Cash for Clunkers

Parent Cafe
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<p><<the car=“” i=“” drive=“” daily=“” (a=“” 1966=“” mustang)=“”>></the></p>

<p>You and I both know it was going to take MUCH MUCH more than $4500 to separate you from that mustang :-)</p>

<p>These ARE STUPID RULES that don’t address the problem in a ‘fair way’
<a href=“http://www.cars.gov/faq[/url]”>http://www.cars.gov/faq&lt;/a&gt;&lt;/p&gt;

<p>have a “new” combined city/highway fuel economy of 18 miles per gallon or less (this is the deal breaker for MANY people). Why shouldn’t my car that is nearly 20 years old with no air bags qualify. </p>

<p>rules for passenger cars: If the new vehicle has a combined fuel economy that is at least 4, but less than 10, miles per gallon higher than the traded-in vehicle, the credit is $3,500. If the new vehicle has a combined fuel economy value that is at least 10 miles per gallon higher than the traded-in vehicle, the credit is $4,500.</p>

<p>rules for new van, pickup truck or SUV: The value of the credit given for the purchase or lease of a category 1 or 2 truck also generally depends on the difference between the combined fuel economy of the vehicle that is traded in and that of the new vehicle that is purchased or leased. If the new vehicle is a category 1 truck that has a combined fuel economy value that is at least 2, but less than 5, miles per gallon higher than the traded-in vehicle, the credit is $3,500. If the new category 1 truck has a combined fuel economy value that is at least 5 miles per gallon higher than the traded-in vehicle, the credit is $4,500.</p>

<p>If both the new vehicle and the traded-in vehicle are category 2 trucks and the combined fuel economy value of the new vehicle is at least 1, but less than 2, miles per gallon higher than the combined fuel economy value of the traded in vehicle, the credit is $3,500. If both the new vehicle and the traded-in vehicle are category 2 trucks and the combined fuel economy of the new vehicle is at least 2 miles per gallon higher than that of the traded-in vehicle, the credit is $4,500. A $3,500 credit applies to the purchase or lease of a category 2 truck if the trade-in vehicle is a category 3 (work) truck that was manufactured not later than model year 2001, but not earlier than 25 years before the date of the trade in.</p>

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<p>

That’s $3500 taxpayer dollars for 1 mpg. That’s just a real good use of our dollars.</p>

<p>At least I had the foresight to purchase a 98 Durango that will qualify me for the dough if I decide to take advantage of this thing.</p>

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<p>As a budget analyst, this program deeply offends me. Who the H*LL came up with these parameters. Ooh, I bet it looked good on the powerpoint demonstration when they were ‘selling the idea’.</p>

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<p>^ Yeah, but on average people are bringing in vehicles that get around 15 or 16 mpg and buying vehicles that average 25 or 26 mpg, a mileage boost of around 60% (plus or minus, depending on whose estimates you believe). And there’s not only the immediate mileage boost: the program is taking those high-emissions vehicles out of circulation permanently. Typically, a new car purchase keeps the old car in circulation, most often as a trade-in that the dealer buys and refurbishes (or sells to someone else to refurbish) before it ends up on a used car lot. The typical trade-in goes through several more owners before it simply dies and is crushed for scrap. On average, cars stay on the road for about 17 years. A few vehicles being traded in under Cash for Clunkers are that old (some even older), but most are newer and would have been around for quite a few years yet, being driven by other owners.</p>

<p>Still, I don’t think the environmental benefits are sufficient to justify the program. It’s mainly an economic stimulus bill, leveraging an additional $10K to $25K in private spending for every $3500 or $4500 the government spends. For that purpose, it seems to be working fairly well at a time when consumer spending has been very slow, operating as a drag on the entire economy.</p>

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<p>I could easily go from 23 to 35 average MPG if my car qualified (a 50% increase). I deserve the same benefit. And I would be getting a SAFER car with airbags, but I guess the govt doesn’t car if my clunker isn’t the safest car on the road when someone who is texting when driving hits me someday…</p>

