The Wastefulness of the Cash-for-Clunkers Program

Saw this in the November issue of Road & Track…

…the dealership was taking in a lot of trades on the Cash for Clunkers program — they’d sold 60 cars in four days! — but he also noted that, in one respect, it was kind of a shame.

“How so?” I asked.

“Well, when these cars come in, we’re required by law to destroy the engines so they can never run again. The mechanics have been draining the oil and the coolant out of them, and then giving them the old broomstick test, or putting a brick on the accelerator until the engine seizes.”

“Really…” I said, suddenly feeling a little lightheaded.

“We had a really clean older Chevy pickup come in on trade — no rust, 6-cylinder engine running perfectly — and we had to drain the oil and burn out the engine. We also had a nice Windstar minivan come in with about 100,000 miles on it. It ran fine, but we had to destroy it.”

“What happens to the rest of the car, once the engine is gone?”

“It has to be scrapped and parted out.”

Strangely, I hadn’t even asked myself — until that moment — what would happen to our Jeep if we traded it in. I guess I naively pictured it being given to a medical clinic in sub-Saharan Africa, or going to some happy hunting ground where Jeeps are young again, and free to perch on buttes in Monument Valley.

The very idea of intentionally ruining that trusty old 318 in our Jeep — a classic American V-8, and one of the best — made me suddenly queasy. But then maybe that’s just me.

You can read the rest here: Side Glances: Cash for Clunkers

I have to say, I agree with the author. It does seem like a waste to ruin good engines. I understand the motives, but I think it just shows how wasteful government programs are.

Is 41 Miles per Gallon Enough to Justify Buying a Smart?


I was just on the SmartUSA website. I have seen a few Smarts driving around town and thought I would check them out. Their prices aren’t too bad and I think they are nice-looking cars. But, I have to say I’m disappointed with their fuel economy, which is 33/41 (city/highway). Keep in mind that those numbers are estimates. We all know how those numbers usually don’t reflect reality. In reality, you’re going to be lucky to get 30/38 (city/highway). In my opinion, that’s not good enough to justify buying an extremely small two-passenger vehicle. A Honda Civic has an estimated MPG of 26/34 (23/31) and offers seating for five—though comfort is questionable.

The Smart is hip and will get some attention but I think the Civic (or some other equitable small car) is a better choice.

What’s your opinion? Would you own a Smart? If so, why?

My Dealership is Shutting Down!

I was in my local dealership today, dropping off my Rendezvous to have the brakes checked out. I was standing there and I overheard one of the service writers on the phone talking about how they were shuttering the GM department (Buick, Cadillac, GMC, and Pontiac).

The first thing I thought was, “Where the hell am I going to take my car?” Some of you are probably wondering why I’m taking my car to a dealership for service in the first place. Well, I don’t normally take it to the dealership for routine service. But, it is nice to have them available for the bigger jobs.

When they close this dealership, the closest GM location—besides the local Chevy dealership—will be in a little town about 20 miles away. This stinks because it means that the shuttle service probably won’t be available, which means I’ll have to either have someone drive up there with me or I’ll have to sit around and wait while they service my car.

I guess I’m going to have to find a local garage that I can trust. That sounds scary.

A Honda Civic With Leather Interior?

Honda Civic EX-L Leather Interior

The other day I was picking up my daughter at daycare and I noticed one of the other parents was driving a new Honda Civic. They parked next to me and as I was getting out of my car, I noticed that their Civic had leather interior. When I got home and did some research I found out that it was a Honda Civic EX-L. I think this is the first time that Honda has ever made a Civic with leather interior.

This is clearly a sign of what high gas prices are doing to the car market. Car manufacturers are trying to capitalize on American’s newfound taste for the small car and are adding luxuries like leather seats in order to give buyers some comforts that are usually reserved for bigger cars. I think this is a good move. I probably would have gone for the EX-L last year when I bought my wife her Civic but the model wasn’t yet available.

WSJ: When Buying a Gas Guzzler Makes Sense

I saw this in today’s Wall Street Journal:

The gasoline-price-induced collapse of the sport-utility-vehicle market presents a quandary for consumers. With gas at $4 a gallon, SUVs no longer make affordable commuter vehicles. But at the same time, they’ve never been cheaper.

Manufacturers are offering between $2,000 and $5,000 in discounts on once strong-selling models like the Ford Explorer and Chevrolet Suburban, and dealers say there’s plenty of negotiating room after that. Discounting is even heavier on used vehicles, with some selling at roughly one-third the price they would have fetched new four years ago.

With gas at nearly $4 a gallon (or higher in some places), saving $2,000 to $5,000 on a $40,000 to $50,000 vehicle isn’t enough. Prices for SUVs may go even lower but that also means that their resale value will also decrease. I suppose for some people, an SUV might make sense but I don’t think I would bite on this one. I’m not nearly as optimistic as this guy:

“It is the ultimate buyer’s market,” says John Casesa, managing partner at Casesa Shapiro Group LLC, a New York advisory firm that owns some dealerships.

Ultimate buyer’s market? I doubt that. Of course we should expect this guy to say such a thing since his company owns dealerships with lots of SUV inventory.

I guess my question for you is: if prices for SUVs dropped far enough, would you consider buying one?

Gas at $12 Per Gallon? This Guy’s Full of Crap!

From an article I found on Drudge Report comes this hogwash:

“[T]he prices that we’re paying at the pump today are, I think, going to be ‘the good old days,’ because others who watch this very closely forecast that we’re going to be hitting $12 and $15 per gallon,” Hirsch said. “And then, after that, when oil – world oil production goes into decline, we’re going to talk about rationing. In other words, not only are we going to be paying high prices and have considerable economic problems, but in addition to that, we’re not going to be able to get the fuel when we want it.”

I’m starting to think that these forecasters are making money by scaring the crap out of people. I realize that supply and demand play a role in all this but I still think that markets are being manipulated by all this talk.

I must say, it’s a scary thought. At $12 per gallon, it would cost me $215 to fill up our Rendezvous.