Cash for Clunkers

[commanding]

Okay I grant that part of the idea for the cash for clunnkers is to make the air clean for everybody. But mainly it is to "stimulate the economy" and to help the automobile makers (on top of the bailout money).
So everyone that can hobble into a dealership with an auto they have owned for a year, can get a $4,500 credit toward a new auto? How is this a.) legitimate use of taxes of the entire public and b.) fair to every tax paying citizen?
My wife and I own two automobiles, both paid for in cash when we bought them, and we are perfectly happy with them right now. The way I see it the Feds owe me about $9,000 in cash, or check, which I will be looking for in the mail this week. :bash:

[wotsnext]

We have a have the same sort of thing over here in the UK,
The logic of which escapes me :roll:

[ACDC]

Sums it up !!!

http://www.cnbc.com/id/32239580

[commanding]

I should have mentioned that BOTH our autos are Fords, made in the USA, and Ford is one automaker who has not (yet) accepted stimulus money from the Feds. If the other US automakers had been making reliable, and economical to operate automobiles that would still have resale value after 5 or 6 years, perhaps they would not have had to ask for bailouts, and "cash for clunker" Federal charity, from the Taxpayers of this country. Since taxpayers are not bailing out other industries like schools, engineers, boat makers, house builders, general contractors, etc etc....why should automakers get our tax money? Grrrrrrrrrrrrrrrrrr!!!

[Jobu]

why should automakers get our tax money? Grrrrrrrrrrrrrrrrrr!!!


Because the unions were enormous contributors to Obama's campaign. Now he's paying them back, with your money.

[ACDC]

Its better than Bailout for sure......cheaper and effective !!!

http://money.cnn.com/2009/08/03/news/companies/auto_sales/index.htm?postversion=2009080311

[Dexx]

This program is actually a copy from the German stimulus program (called "Abwrackprämie") that has helped European car makers to boost their sales. It has had a huge impact. VW, for instance, would have been in the reds without this program. It helps the car makers and suppliers under difficult cirumstances not to fire employees who in return would ask for govermental help beeing jobless. Furthermore it makes the US more independent from Arab oil. The only downside is the fact that second hand cars salsmen and garages will suffer from this.

[wotsnext]

I wonder how many old British cars have been traded in for new VW's :)

[Mackie]

and Ford is one automaker who has not (yet) accepted stimulus money from the Feds.

By 2010 Ford will have 40bn dollar debts even with the recent program while GM and Chrysler restart their business. At the end, Ford will not be the good one. Ford is only facing bankruptcy later.

[Mastermind]

I will never buy a Government Motors car or a Chrysler Government subsidized car...I will, on my word, only buy from a manufacturer that is not openly slave to the Government bond holders and the Democrats who are wholly owned subsidiaries of Global Warming Gore-Bot Lunatics Inc.

Thus, my next cars, for the rest of my life, will be Fords.

[Mackie]

Thus, my next cars, for the rest of my life, will be Fords.

And if Ford get subsidies? Toyota? p-)

[Chulo]

1 Billion set aside for this program- they "ran out" of money in about a 3 days, and less than 1/5th of that money spent on actual cars, and with the majority spent on mismanagement and misuse.
And you would trust them for what?

[Power_serj]

Of course Congress is justified in increasing the deficit and spending tax money so that the auto industry can make a lot of money.

[Evolv5]

Comparing this to the German Abwrackprämie ... are you forced to buy an American made car? Are you forced to buy a more environmentally friendly car?

Because, in the German version, plenty of people but non German cars, essentially funding other nations auto-industry, as well as letting perfectly functioning cars being scrapped (thus lack of the environmental benefit).

[Fat Lazy American]

Comparing this to the German Abwrackprämie ... are you forced to buy an American made car? Are you forced to buy a more environmentally friendly car?


No, yes. (Or, relatively. You don't have to buy a Prius.*)

Cash for Clunkers is considered a successful program because the economic stimulative effect is far exceeding the amount of money being input into the program.

If you're against any and all economic stimulus program in a recession, then you're still going to be opposed to Cash for Clunkers. If you recognize that stimulus can be a valuable tool to mitigate the effects of a massive downturn in the economy, then a program that has a very big multiplier in terms of the amount of money that actually enters the economy is a good thing -- not to mention the pretty decent chunk of change entertaining state government coffers.

