And MOST of the Dealers still have yet to be paid Subject: The Clunker Story Ignore all the fuel savings, etc and just look at how the car buyer got taken to the cleaners: If you traded in a clunker worth $3500, you get $4500 off for an apparent "savings" of $1000. That is, you could have gotten $3,500 if you had just traded the car in. So you just really are $1,000 ahead at this point. However, you have to pay taxes on the $4500 come April 15th (something that no auto dealer will tell you). If you are in the 30% tax bracket, you will pay $1350 on that $4500. So, rather than save $1000, you actually pay an extra $350 to the feds. In addition, you traded in a car that was most likely paid for. Now you have 4 or 5 years of payments on a car that you did not need, that was costing you less to run than the payments that you will now be making. But wait, it gets even better: you also got ripped off by the dealer. For example, every dealer in LA was selling the Ford Focus with all the goodies including A/C, auto transmission, power windows, etc for $12,500 the month before the "cash for clunkers" program started. When "cash for clunkers" came along, they stopped discounting them and instead sold them at the list price of $15,500. So, you paid $3000 more than you would have the month before. (Honda, Toyota, and Kia played the same list price game that Ford and Chevy did). So lets do the final tally here: You traded in a car worth: $3500 You got a discount of: $4500 Net so far +$1000 But you have to pay: ; $1350 in taxes on the $4500 Net so far: -$350 And you paid: $3000 more than the car was selling for the month before Net $3350 We could also add in the additional taxes (sales tax, state tax, etc.) on the extra $3000 that you paid for the car, along with the 5 years of interest on the car loan but let’s just stop here. So who actually made out on the deal? The feds collected taxes on the car along with taxes on the $4500 they "gave" you. Th e car dealers made an extra $3000 or more on every car they sold along with the kickbacks from the manufacturers and the loan companies. The manufacturers got to dump lots of cars they could not give away the month before. And the poor consumer got saddled with even more debt that they cannot afford. The government’s merry men convinced Joe consumer that he was getting $4500 in "free" money from the "government" when in fact Joe was giving away his $3500 car and paying an additional $3350 for the privilege. Yep, he is right again I know someone caught up with this same scenario. He bought a new STRIPPED DOWN CHEVY pickup truck, with hand crank windows - He paid $17,000 for this truck after all the deduction including the $4,500 for clunkers. He told me that he could buy the same truck - 4 weeks later for $12,000 - without the $4,500 cash for clinkers. I saw the same truck 4 weeks before the Cash for Clunkers for $11,000. So who really made out - your right again - the IRS My friend has a $400.00 payment for the next five years-not good, and your right again his old pick-up truck was paid for, so he had NO PAYMENTS. Who made out??? GMAC. This NEW 2009 pick-up truck scared me everything under the hood is plastic. What's going to break first? Five years is a long time, when everything is made of plastic. How many of these people are going to loose their jobs before the first year of payment How many repos will there be? OR A vehicle at 15 mpg and 12,000 miles per year uses 800 gallons a year of gasoline. A vehicle at 25 mpg and 12,000 miles per year uses 480 gallons a year. So, the average clunker transaction will reduce US gasoline consumption by 320 gallons per year. They claim 700,000 vehicles – so that's 224 million gallons / year. That equates to a bit over 5 million barrels of oil. 5 million barrels of oil is about ¼ of one day's US consumption. And, 5 million barrels of oil costs about $375 million dollars at $75/bbl. So, we all contributed to spending $3 b illion to save $375 million. How good a deal was that ??? They'll probably do a great job with health care though!!