Wednesday, January 10, 2007

A Car Question

You get all sorts of complaints about how older cars are "gross polluters" that are out on the highways, contributing to the Greenhouse Effect (of course, most of the "greenhouse gases" are coming from cows in the form of methane, and you don't see them being tapped...), and generally a nusisance. Especially for older cars that are poorly maintained, but are still driven because they are the only cars somebody can afford to keep running.

My solution? On a state-by-state basis (depending upon the state, we'd have to check with them to work out the best way to do it per state), the federal government will match the Kelly Blue Book price of the car that is twenty years or older when it's being traded in-as long as there is a verifiable chain of custody to show that it's going to the junkyard. Double rates if the new car that is being bought is a hybrid.

This way, you get older cars off the road-and keep them off-and put newer cars on the road. Which will have better emissions controls, better fuel mileage, and better performance. I can't see where this would be a problem...tho somebody will complain, I promise.


YIH said...

I played out your suggestion using a car I uesd to own.
It was an '86 Nissan Sentra 4-door with A/C and Auto & CA (AM/FM radio & tilt steering wheel are standard equipment), I punched up the KBB value of the car today in the condition it was in when sold in '94 (good):$790.
If someone were actually driving that car today (unknown) it's enhanced trade-in would be $1580.
To me this sounds like a great idea that falls apart in the real world. And we don't need any more of those...

project9701 said...

Okay, so how does it fall apart? At 1.5 times for that car, it means that a person is getting $1185, double is $1580.

Assuming good credit(690-729 FICO score) and a full trade-in value, a five-year plan will cost $382/month to get a basic, bare-bones Toyota Prius. Assuming that they use Toyota's financing options-which they could, but a good bank or credit union could offer a bit better of a deal.

This, of course, doesn't assume thar our hypothetical car buyer doesn't have a bit more stashed away. Let's make it an even $2000, which $420 is the buyer's money. Same everything, it becomes $375/month.

And, if by some means our buyer can match the trade-in value, it's $354/month.

Now, if I was getting rid of my car (which would take two years, since it's an '89, but let's roll with it), I would be getting $1050 (not as good a value, but then again it's Buick). My stashing away of $2100 would mean that I'd be paying $354/month. Once again, Toyota financing and your mileage may vary.

So, where does it fall apart?