And yes, when people use it to buy foreign cars, the multiplier effect is much smaller. But protectionism is currently considered a big no-no in this country (and most of this world.)

*God I hate those commercials. I keep hoping the Prius runs off the road and crushes dozens of little children in creepy costumes.

[Fade]

Administration: 'Clunkers' improving gas mileage
Aug 3 01:42 PM US/Eastern
By KEN THOMAS
Associated Press Writer

http://i27.tinypic.com/2mheyog.jpg (http://www.militaryphotos.net/forums/member.php?u=2161)

WASHINGTON (AP) - The Obama administration appealed to the Senate on Monday to bail out the cash for clunkers rebate program, arguing it has already made striking gains in fuel efficiency and is a "wildly popular" economic boost. Transportation Secretary Ray LaHood ducked when asked if the program will be suspended if the Senate does not vote to replenish coffers before lawmakers go on vacation later this week. Instead, he said "I believe the Senate will pass it this week."

The administration said the average fuel economy of new vehicles purchased through the program is nearly 10 miles per gallon higher than for the vehicles traded in for scrap. LaHood said some 80 percent of the traded-in vehicles are pickups or SUVs, meaning many gas-guzzlers are being taken off the road, and the Ford Focus is a leading replacement vehicle.
"The program is working the way Congress intended it to work," he asserted on MSNBC. But it was not intended to run out of money nearly so quickly, nor create such confusion at dealerships.
The administration pressed hard for an additional $2 billion after serving notice over the weekend that the program could expire as early as this week unless the Senate acts, as the House did in voting overwhelmingly for the money Friday.Article continued at http://www.breitbart.com/article.php?id=D99RI30O0&show_article=1&catnum=0

[WebMoskal]

Dealers made ok money on the used cars, now used car market will be dead. What's the point

[Elbs]

More money for the automakers who can't run a damn business and the unions that drove them into the ground. It's gggggggrrrrrrrrrrreat!

[Violet Fashion by Mindy]

So it's unions fault for producing unreliable, fuel thirsty cars nobody wants to buy?

[Ritual]

Yeah those commercials are really creepy, I just see a woman and her "partner" in SF dreaming that **** up with the monkey/sun flower children having an orgy around the prius. (All in a fit of eco-ecstasy.) :|

I'll keep my 6.6L 13mpg monstrosity!

Responsible, I know. p-)

[Elbs]

So it's unions fault for producing unreliable, fuel thirsty cars nobody wants to buy?

Not all American cars are pieces of crap like Europeans would have you believe. We've owned two Fords and one Chevrolet, all with over 200,000 miles while our last Ford has well in excess of 255,000 and counting. They've all needed just basic maintenance, while our beloved E320 has had electrical problems, clutch and engine trouble after 100K on the clock.

The union deals that have burdened GM with legacy costs are what has been killing the company. One tenth of all cars sold in the US go towards paying the legacy costs. With things like this driving up the price of cars, there is no way GM can be competitive.

[Elbs]

Yeah those commercials are really creepy, I just see a woman and her "partner" in SF dreaming that **** up with the monkey/sun flower children having an orgy around the prius. (All in a fit of eco-ecstasy.) :|

I'll keep my 6.6L 13mpg monstrosity!



I hate the Prius with a passion. Cars are supposed to look like they were designed with aesthetics in mind.

[Lazuris]

The irony of the whole program is that it is doing nothing more than creating a new round of unsustainible debtors. People that own "clunkers" tend to have less disposible income. However, the clunker is normally "paid for" due to its age. Now these people have new vechicles with new payments. In an interview this morning on CNBC the anchor interviewed a car dealer who stated that "most of the people that buy these new cars are not normally new car buyers" and he also said that "they are using creative ways to reach the financing needed".

My bet is that once again the government will create its own problem. These people will fail paying their new payment and as a result a massive increase in used cars will enter the market and further bog down the overall market.

[SoftLion]

1 Billion set aside for this program- they "ran out" of money in about a 3 days, and less than 1/5th of that money spent on actual cars, and with the majority spent on mismanagement and misuse.
And you would trust them for what?

