06-17-2009, 01:55 PM
Quote:Well, I don't agree.
The quality of cars is such that they last between 12 and 20 years if they are driven regularly (they last much longer if they never leave the garage). Yes, some people buy a new car every 3 to 5 years, but those used cars do not just get scrapped. The used cars are sold and bought by poorer (or smarter) people who care for them and try to get the most lifespan from them. While I certainly could buy a new car every year, I don't. I look at a vehicle as a rapidly depreciating asset, so I try to find one that has been used for 2 or 3 years. Then, I take very good care of them. I've only ever bought two new cars in my life, and only one of them was a huge mistake. It was foreign, and was very expensive to maintain. I owned it for 10 years, but it still cost me over $10K per year to own it. The other was a car my wife drove for almost 15 years, had driven it over 300,000 miles, and she wrecked it three times too. She still misses that car.
The way to affect the demand for automobiles would be to reduce the number of miles people need to drive. This can be done by the Government if they 1) required people to live closer to their work, 2) implement a massive transit system, 3) tax gasoline at much higher levels, 4) take over GM to control the quantity of vehicles produced.
In many european countries people get an incentive for bringing their old car to the junkyard. 2500 euro I believe is what people in Holland get if they trash their old car. Many people are driving around in perfectly fine cars that are worth less the 2500....so many good cars are just destroyed. This incentive helps car industry a little (but they are probably not smart enough to safe their company with it) but is capital destruction and bad for the environment. Why don't these government just directly give the money away to the car industry?? (which we by the way don't even have anymore in Holland)
Your 4 points; point 3 is the best.....only most people tend to get more aggresive when petrol prices go up a quarter then when our oil producing friends whip people or cut of their hands so it is very difficult to do this.
I think when there are two presidential candidates and one wants to invade Canada and the other wants to add a dollar to petrol prices the first one wins.