$3 billion in tax-payer money to simply dislocate demand to the left, raise prices in the used car market and screw over charities that depend on the tax write-off incentives for those donating used cars...
Now, who wouldn't be down for all that Cash for Clunkers would provide?
Well, you, apparently.
Thousands of people who leased cars last year as part of the Cash for Clunkers program are having second thoughts and are trying to get out of their leases, reports LeaseTrader.com.
The program provided up to a $4,500 rebate if a person signed at least a five-year lease for their car.
A year later, that money has long been spent and people realize they are stuck with the car for four more years, says John Sternal, LeaseTrader.com spokesman.
"I think it's Cash for Clunkers remorse," Sternal says, whose company helps hook up people who want to trade out of their leases with those looking for a lease.
Some drivers want out of the lease for financial reasons but for others it's just not wanting the car.
Sternal notes that a five-year car lease is a really bad deal for most people who usually lease a car because they want to drive the latest model.
He says it will be very difficult for Cash for Clunkers lessees to trade a lease with four or more years left on it because most traders want a shorter lease, he says.
The only other choice is to break the lease, but then the lessee must immediately pay the remaining payments, which often amounts to more than $10,000.
He says the issue in status-conscious Southern Californians is not so much about the money, but the car.
"They woke up last year and saw the Cash for Clunkers program and thought they they could help the environment and the bunnies and the trees and got smaller, environmentally-friendly cars," Sternal says. "Now they look at that car and think about the really nice car they used to have and think 'I want something roomier, more luxurious. This contract is bad and I'm not in love.'"
Priceless... Unfortunately, however, as the first paragraph above stated it is not.
This is so very reminiscent of the home-buyer credit and the HAMP programs concocted by Team O that enticed potential buyers and mortgage-holders into deals they could not possibly sustain given the economy.
Instead of staying out of the market for a while and/or accepting foreclosure terms, then renting in order to build up capital to get back into the housing market when personal fiances were in better shape, the feds dangled cheap money and the implicit promise of pain-free home-ownership to millions of Americans.
And, similarly, instead of staying in their perfectly good-operating "clunker", the American public was lured into unsustainable lease deals by the feds who dangled the double-whammy of cheap money and doing something good for the environment.
Frivolous spending of tax payer money for hopelessly distorted housing and auto markets with landfills full of used cars to show for it: is there anything else you would like accomplished with social engineering-minded Keynesian gimmickry?
What this also should represent is a toxic combination of people unwilling to make rational decisions in difficult economic times and a government all too willing to subsidize those poor decisions. Got moral hazard?
Exit question: a bailout for Cash for Clunker remorsers?
H/T: Hot Air