Indeed - raise the stakes to 1.5 - 2 trillion, with more bureaucracy and difficult oversight issues, ram it through the filibuster proof Congress, and call it a day - Health Care solved!

Then fast forward to 2020 when $1 won't buy you a bazooka joe bubble gum. Spend away, boys and girls.

[SoftLion]

The irony of the whole program is that it is doing nothing more than creating a new round of unsustainible debtors. People that own "clunkers" tend to have less disposible income. However, the clunker is normally "paid for" due to its age. Now these people have new vechicles with new payments. In an interview this morning on CNBC the anchor interviewed a car dealer who stated that "most of the people that buy these new cars are not normally new car buyers" and he also said that "they are using creative ways to reach the financing needed".

My bet is that once again the government will create its own problem. These people will fail paying their new payment and as a result a massive increase in used cars will enter the market and further bog down the overall market.

Good point, and is analogous to the 10%/$8,000 first-time homebuyer's credit they are attempting to make available at time of close. Great idea: you couldn't afford the house before, but now we will give you the down payment so you can afford the purchase initially, but then go into foreclosure 4 years down the road instead of 3. Makes perfect sense.

While they're at it, how about a first time 911 Carerra S credit? I will exploit said credit and stimulate the local law enforcement, club racing events, and tire dealers.

[Flagg]

Having a bit of an insider's viewpoint on the auto industry, and having just completed a tiki tour of selected dealer ops in the US, cash for clunkers is only INDIRECTLY beneficial for US automakers.

It is DIRECTLY beneficial for US dealerships.

US Dealers were sitting on record amounts of unmoving inventory........crushing their balance sheets....and putting many in jeopardy of collapse....further magnifying the problem.

There's lots of folks employed making cars, there's even more employed SELLING cars.

The manufacturers do not have the funds to pull forward anymore sales like they did in 05, 06, and 07 with "friends & family" discounts that used to be worth something now applying to anyone with a pulse...they ran out of tricks.

So now they are relying on Uncle Sam's pocket book.

The FACT is, in the vast majority of cases, people could easily keep their existing vehicles on the road for another 5 years...only in the minority of cases is a vehicle upgrade truly required.

Consumer behavior has been changed by manufacturer marketing stupidity as well as armageddon sized financial stupidity...it's all related.

"Cash for clunkers" is a box of glazed Krispy Kreme for a fat man in need of a heart transplant.

It buys a tiny bit of time, but doesn't even come close to solving the problem.

[Flagg]

I hate the Prius with a passion. Cars are supposed to look like they were designed with aesthetics in mind.

I'm a car guy to the core.

But I also keep a close eye on "bang for buck".

My wife's 2nd hand Prius is still easily worth what we paid for it, you put petrol in it and it goes, occasionally it needs to have an oil change.

It is easy to park, has great safety features, and gets insanely good fuel economy.

It also gets a hell of a lot less nasty looks than the more ostentatious car it replaced.

Is it fun to drive? hardly......but it's a very well built and practical car.

While I agree it maybe should have been called the Generica, it saves us heaps of money that can be spent on things we are far more passionate about since Ferrari lacks a People Mover.

[Yeti2424]

The American Republic will endure, until the politicians realize they can bribe the people with their own money...
-Alexis de Tocqueville


Figure it applies here.

[Violet Fashion by Mindy]

Not all American cars are pieces of crap like Europeans would have you believe. We've owned two Fords and one Chevrolet, all with over 200,000 miles while our last Ford has well in excess of 255,000 and counting. They've all needed just basic maintenance, while our beloved E320 has had electrical problems, clutch and engine trouble after 100K on the clock.

The union deals that have burdened GM with legacy costs are what has been killing the company. One tenth of all cars sold in the US go towards paying the legacy costs. With things like this driving up the price of cars, there is no way GM can be competitive.

Even without the legacy costs I highly doubt the US manufacturers would remain competitive. Fact is they have less market share then what they had 20 years ago. Let alone 30-40 years ago.

So they change their business model for SUV's so they have a cash cow when the economy is booming. Economy takes a major dump, nobody is buying SUV's, fuel prices are sky high bang there goes the business.

It's got nothing to with unions bleeding companies dry. Yes some deals companies made with the union have not helped but even without these deals what has happened to GM and Chrysler in the past 6 months may have been delayed by 6 months but it still would have happened.

