clock menu more-arrow no yes

Filed under:

About Utah: Dealer says 'cash for clunkers' will hurt people who need most help

S.L. dealer says people who need most help won't get it

George Cassity, owner of First Class Cars on the corner of State Street and 800 South in Salt Lake City, knows someone President Barack Obama should have talked to before he launched the Cash for Clunkers program.

That would be him.

Day in and day out for the past 25 years, George has sold used cars to the American people. Many of those cars are what the government has now officially classified as "clunkers" and is paying up to $4,500 to get off the streets and destroyed.

And there goes George's inventory.

"It's hurting most the very people it should be hurting the least," says Cassity of the scheme to drive new car sales with the way-more-than-they're-worth clunker trade-ins.

"When you take 50 percent of the used-car market off the road, everything that's left is going to go up in price," says George, citing simple supply-and-demand economics. "We're talking about 40 to 50 percent of our population now being put in a position where they can't find a good used car. In a month there won't be any $3,000 cars left. They'll be $5,000 cars.

"It's insane what they're doing. Why don't they also burn down all the old, low-income houses that are out there — it's hurting the same people. And they're the people that voted Obama into office. That's who is getting killed by this."

Cassity sighs. Of course he's upset. Used cars are his business. This will leave a mark. Although he believes he'll survive the "clunker" crusade because he sells higher-end used cars as well as lower-end.

But he's not so sure about his lower-end customers, the "good people with bad credit" he sells cars to every day.

He knows they can't afford to turn the clunker he just sold them for $3,000 — at $300 down — into the government for the $4,500 and buy a new fuel-efficient green car because if they had the money to make new-car payments they wouldn't have bought the clunker from him in the first place.

"The government is helping a handful of people, and it's not those people," he says. "They're helping new car manufacturers, new car dealers and the banks that finance the new cars. They're helping the same people they just bailed out."

As for the consumers that are being helped, Cassity points out, "It's people with good credit, good jobs and good income — the very people who need help the least."

Like an avalanche, Cassity foresees that the clunker catastrophe will in turn cripple businesses that orbit in the used-car universe.

"Mechanics are going to see less business," says Cassity, noting that they're won't be as many fixer-uppers to fix up. "And body shops and paint shops and junkyards will see less business, and it will kill (car) auctions. … This could bankrupt 20 to 30 percent of the used-car business. And if they (Congress) keep adding more billions to the program, it could go to 50 percent.

"People are going to be fighting for good used cars," says Cassity, who laments that "60 to 70 percent of the cars they're destroying we could have sold. Good-running cars that get Mom and Dad to work and get kids to school."

"I could have come up with a better plan in my sleep," he complains. "How about having everyone take their 'clunkers' to a central place like, say, Liberty Park, and give them a voucher, not $4,500, maybe $2,000, and make it good for anywhere — used cars, new cars, scooters, motorcycles. Then cube (crush) the clunkers that are useless but go ahead and put the good cars back in society for society's good. I just thought that up as we were talking.

"Obama is helping more Republicans than Democrats," says the Salt Lake used-car dealer, shaking his head at the irony. "All he needed to do was call guys like me. I could have made him famous."

Lee Benson's column runs Monday, Wednesday, Friday and Sunday. Please send e-mail to benson@desnews.com