Clunkers and Winners

Last weekend I was camping in Indianan. Someone else at the event had his brakes go bad on the drive there from Wisconsin. He had his van checked. The master cylinder and the brake lines needed replaced. The van was a Chevy Astro and GM hasn't made replacement parts for it in years so he would have to find parts from a junked Astro. He decided that this was going to cost way more than the van was worth. Instead he planned to donate the van to a local charity, drive home in a rental car and buy a new car there.

After talking with his family they decided on a different plan. His father-in-law would drive down with a truck and haul the van back home. Then the would trade the van in for Cash-For-Clunker money.

There are several winners and losers here. The big winner was the owner of the van. He was going to get a government check for several times the worth of a van that would have ended up scrapped, anyway.

The losers are the charity that would have gotten the van. They wouldn't have gotten much for it but now they will get nothing. Multiply this by thousands to see the true effect on charities.

I'm not sure about the rental industry. They rented a truck for a round trip instead of a car for a one-way trip. One-way rentals are expensive for the renter and inconvenient for the rental agency. I'll call this one a wash.

Astro owners in general are slight losers. That's one fewer Astro to be broken down for spare parts. Instead it will be crushed. One van doesn't make much difference but multiply that by thousands and you are setting up for a spare parts shortage for years to come.

I don't know if the automobile industry will come out ahead or break even. They were going to sell a new car, regardless. They might sell a more expensive one because of this. Or they might not.

The biggest loser is the US taxpayer. We subsidized a transaction that would have heppened anyway. We paid several times what the van is worth to no real effect since it would likely be scrapped anyway.