[Elbs]

Even without the legacy costs I highly doubt the US manufacturers would remain competitive. Fact is they have less market share then what they had 20 years ago. Let alone 30-40 years ago.

So they change their business model for SUV's so they have a cash cow when the economy is booming. Economy takes a major dump, nobody is buying SUV's, fuel prices are sky high bang there goes the business.

It's got nothing to with unions bleeding companies dry. Yes some deals companies made with the union have not helped but even without these deals what has happened to GM and Chrysler in the past 6 months may have been delayed by 6 months but it still would have happened.

GM still has $1,600 added to the price of every car they build due to these costs. It's not something that is easily ignored.

You're right about the SUV craze. It was ridiculous. Unless you have a big family to move around or use it for off-roading or camping, I don't see why you need an Expedition or Navigator to drive to the local Walmart and back home by yourself.

IMO part of the reason why American cars haven't been selling as well is that many models are simply sh*t. There are only a handful of US built cars that I would buy had I the money to purchase a European equivalent.

[Ritual]

If you want bang for your buck, 1994 Oldsmobile Ciera. 28mpg highway, paid $2,000 for it. (White sands and back home).

Everything works, only maintinance in 3 years has been oil and trans fluid change and a new belt. At 120,000+ miles.

Dirt cheap / Runs fine.

Sure won't get you laid, but what impact does building 1 prius have compared to what was involved in building and maintaining a semi-econobox?

[Universal_Soldier]

UAW is the death of all autocomapnies that's why Toyota is closing NUMMI plant because it's serviced by UAW. Those guys need to go away. I believe workers rights need to be defended, but UAW is the worst medium to do so.

[seer]

better than giving billions to bank execs for bonuses.

[Nightsky]

better than giving billions to bank execs for bonuses.

True that.

[Ordie]

I use public transit.

I want cash for my clunky washer and dryer rather than a car.

The one's that are going to get hurt are charities that depend on auto donations and auto parts dealers.

And poor people that will miss out on the clunkers as they will end up in the junk yard.

[Ordie]

UAW is the death of all autocomapnies that's why Toyota is closing NUMMI plant because it's serviced by UAW. Those guys need to go away. I believe workers rights need to be defended, but UAW is the worst medium to do so.

Actually NUMMI UAW workers in Fremont are have 4 job classifications as opposed to 100+ at a typical GM plant.

The UAW workers in California are the exception rather than the norm.

GM output at NUMMI was 20% with the Pontiac Vibe. So Toyota is stuck holding the rest.

[c62]

Okay I grant that part of the idea for the cash for clunnkers is to make the air clean for everybody. But mainly it is to "stimulate the economy" and to help the automobile makers (on top of the bailout money).
So everyone that can hobble into a dealership with an auto they have owned for a year, can get a $4,500 credit toward a new auto? How is this a.) legitimate use of taxes of the entire public and b.) fair to every tax paying citizen?
My wife and I own two automobiles, both paid for in cash when we bought them, and we are perfectly happy with them right now. The way I see it the Feds owe me about $9,000 in cash, or check, which I will be looking for in the mail this week. :bash:Sorry the government ran out of money..... Health Care Reform Anyone?

[31C]

I skimmed over the three pages...did someone rant yet about how they have to pay (taxes) for thousands to buy new cars while they are stuck driving a POS? If not allow me to be the first....

[Ordie]

I skimmed over the three pages...did someone rant yet about how they have to pay (taxes) for thousands to buy new cars while they are stuck driving a POS? If not allow me to be the first....

A co-worker traded in his clunker he bought for $500 during college and got a $7,000 rebate (Cash for clunker + clearence sale).

Not a bad deal.

[Will Clark]

So it's unions fault for producing unreliable, fuel thirsty cars nobody wants to buy?

Yeah, pretty much. US Manufacturers are capable of producing high quality stuff, they just can't because when you factor in legacy and union costs that foreign manufacturers don't have to pay, they'd price themselves out of the market by thousands of dollars if they tried to produce the same quality product.

