I did some research on the internet and put together a list of pros and cons regarding the “Cash For Clunkers” program. I made a list for the person who is considering buying a car through the program, and also a list for the “Collective Soul”, so that we consider the overall impact on the universe, as described in this article.
So far the pros and cons add to this: Singles: 4-Pro, 6-Con. Collective soul: 6-Pro, 12-Con.
INDIVIDUAL:
Pros
1. $ 4,500 + other incentives, you may be able to save a lot of money on a new car purchase if you push for more incentives in addition to the $ 4,500.
2. Less gas. It could save a lot of money at the pump.
3. Reduce repair costs.
4. Environment: your driving will cause less pollution.
Cons
1. Insurance: In general, it costs more to insure a new car.
2. New debt: is it wise to borrow more in your financial situation?
3. Wasted parts: your old car will be destroyed. It is questionable whether some of the pieces will be recycled or not.
4. Added value to your old junk. The used car market may heat up due to declining supply. Your used car may be worth more than the coupon after the trickle of this Cash for Clunkers program.
5. More gas. You may be inclined to drive more knowing that your car gets better gas mileage.
6. Comfort zone. YOU KNOW your old car. And you know what repairs you have done and what is likely to go wrong.
FOR THE COLLECTIVE SOUL:
Pros
1. Increase sales at car dealerships.
2. Increased sales of new cars to consumers who would not otherwise buy at this time. For upper- and middle-income people with good enough credit to get a car loan, it gives them a down payment.
3. Old vehicles tend to consume less fuel than their modern counterparts, so taking them off the road and replacing them with newer cars would likely reduce the oil consumption of individual owners and the nation.
4. In general, old vehicles do not run as clean as new vehicles, so removing and replacing them on our roads would likely decrease vehicle exhaust emissions, lessening the impact on the environment.
5. Old vehicles were not subject to the same crash and safety regulations as new cars and tend to be less safe in an accident. Replacing them with newer vehicles could lead to fewer injuries and deaths in car accidents.
6. Automakers are struggling right now, especially domestic automakers. Providing a financial incentive to buy new cars would likely lead to increased car sales, generating revenue for automakers and helping them weather the economic downturn, while stimulating the economy at the same time.
Cons
1. Artificial and unsustainable boom in car sales.
2. Squashing those old running cars makes those parts and vehicles harder to come by and consequently more expensive.
3. Many companies make parts and upgrades for older vehicles. A reduced supply of older vehicles would negatively affect your sales.
4. The automotive restoration and customization industry relies on vintage automobiles as the basis for its products. A reduced supply of older vehicles would negatively affect your sales.
5. For low-income people, it makes it harder to find and maintain an older vehicle.
6. Convincing low-income “junk” drivers to go out and finance a new car while we are still in the midst of the fallout from easy credit in the housing market.
7. Send vehicle donations to charities. Some charities that rely on vehicle donations for funding say they are getting fewer cars and trucks, because donors change their minds and decide to trade in the vehicles in the Cash for Clunkers program.
8. Actually, some older vehicles get better gas mileage than some newer ones. Replacing them would nullify any benefit to the environment or America’s oil consumption problem.
9. Encouraging consumers to scrap running vehicles could shorten the life of cars and encourage new car production, which would have a greater adverse effect on the environment than keeping the older car.
10. This proposal would not necessarily benefit car manufacturers in the worst financial situation, as there is no guarantee that consumers will use their incentive to buy a vehicle from one of those manufacturers and not from another company.
11. The program is not restricted to AMERICANS, and is not restricted to AMERICAN-made vehicles, but comes from AMERICAN taxpayer money.
12. It costs more than $ 4,500 per exchange. It costs approximately $ 6,000 per vehicle, when you factor in the cost of additional government personnel, office space rental, equipment, employees, web development, form printing, etc.
http://en.wikipedia.org/wiki/Car_Allowance_Rebate_System