Cash For Clunkers - This is what happens.

[YSSMAN]

Well, they get money too. Just not as much. As long as their car was made after MY1984, and gets at least a 4 MPG increase, they get the $3500. Jack Lessenberry had a good piece on CARS earlier today:

So let me get this straight. People are attacking the Cash for Clunkers bill because it worked. I’m not quite sure I understand.

True, it seemed to work a little faster than was expected, but it got hordes of people to buy cars, Which I thought was the point. The economy is bad overall, and worse still in the automotive industry, which has been in the equivalent of a deep depression.

So to try and stimulate sales, and the economy with it, the government said, look. If you trade in a car for one that gets better mileage, we’ll give you money. You get $3,500 if your car gets at least five miles per gallon more than the old one.

Boost the increase to 10 miles per gallon, and the government will give you $4,500. There is a catch or two. First of all, that’s all you get; if you sell your used car to the dealer for more, you can’t get the rebate on top of that. And the dealer has to junk the car.

You can’t get the money if your old car goes back on the road. By the way, the so-called clunker you trade in can’t be more than a quarter-century old, meaning it had to have been made after 1984.

Initially, I was dubious about this program. People haven’t been in a buying mood. Plus, I thought that many of the so-called clunkers would still be worth more as trade-ins. But it is clear that thousands of people were willing and eager to line up to turn in their old chariot.

Unfortunately, the federal bureaucracy that was hastily assembled to deal with the cash-for-clunkers paperwork wasn’t ready. Dealers complained they were spending all day trying to submit applications. The backlog meant the government wasn’t sure how many cars they had sold or how close they were to the end of the billion dollars Congress appropriated for the program.

So they called at least a temporary halt. This irritated Candice Miller, a congresswoman from Macomb County who used to be Michigan’s secretary of state. She called the program the most successful part of the government’s attempt to stimulate the economy, and called on Congress to pour more money into it, fast.

Well, if they do so, it better be fast, because the House is about to take a month-long vacation. Part of me thinks she is right. If this program has cars flying out of the showrooms, great. Yet I also wonder if maybe a breather would be a good idea.

It might be useful to know more about who is trading in and who is buying what. What if most of the new purchases are imports? Would it make sense to extend the program to the real clunkers still on the road, like cars from the 1970s?

And is just destroying all the old cars really the best thing to do, from a practical and environmental standpoint?

I don’t know the answer to these questions, but I think it would be a good idea to find out. After all, one of the scariest sentences in the language is this: “It seemed like a good idea at the time.”

 

[Philly]

Giving free money to people who were idiots and bought some gas guzzler years ago is a terrible idea.

Where is my dad's reward for buying his fuel efficient Ranger 4-cylinder 15 years ago? He gets no pat on the back for saving gas and trees throughout the years? No, he doesn't get anything. But irresponsible buyers get free money!

Why does our government reward bad decisions? Why don't they reward good decisions? Like giving people who already have old, tired, but fuel efficient cars a little boost to get them into a new fuel efficient car. I mean if you're going to enact a terrible policy that's gonna add to my money's worthlessness, at least give the money to the right people.

I have lost a lot of faith in the US government recently. It doesn't matter who is running it, it's still a waste of time and money.

I guess it pays off to roll with the trends. Maybe I'll have to pick up my Prius now so I can get money from the government once diesel wins once and for all. Or something. Plus I'll look "cool" to all those other earthy types.

 

[Omnis]

I'm still absolutely baffled that people have to take more than 2 seconds (not counting time spent scoffing) to decide that taking something and destroying it is bad. And god help those who think it's good.

 

[Keef]

Yeah, the whole destroying something old and replacing it with new is a retarded idea. Obviously the government never thought this through very well. While the new car may get better gas mileage than the old one, if you factor in the environmental cost of its manufacturing process (which may never have happened if there were no demand for it, like if the "clunker" was still on the road), the picture starts to look a little dim. Actually it starts to look very wasteful. And hypocritical.

