[quote author="ABC123" date=1249870806]I think this program is going to hurt Ford and other American car manufacturers the most because of the lost revenue from servicing their crappy cars. It also hurts auto mechanics and poor people who can only afford to buy crappy cars.</blockquote>
I'm in this business, so let me explain why this is flawed. There is a life cycle on repairing vehicles - in three stages.
The first stage is when a vehicle is new, and the dealer works on it almost exclusively (and rarely) because of warranty. After the warranty expires, the dealership will still get some customer pay work (non warranty repair) but most of the cars that come out of warranty never see the dealership again because the service departments (at most dealerships) are so poorly run and provide such poor value to the end customer. Sorry if the truth hurts, dealership service personal.
The second stage is when slightly older vehicles (36K+, 3 to 8 years old) show up at independent repair shops. Brakes, tires, small coolant leaks, and an occasional big repair (like a head gasket or a transmission). Even here there is a limit to what people will do. Used to be if a car fit into this category and had a repair of more than $1500, it would <em>rarely</em> get repaired, but rather, be traded in if it would move under its own power - reason being the owner didn't have $1500 to do the repair, but if he traded it in, they could get a new car <em>now</em> and with nothing out of pocket (albeit 60 or 72 or 84 months of low low payments). Since this time last year, that has stopped cold <strong>(notice the decline in auto sales)?. </strong>People still weren't doing the repairs (if they didn't have the money before, they REALLY didn't have it now) but I'm seeing it change where folks are coming up with the money <strong>because they still have to get to work somehow</strong>.
The third and last step is the end of life for these vehicles - aka the fleet of Explorers. Most 8 year old cars are worth $3000 or less. The owners are not doing a ton of maintenance on these at repair shops because 1) they don't have the money and 2) because they don't have the money they are driving these cars around till something big breaks or 3) they are dirtball cheapskates bound and determined to get every penny of value out of their car. This car will never get a major repair because it's not cost effective to put a $2000 transmission job in a car with a fair market value of $2000, and thus only very rarely see the inside of a dealership or an independent garage.
In the life cycle of the vehicle, there is a window in the second stage an independent garage can make any money repairing cars. Of course there are exceptions, but not very many.
There are more vehicles in California with active licenses than there are humans in the state. This program gets rid of a MAX 750,000 cars and trucks nationwide. Currently we sell 9.2M units a year. At the peak the industry sold more than 20M a year. There are plenty of beaters for poor people (and dirtbag cheapskates) to drive. And it sunsets on Labor Day, and won't likely ever return in our lifetimes.
<strong>edited for context</strong>
