Jeff’s absolutely right about the cash for clunkers program: it creates an incentive for people to sell their cars to dealerships when they would have sold it to someone else. I’m one of those people.
I’ve been driving around my parents’ old 1995 Ford Explorer that had 225,000 miles on it but. But it has been maintained well and ran quite nicely. It actually would have been a great, cheap car for someone who only needs transportation to get to and from work.
But along came the government.
I have been thinking about getting a new car for a while. I don’t actually need a big SUV and was planning on buying a sedan. My dad called me when he heard about the cash for clunkers program and suggested I take advantage of it. Since I am not at home right now (where my car is), he said he would be willing to trade in the car and co-sign on a new one.
Why act now and not wait until I get home? Well the government set aside a limited amount of money and if I had waited I may not have been able to take advantage of the program. So after deciding I could afford a new car, we went ahead and bought a 2010 Toyota Corolla.
I was never going to get $4,500 (plus trade-in value) for my old car. Heck, I would have been happy with half that. And I am sure someone would have been willing to pay me that asking price. But instead my old car is going to be scrap metal. I was looking at getting a new car and taking advantage of this program was good economics.
My dad half-jokingly referred to what we did as “misusing taxpayer money,” which raises a question I’ll address in my next post: should libertarians take advantage of programs that we disagree with (and know are wrong)?
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