[RxOnco]

Most people that have the money, probably would have ended up buying a new vehicle anyway. This leaves us with those who don't have the money. More often than not, someone that is driving a "clunker" is doing so becuase they don't want, or can't afford, an added expense for a car payment. This will eventually blow up into another mortgage-like crisis where we have thousands defaulting on the auto loans. I'm sure we'll be there to bail their collective arses out then too.

I can see other crap coming down the pipeline eventually. Cash for your "clunker" TV, your fridge, your washer/dryer, your furniture, etc... Where's it all going to end? I guess we'll just keep handing out money until the Chi-Coms decide to quit loaning it to us.

[31C]

A co-worker traded in his clunker he bought for $500 during college and got a $7,000 rebate (Cash for clunker + clearence sale).

Not a bad deal.

Ur right...it's not a bad deal, for him.

But I suppose as everyone has said, the taxes had to go somewhere. Part of me wishes it would have gone to the rich bank execs, I'm jealous of average joes getting to take advantage of the governments spending while I am stuck driving a crappy car.

I still stand by my statement that the money could have been spent on better things then helping the car industry (again).

[deadtired]

All I know is, I'm gonna be pissed if this kills the used truck market in the next 6 months or so. I'm saving for a 4x4 right now, and I can't afford to buy new.

[shocker1]

So here we are setting up another wave of irresponsible buying by consumers. Another round of government subsidized financing concentrating financial activity into another bubble.

The additional costs of financing and full coverage insurance which is required by most lenders will in the end make the long term effect a negative. People are irresponsible when carrots are dangled in front of them. Two years or less from now when inflation eats up what little wiggle room they had. The car will be taken away on a hook.

The used car business is being effected but I do not see a long term negative for that end of the business. The flood of new cars will create a new crop of repos filling the auctions. Improving the used car fleet but at the same time drastically increasing the prices. A friend of mine routinely is forced in auctions to buy many more cars than he needs as dealers auction blocks of cars. He will have to absorb this wave of cars as well passing on the cost to the low incomes he serves. Two years from now the same idiots getting the clunker dough will be at the Used Car Lot, because they could not afford the payments and full coverage insurance as well as the more expensive registration for a new car. Looking for the buy here pay here deal that I love to see.

The repair business will in the short run see ups and downs but that will only be effected in terms of price and availability of used parts. Which I do not use in my shop anyway. However the low end of the income level will be greatly effected as repair cost will increase, regulatory costs are going to increase over time as well because government will price those older cars off the road.

So what benefit does all this have? Well the average person who wants a new car has an opportunity to get some of their tax money back, steel, aluminum, recycling, coal, and all the big dirty industries will also benefit as they crank up the replace the destroyed percentage of the automotive fleet. Politicians have a talking point and a liability. Myself I would rather give the government less of my money and be less influential in my life.

That is the root ideological rub we have today. All else revolves around how much centralized governmental control you want and what aspects of life belong to it.

[Mr Gently Benevolent]

Auto Plan Probably Boosted Retail Sales: U.S. Economy Preview

By Bob Willis

Aug. 9 (Bloomberg) -- The Obama administration’s cash-for- clunkers plan probably gave auto dealers a boost in July, while other retailers struggled to lure customers constrained by ongoing job losses, economists said before reports this week.

Total purchases climbed 0.7 percent, the most in six months, according to the median of 54 estimates in a Bloomberg News survey ahead of Commerce Department figures due Aug. 11. Excluding autos, retail sales probably rose just 0.1 percent.

“This is a cash-for-clunkers story, but consumers are still not looking great,” said Carl Riccadonna, an economist at Deutsche Bank Securities Inc. in New York. “Consumers have been hit hard not only by the labor market, but also by destruction of their balance sheets.”

Households may limit spending and increase savings for years to come to repair the damage done by a record $13.9 trillion loss in wealth as home prices and stocks plunged last year. Other reports may show manufacturing picked up and inflation abated, and Federal Reserve policy makers are expected to maintain a steady course when they meet this week.

Industry data showed sales of cars and light trucks rose to an 11.2 million annual unit pace in July, the highest since September, after the government offered credits of as much as $4,500 to trade in gas-guzzlers for more fuel-efficient vehicles. Some think it may be working in a small way but the overall picture does not look good.

[deagle]

i say, extend it to everyone, so everyone can get a new car. ppl win, dealers win. (in theory).