Emperor Gillard in car clunker
WHEN it comes to cars, Julia Gillard is just like the emperor who goes strutting in public without clothes in the 1800s short story by Hans Christian Andersen.
In this case, the Prime Minister is wearing nothing despite the impressive election claims about her cash-for-clunkers scheme. The basics of the proposed car-scrap scheme look good, with a $2000 bounty on any pre-1995 gross polluter turned in for crushing in favour of a green new car. But as you drill deeper you find flaws, and then one fatal error.
It all looks simple for anyone who has a pre-’95 car in the family.
But did you know the car must have been registered and insured for two years before the trade-in deal? Or that the paperwork must match the person doing the deal?
It’s a way to ensure that no $20 wrecker’s specials are rolled out by bounty hunters.
Did you also know the cost of a new car against the valuation on a 1995 model?
The cheapest new cars are the Suzuki Alto and Proton S16 at around $12,000. But the realistic choices don’t start until $15,000.
The current valuations for a ’95 Commodore or Falcon is $2400 for an EF GLi or $3000 for a VR Executive in average condition.
But what about the success of overseas schemes? Yes, cash-for-clunkers schemes have worked well in other countries, but most have a bounty of at least $5000.
Anyone doing the sums on a clunker deal is probably assuming they get $2000 cash from Canberra in addition to their trade-in. So the numbers don’t look too bad.
But the clunker is worth zero. It will be going straight to the scrapyard. There is not a dealer in Australia who will give a dollar for the car. That means the changeover price goes way the wrong way. And don’t forget the Government is planning a $2000 bounty on cars which have a trade-in value above that figure.
That’s why Emperor Gillard is wearing no clothes.