Someone please explain how this is meant to jumpstart the auto-industry and/or economy. The requirements to trade-in remove affordable vehicles from the pool of available automobiles forever. Most of the vehicles that qualify for the $3500-$4500 rebate still generate fairly high levels of debt for the purchaser (and government). Since I’m pretty sure the environmental aspects of the program are a waste of breath, I’ll just question the economic.

If this is meant to help the suffering auto-industry (ie: ours), shouldn’t American manufacturers have some qualifying vehicles people are actually interested in purchasing? It doesn’t strike me as something highly beneficial to the American auto-industry to have the government subsidizing the widening of the gap between foreign and domestic auto sales. From the outside, it looks like this is doing exactly what we do not want to be doing – generating tons of debt. The government does not have money, so every dime they put up is ultimately debt. You can call it “savings” if you want, but that requires you to ignore simple things like “definitions” of “words.” As that debt is ultimately the tax-payer’s, those that use the credits really get hit twice – once on the government books, and again with their new car payment.

If the savings are meant to come from the gas pump I’m going to have to go ahead and raise my trusty BS flag. Right now my truck gets a lovely 16mpg. I don’t drive it often, but that’s because I’d rather be on my motorcycle. Assuming I drive 300mi per week, and gas is $3 per gallon, I spend about $225 a month on fuel. Now, if I did the same thing in a vehicle that gets 30mpg, I’d spend about $120 a month. Moving vehicles is sure to save me $105 per month, right? Wrong.

My truck is 12 years old, even full coverage insurance on the vehicle is less than $100 per month. With my excellent driving record, and my freedom from the under-25yr-old-males-are-insane insurance bracket, full coverage (often required for financed vehicles) on even a new subcompact is over $200 per month. The difference in insurance premiums alone just killed all but a cheeseburger’s worth of the “savings.” We’ve not even touched on the part where my truck is paid for, and a new car comes with payments.

Let’s say that by some miracle you get a car, after the $4500 rebate, for $10,000. Then lets say they give you 0% financing for 5yrs. You’re going to pay $167 per month for five years. You’re now spending $167 per month more than you were before, fuel savings or not. Even if your insurance premiums stay dead even, the payments exceed the fuel savings by over $40.

It seems that in the last few years we’ve seen several economic sectors explode in the face of rising consumer debt (and over-extension). Is the auto-industry somehow exempt from this? If you couldn’t afford the vehicle without the $4500, can you really afford it with the money? Or is that just enough to bring your payments down to the level where eating Ramen and SPAM three times a day is still possible? Did Congress consider any of the above when they authored and passed the bill? I say all of this as one that was actually interested in the program, and was close to turning the aforementioned truck in for CARS credit. Then I did the math.