Commentary Magazine


Contentions

“Let Them Ride the Bus!”

The House of Representatives has passed a bill they call the “Cash For Clunkers” bill, which will give people who trade in older vehicles that get poor gas mileage up to $4,500 toward a new car purchase. The idea is to get vehicles that use a lot of gas off the road — as part of the bill, the dealer who accepts the old vehicle has to destroy it.

It seems like a good idea, and like most federal laws inspired by “good ideas” and “good intentions,” it’s likely going to come with strings attached.

The major problem is that it is going to pretty much destroy the cheap car market in America.

There are a lot of people who simply can’t afford to spend a lot on a vehicle. Take me, for one. I drive an SUV made in the last century that I picked up for around $2,000. It gets mediocre mileage, but that works out OK for me — I don’t drive a lot, but I prefer the security of the all-wheel drive for New Hampshire winters. I wince whenever I visit the gas pump, but I find the trade-off worthwhile.

If you want to know just how the bill will affect the used-car market, head on over to Craig’s List, click on your city or state, choose “cars+trucks,” then search for vehicles for $4,500 or less. In New Hampshire alone, the list of such vehicles posted just today was around 200.

There is definitely a market for such vehicles. And it is a market made up of people who often don’t have a viable alternative, such as public transportation.

And it isn’t just the “clunkers” that will be taken off the road. The indirect effect of this bill will be to artificially inflate the value of all used cars — owners will find themselves asking “do I want to try to sell this perfectly-good car for at least $5,000 to someone who needs it, or should I let it get destroyed for a $4,500 credit?” Many will find the time and hassle in selling it simply not worth the additional money.

In essence, the bill will boost the minimum value of many used cars to $4,500 — out of the reach of many people in need of transportation.

But that won’t matter. We’ll have gotten a bunch of “gas guzzlers” off the road, preventing them from consuming valuable resources and polluting our air.

As for the poor… “get a horse!”


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