The Cash for Clunkers program ended Monday with dealers buried under mounds of paperwork, struggling to get needed documentation to buyers in the 30-day time period before all hell breaks loose.

That cushy $4,500 rebate had a lot of strings attached. The messy oil slick from this ill-planned program begins to float to the surface when looking at the direct ramifications to cow-towing to the environmentalists who fueled the program. In concept, Cash for Clunkers might have seemed reasonable. In reality, the program smacked small business owners, independent repair shops and the buyers right upside the head.

• Buyers will be taxed twice, in some cases. Sales tax applies to the full cost of the vehicle before the rebate and then again if the powers that be decide to tax the rebate as income on tax returns. Whether this will only be at the state level is unknown.
• An IRS bulletin suggests the consumer won't be taxed but the dealers will. Quite a conundrum. Who to tax and how many times? Why on earth would the dealer's participate in a program that gives them headaches, puts them financially in the red AND makes them pay taxes? Can you say...stimulus payments???
• Some states have decided to make the sales tax paid on new vehicles tax deductible this year. Way to bail out the President!

Who loses...

For anyone who simply drives a car, puts gas in said vehicle and only retains a car for 4 years, this might make no sense. However, there's a host of small businesses that have been impacted by the program. Cars.gov (official site of the Clunker program) estimates that 700,000 "clunkers" were taken off the road. The definition of a clunker is sketchy at best.

You could trade in a clunker for a new vehicle if the fuel mileage was anywhere from 2 to 10 mpg higher, depending on the type of vehicle. This included light trucks as well. Higher fuel efficiency vehicles were removed from the road with additives dumped into the fuel tanks to cause engine seizure. Get 'em off the road and into the junk heap as fast as possible, without regard for the trickle down effect.

Anyone who's ever had an engine replacement on a vehicle knows the cost begins at around $3000. Some people choose to buy a new car while others accept this cost as a one time maintenance charge to avoid a new car payment. Cash for Clunkers took 700,000 vehicles off the road. That's 700,000 engines, 700,000 cars worth of affordable parts for consumers to repair existing vehicles. In addition, those vehicles were running - why not sell them overseas? Because the law says these vehicles can't be sold in the U.S. or any other country.

The Obama Administration basically blew their noses with $100 bills. The insanity astounds me.

So we have independent automotive shops who don't have access to thousands of parts because of Cash for Clunkers. We have junk yards and used-car parts companies who have lost potential inventory. And we have consumers who will be forced to buy brand new automotive parts when used parts who have sufficed.

Seems like the only folks who made any money in this program was the scrap dealers. Yes, they paid the dealers for the junked vehicles but in the end, there's simply a big pile of metal. Where's the hue and cry from the environmentalists now that they helped add 700,000 vehicles to the scrap metal yards?

Oh yea...the cars are being recycled....right...

Cash for Clunker law: http://www.cars.gov/files/official-information/law.pdf

One other consideration: we have thousands (if not more) of individuals defaulting on mortgage loans throughout this country. It's pretty safe to assume a good number of the new vehicles purchased with clunker rebates were financed. Wonder if we'll see an influx of repossessed cars beginning in a few months? I wouldn't be surprised...