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<p>Apparently you don’t deserve the same benefit. They made a decision and did it fast and fairly efficiently. I’m sure htere was some behind the scenes horse-trading on some of the rules but the idea was to get something DONE and not argue about perfecting the plan until 2011,. So I say hats off to the Obama administration for getting a major federal program up and running in record time. I had no cars that would qualify either since I bought two pretty fuel efficient Toyotas in the last 3 years. But I’m not crying about. At least the salesmen I know at my dealer are now making enough to pay their mortgages for a few months.</p>

27

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The program is definitely up, but not running. This is bad planning all around. Look how frustrated everyone is about this program. A local dealer said on the news he couldn’t get a single car into the system. </p>

<p>

Not to be disagreeable, but it’s shown that it’s more efficient if you go from 18 to 22 than from 23-27.<br>
Assuming one drives 12000 miles/year.
18-22 - 666 gallons/year to 545 gallons/year - 121 gallons/year difference
23-27 - 521 gallons/year to 444 gallons/year - 77 gallons/year difference</p>

<p>I think the best way is to set a standard # of gallons improvement/year. So if you need to save at least 120 gallons/year, for a 23mpg clunker, the new car must be at least 30mpg.
For some crazy 30 mpg clunker, the new car must be at least 43mpg.<br>
Make sense?</p>

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<p>Really? Dealers around here are ecstatic about it. Minnesota ranked #4 among states in numbers of Cash-for-Clunkers deals in the first round, despite ranking #21 in state population. And consumers walking away with a $4500 discount on a new car—often on top of other manufacturer and dealer discounts and in some cases 0% financing—seem pretty happy, too. If your local dealer couldn’t make it work, I’d attribute it to his own ineptitude because these deals are going like hotcakes in the rest of the country.</p>

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<p>Well, so far over 300,000 sales have been entered into the system and the payment problems have been ironed out. For a program that is officially only two weeks old that’s not bad. Most new payroll systems I have been on had major problems the first months.</p>

<p><a href=“http://www.autonews.com/article/20090812/ANA05/908129979/1078[/url]”>http://www.autonews.com/article/20090812/ANA05/908129979/1078&lt;/a&gt;&lt;/p&gt;

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<p><<not to=“” be=“” disagreeable,=“” but=“” it’s=“” shown=“” that=“” more=“” efficient=“” if=“” you=“” go=“” from=“” 18=“” 22=“” than=“” 23-27=“”>></not></p>

<p>I realize that it’s a percentage gain rather than a MPG gain that they are after.</p>

<p>the people bought smart to begin with (efficient cars) have to bail out the ones that didn’t (SUV/trucks). </p>

<p>Oh let me reward you for buying that Explorer 10 years ago…</p>

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<p>^^ I agree with your point. No matter how one does the math, doing a trade that improves the mpg from 16 to 18 is much less of an improvement than from, for example, 18 to 40 yet the former could qualify and the latter not.</p>

<p>But I’m sure ‘Barrons’ is right in that there were negotiations taking place during all of this. I disagree however that it’s a good use of taxpayer money but I already spouted from my soapbox about this on the other thread.</p>

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<p>Daughters 1994 clunker was rated at avg.13 mpg. She bought a new Toyota Rav4 rated at avg. 24 mpg. for a total of $5000 off. Safer in some ways and with a good resale value if she so chooses. Also gets new car tax deduction at the end of this year. </p>

<p>So she starts off with a much nicer car than she could have otherwise.</p>

<p>However she now has a $300 month car payment (much of which she saves in gas). She will not have the extra cash for the other things she used to buy.</p>

<p>I am happy we got to benefit. I was pretty tired of having to be the one to give all the time to all those who screwed up so badly. I only wish one of my kids was in the position to be a first time home buyer (another $8000). Oh well.</p>

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<p>

Of course they are. They can start charging MSRP + dealer addons for this program.<br>
Plus, a lot of dealers don’t allow consumers to drive away with the new car until the paperwork is approved, which took more than 2 weeks.<br>
edmunds said there are plenty of people waiting for their new cars, which still sit at the lot. It’s frustration all around.