 

[Philly]

It almost goes along with the old 'american excess' thing. If it's broke, get a new one instead of fix it. I thought that was the image we were trying to get away from?

Jalopnik has a video of them taking down an S80. That is actually a nice car. I know a lot of us here probably don't think Volvos are the best drivers cars, but I'm sure a lot of us would be proud to own it. That is just sad.

One commenter put it best: send that page to congressmen. See what they think. Because I see no problem with the government buying old broken down Lincolns off the public and destroying them. But there is no reason to do that to a car the majority of the population would be very happy to own. We're definitely giving off a terrible image of America here. 👎

 

[ROAD_DOGG33J]

Well, they get money too. Just not as much. As long as their car was made after MY1984, and gets at least a 4 MPG increase, they get the $3500.

The car has to get 18MPG or less.

 

[Holdenhsvgtsr]

Jalopnik has a video of them taking down an S80. That is actually a nice car. I know a lot of us here probably don't think Volvos are the best drivers cars, but I'm sure a lot of us would be proud to own it. That is just sad.

That was good to watch 👍 the volvo just didn't want to die

 

[JCE]

Can someone please get rid of the entire US Goverment. I ABSOLUTELY DO NOT WANT MY HARD EARNED MONEY BEING SPENT ON SUCH RETARDED PROGRAMS! $2,000,000 more?

And it pains me to read those cars in the UK as well that are being junked.

Jalopnik has a video of them taking down an S80. That is actually a nice car. I know a lot of us here probably don't think Volvos are the best drivers cars, but I'm sure a lot of us would be proud to own it. That is just sad.

What the ****?! They junked a Volvo--A VOLVO! That car is probably one of the cleanest vehicles to come to the US from Europe. I didn't even want to watch that video of the S80--last time I was shopping for a daily driver an S80 was on my list. Someone please pay my moving bill to another country, I want out of here so badly.

 

[a6m5]

Many of you are focusing too much on the environmental-end of the business. I was under the impression that was just an excuse. Cash for Clunkers are here to sell new cars, to help the struggling automakers & dealers. And while so many are shocked by this, like YSSMAN noted, we knew this weeks ago, if not months ago.

Obama sure looks & sounds smarter than George W. Bush, but Cash For Clunkers sure doesn't. While I haven't taken a close look at this plan, at a quick glance, it looks like a major failure waiting to happen, both economically, and environmentally.

I've heard people(not talking about gtp) complaining about how Cash for Clunkers are helping the imports, and I do share their concern. It's the American tax payer's (future)money. I think it would've helped if only the domestic cars + cars built in the USA qualified for this.

Edit: On nice cars being junked. If the car is really, really, really, really worth more than the "Clunker" money, the dealer can take it in as a trade-in, and sell it as a used car for profit. Keep that in mind. That "nice car" could be a real piece of crap, regardless of the make, or the name.

 

[Perfect Balance]

And it looks like PB could soon be out of the job he was doing.

Not before I killed 13 of them.


Old Ford F-150's just DO NOT WANT TO DIE. I drained the oil, drove it outside, put the Sodium something solution in it, started the truck and punched the gas pedal.



It ran for 27 minutes. 27!!! With no oil in it and 2 quarts of stuff that was supposed to kill it!

And you know what? It didn't seize up! I got tired of holding the gas pedal so I let off the gas and it sputtered and died, after which we couldn't get it to start again, but it still cranked over.


Those things are built like tanks. Along with the 5.0s in Ford Explorers. One I killed ended up clanking around until it punched a hole in the block and some metal fell out, after which it started running like it simply had a misfire. Those things just won't die.

Jeep Cherokees on the other hand, die in about 5 seconds once you pour that crap in them.

 

[Radracing]

In Japan it cost more to register a car that is older so every year they up the registration fee plus a very stringent smog test. The reason is for people to keep buying a new car at least every five years. Why? too keep the auto industry alive and the air clean. As we all know cars can actually run forever as long as you maintain it and have parts readily avialable. But really it's like the fashion industry they come up with new styles every season to keep people from buying clothes consistently and also they wouldn't need to make it as durable so that if you tried to keep the clothes it would not last you very long. They even charge you double for brand new worn jeans and people still pay top dollar for them. So welcome to the market economy society. I think we are a little bit at fault for buying into this consumer life style.

