miles per gallon, you’ll qualify for a $3,500 voucher toward the cost of a new car — so long as the new car averages at least 4 mpg more.

Better: If you buy a new car that averages 10 mpg better than your current car, the government will give you a $4,500 voucher.

That is why I’m torn.

I own two vehicles: a 2001 Nissan Maxima SE and a 1992 Chevy S-10 truck, both in excellent condition.

My Maxima gets 19 mpg in the city — it averages 22 mpg — so it doesn’t qualify for government dough.

But my truck surely does. It only gets about 10 mpg.

Of course, that isn’t a problem. The truck sits in my father’s garage most of the time. It goes out only when someone in my family needs to pick up a piece of furniture or some mulch.

I love that truck.

Its dated two-tone silver-and-maroon paint job, white-letter tires and red velour interior scream “1992.” It’s the kind of vehicle somebody like Bill Clinton might have used to pick up someone like Monica Lewinsky.

Despite its coolness — despite its near-mint condition — the truck is 17 years old. In the real market — the free market — it is worth only $2,500.

Which puts me in a troubling position.

Once President Obama signs the clunker bill into law, my truck will instantly be worth $4,500. All I have to do is find a new vehicle that gets 22 mpg — not hard to do.

Of course I don’t need or want a new vehicle. I love my Maxima. And my truck is perfect for what it is intended to do.

And I can’t bear the thought of what will happen to my beloved truck if I take the deal. All vehicles traded in under the clunker program will be crushed into a block of steel and smelted. Not even the transmission or the motor can be salvaged.

But then again, one must keep emotion out of financial decisions. Only the government is dumb enough to pay me $4,500 for a $2,500 vehicle — and only a dummy would walk away from a $2,000 gain.

Sure, I know what the critics are saying: The program’s $1 billion price tag is a waste of money at a time when we’re bleeding red ink. I know we’ve already squandered some $30 billion meddling in the private auto industry and have likely made things worse, not better.

I know the unintended consequences of the government’s clunker program will hit the poor and middle class the hardest. Even with government perks, many people can’t afford a new car. Because the program will take thousands of used cars out of service, it will cause the cost of used cars to go up.

I know the political class is trying to impose a desired outcome on us. They’re eager for us to drive ever dinkier cars. I know they’re bribing us — with our own dough — to make us bend to their will.

But then again, this will surely be my last chance to qualify for a government perk of any kind.

I’m generally on the paying end of government programs — not the receiving end — and all of us will be paying plenty more if Obama succeeds in signing a torrent of big-spending programs into law.

And so I am torn.

I had been happy with my two perfectly good vehicles, but, suddenly, I’m thrust into the throes of a major automotive decision.

I’ve been avoiding my truck lately. Wracked with guilt — I can’t believe I may be bought off for a lousy 2,000 bucks — I can’t look my truck in the headlights.

Such are the peculiar thoughts that only the government can produce.

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  • fatherjo

    In some countries (e.g., Switzerland, Japan) it is illegal to have a car more than ten years old, no matter how much you like it or how good it runs. That is probably what they are going to force us to do here eventually.

  • shelalles

    To be honest, this decision does not seem like a hard one to me given the fact that you are not really “getting” $2000 for your truck. If you traded it in under the program, you would be paying $15,500 for a $20,000 vehicle, or something comparable. The taxpayers don’t actually see the money, it goes to the dealerships. We just get a price reduction. Now, if you are in the market for a new vehicle, why not take advantage of the program? But I think it is dangerous to be lured into a government program thinking we will make out ahead of where we are now. At the end of the day, using this program will cost us thousands of dollars and not put a dime back into our pockets.

  • SeanReynoldsNZ

    G’day Fatherjo,

    In case you’re wondering what happens to those cars from Japan, try looking on the roads in New Zealand sometime. The roads there are filled with Jap imports. That is how I managed to pick up a reasonable used car there.

    My wife and I got a real shock when we arrived in Australia: Used cars are a lot more expensive here than they are in New Zealand. They get even more expensive when you factor in the exchange rate between New Zealand and Australian dollars too. That is because the Commonwealth Government of Australia charges a 15% tariff on all imported vehicles to protect the Ford and Holden (GM) factories here.

    What we did notice though is that if you’re in the market for a new Holden Commodore or a Ford Falcon, it’s a bucket load cheaper over here than in NZ. But I would much rather be driving a Subaru Forester.