I agree with you on this, that’s why I propose the model in #27. Everyone can participate. This is America, everyone has the right to life, liberty, and a new fuel efficient car.</p>

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<p>I haven’t heard of anyone paying full MSRP for a car under Cash-for-Clunkers around here, much less dealer mark-ups which are illegal under the program. Most manufacturers have incentive programs already in place, and many dealers are offering their own discounts on top of that. Getting a triple discount—$3500 or $4500 from the government, plus manufacturer incentives, plus dealer discounts means people are walking away with terrific bargains. It’s pulling people into the showrooms, dealers are moving inventory (unsold inventory being a huge drain on their profit margins, all cost and no revenue), and even people who end up not qualifying are showing up in dealer showrooms and in some cases buying. If dealers in your community are bungling it by trying to charge marked-up prices or withholding delivery of vehicles until the paperwork clears, that’s their problem and their doing, not the government’s. We’re just not facing that problem here, which is why Minnesota currently stands at #1 in the nation in per-capita Cash-for-Clunkers transactions.</p>

<p>[‘Clunkers</a>’ program salvaging a bad year for car dealers | Minnesota Public Radio NewsQ](<a href=“http://minnesota.publicradio.org/display/web/2009/08/07/clunkers-dealers/]'Clunkers”>'Clunkers' program salvaging a bad year for car dealers | MPR News)</p>

<p>[‘Cash</a> for clunkers’ program doing well in snowy states - cleveland.com](<a href=“http://www.cleveland.com/business/index.ssf/2009/08/cash_for_clunkers_program_doin.html]'Cash”>'Cash for clunkers' program doing well in snowy states - cleveland.com)</p>

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<p>^^^ yes, but some of us drive very little because we don’t trust our old cars to go hundreds of miles from home. The most I have driven in the past 5 years has been 2500 miles per year, and rarely more than 25 miles from home. If I could have gotten a new car for about $11000, I would have kept it for the next 15+ years.</p>

<p>As it stands, I will end up buying a 3-5 year old car (corolla ?) for hopefully about 8K and less than 50K miles and I will end up keeping it for 10 years or more. I’m sure my new car will be more efficient and safer and give me at least the illusion of reliability more than my 1991 civic does (but it does keep on running!)</p>

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<p>

priuschat, edmunds - plenty of members report MSRP + dealer add ons. it’s illegal for dealers to remove manufacturer rebate, but it’s not illegal for them to add “protection” package or whatever.<br>
Also, plenty of people who haggled the price first, then showed up with a clunkers were turned away. They said haggled price is for non-clunkers. For clunker trade in, the price would be substantially higher.</p>

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<p>^ OK, fine. I’m glad the dealers in your area are blowing this opportunity, because it means more of those federal dollars will be spent in Minnesota, and more consumer dollars will be leveraged into circulation in our local economy, not yours. This is a great deal for us. We usually get the short end of the stick on federal spending, contributing far more in taxes than we get back. In a small way, Cash-for-Clunkers lets us make up for that. Consumers here are happy, dealers are happy, the local economy will feel spin-off benefits from more money in circulation. Look, the money is on the table and it’s being spent at a rapid rate; deals are being made. Dealers can get a piece of it or not. The short-sighted dealers in your area are apparently happy to leave that money on the table for someone else (us) to gobble up. I can hardly complain about that.</p>

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<p>just heard from the mechanic, my car, which is not eligible for this program is getting an oil change, new CV boot and all new belts. So instead of buying a 10K+ car, I’m paying ~$350 to the mechanic. At least my car will be on the road, more reliable than before and I know who’s getting my money, the guys who keep it running all these years…</p>

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<p>Sue: I feel for you…i am in the same boat with a 94 Lumina that does not qualify because it supposedly gets 20 mpg. another 94 Lumina with different engine will qualify.
So we will drive this car until it stops and need to buy another used vehicle. It was nice to dream that we could benefit from this program though…</p>

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<p>Most people who drive old clunkers that really need to be gotten off the road cannot afford to buy a NEW car, any new car, even with a discount. I wish you could trade in on used cars. (I realize this doesn’t help the manufacturers). Or how about this: I turn in my clunker and DON’T buy another car because I don’t drive much and H and I can share. . .I’d like a check for $4,500 for getting my clunker off the road.</p>

<p>I briefly considered trading in my large (12-15mpg) van, but I don’t want to spend $$ for a NEW one. I wouldn’t save much in gas because I don’t drive much. The insurance on my old van is dirt cheap. So I’ll just keep my clunker.</p>