Cash for Clunkers Closing Down on Monday

By in Misc, Spend

Cash for Clunkers is about to close down.  The plan is to shut the program down Monday evening at 8 PM ET because it’s predicted to run out of money by that time.   Click here for the official press release.

Not sure, but I think most dealerships are closed on Sundays (maybe some are open for this deal?), so that only leaves Monday.  I’m sure today was a huge day for the program with everyone quickly evaluating their car against the criteria for trade in. 

And how many auto sells are reported from the Cash for Clunkers program? 

Last I saw there have been 457,000 dealer transactions ($1.9 billion in rebates) and that was from an article on Friday.  It’s great auto sales are back up which obviously means production must increase to keep up with the demand.  What happens when the supply is less than demand (at least for an interim period)?  Yes, the price of vehicles climbs up as well. So be careful you last minute shoppers and determine if that new car you’ve been considering has gone up in price.  Your cash for clunker rebate may not stretch quite as far.

Downsides to the Cash for Clunkers program

With any program there are some downsides.  Again, happy to see some boost in this area of the economy as has been reported, but with a lot of dealer transactions, there must be a lot of new car debt.  So another thing to consider is the debt that comes with owning a new car.  You may have been driving a clunker, but did your clunker come with a monthly car payment?  Sure, clunkers come with a price.  They have maintenance, but in the end, I guess you have to decide how the price of maintenance (when broken down each month) on a clunker compares with carrying new car debt. 

Here’s a good read on the subect.  Christian PF posted When should you replace your old car?

What do you think of the Cash for Clunkers program?

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About Jason

Jason started blogging in 2009 when he created One Money Design. Since then it has grown into a group of writers with unique personalities and a common goal of helping people on the journey to true financial freedom. Jason is an IT project manager by day, but you’ll find him blogging about personal finance and exploring web entrepreneurship late at night and the early hours of the morning. He’s also actively involved in a financial coaching ministry in his community where he shares principles of biblical stewardship and helps people learn to manage their money wisely. Jason enjoys spending time with his wonderful wife and two awesome children and lives in north Dallas. Twitter | Facebook | +Jason Price
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  • http://glennatias.podbean.com/ Glenn Atias

    But there’s a whole other component of debt in this that you’re not considering – public debt. The government is broke. This money that it handed out to a select group to subsidize their car purchase came from borrowing it from the future generations.

    CFC wasn’t a freebie. America’s children will have to pay for it. That money was borrowed on the open market from the Chinese, who we are now indebted to for trillions.

    Plus, it was a very unfair subsidization. It rewarded those who made poor vehicle choices to begin with. CFC was nothing less than a moral abomination – selectively picking and choosing only certain people, yet obligating EVERYONE’S children to someday have to pay this money back.

    Would robbing our kid’s piggy banks be considered sound Biblical principals?

    The concept of debt is far bigger than just your one quote – debt is closely related to our spiritual conditions. Debt is so closely related, Jesus uses the concept of being in debt, as much or more than any other concept, when describing the Kingdom.

    Debt was involved in the parable where the wicked servant was forgiven of his debt, yet refused to forgive others. Debt was involved when the master of the household went away and entrusted his 10 servants with the talons. Debt was involved when Jesus and Peter were passing through a country and tribute was expected of them.

    Our physical debts are closely related to our spiritual debts. So much so, that the condition of being indebted is used as a teaching tool in Scripture again and again.

    CFC, just like the 2 trillion dollar bank bailout, is a situation where we are trying to solve problems that are caused by too much debt, with even more debt. CFC is just one more debt abomination that is going to get us into big trouble, at home with our fellow man, and with the Lord.

    • Jason @ One Money Design

      Glenn, thank you for your comments and reminding us all the concept of debt is much bigger here given the stimulas funds that have been borrowed for the program and that future generations will have to repay them. Debt is a vicious cycle and more of it doesn’t fix the underlying problem.