Going back to the topic of saving the clunkers. Most people that do trade in and take advantage of this are really not mechanically savy so it would cost them a lot more to have it fixed or restored in the first place.

In my opinion I would rather see the cars destroyed and recycled rather than see this cars on the road as a safety hazard or smoke belching gas guzzler. At the same time keep someone working for the auto industry employed and still feed his family. Doesen't hurt if it helps the economy too right?

 

[a6m5]

Japanese government do penalize you for owning older cars, this is true.

Cars are not always scrapped, however. Japan is a major exporter of used cars & parts as well as the new.

 

[Radracing]

Japanese government do penalize you for owning older cars, this is true.

Cars are not always scrapped, however. Japan is a major exporter of used cars & parts as well as the new.

Yup! a lot of the use engines and parts are sold in 3rd world countries. But who would buy a gas guzzling V8 from a 3rd world country when gas cost 2x as much? You could probably feed a whole family for a month just for the gas bill if they did.

 

[YSSMAN]

And while so many are shocked by this, like YSSMAN noted, we knew this weeks ago, if not months ago... While I haven't taken a close look at this plan, at a quick glance, it looks like a major failure waiting to happen, both economically, and environmentally.

Well, I think much of this depends on what you want to focus on as a success or a failure. Personally, I don't think the environmental factor was ever considered, as this was solely meant to stimulate the sales of new vehicles, and thereby the production of new units as well. Politically, I haven't heard a whole lot of screaming on either side of the aisle at this point, which is odd, because this is perhaps the only program that has really, honestly "worked" (depending on how you want to look at it) in a decent amount of time.

I've heard people(not talking about gtp) complaining about how Cash for Clunkers are helping the imports, and I do share their concern. It's the American tax payer's (future)money. I think it would've helped if only the domestic cars + cars built in the USA qualified for this.

Well, this is where you would run into an unbelievable "S-storm" of problems. If we regulate sales only to American cars, that becomes a bit too protectionist to actually be helpful. Make it so its only American-made vehicles, it becomes an even narrower list of vehicles. Sure, GM builds a lot of their cars in the US, but Chrysler and Ford do not. Honda Accords and Toyota Camrys would qualify, but then there are all those other cars that would not.

To put things simply, leaving things open actually keeps it on an even keel. While I too would be a little bit concerned that too much money would be going to Honda and Toyota, I'm fairly confident that there is still plenty of interest in cars like the Ford Fusion, or the Chevrolet Cobalt XFE, especially when looking solely at fuel economy. My guess is that any kind of "suspension" of the program (even if for only a week) would have been helpful in seeing where the money goes. Around here, at least, the dealers have been moving through their low-mid range vehicles easily. Fox Ford, the big dealer in town, is already out of Fusions (for the most part). In fact, I didn't even see any Foci on the lot either.

I guess for me, I see people in this country to be more likely to shop for an American car, or one of the "mainstream" Japanese cars (likely built in the US) before doing the Kia-Hyundai-Suzuki dance.

Edit: On nice cars being junked. If the car is really, really, really, really worth more than the "Clunker" money, the dealer can take it in as a trade-in, and sell it as a used car for profit. Keep that in mind. That "nice car" could be a real piece of crap, regardless of the make, or the name.

As I recall, aren't dealers facing a fine of $15,000 if the cars aren't disabled? While I'd agree on some of the vehicles, that yes, they should be saved... We really do have to ask ourselves that in the grand scheme of things, is it really that necessary? Likely not, I'm afraid. If people are dragging in their Dodge Caravans, barely running, and they're getting more than what they're worth... Kudos to them. Hell, if I still had my Jetta, I'd be halfway attempted to do the same thing (despite loving that car).

 

[Philly]

I would bet that there are some people who bring in their old cars (like the S80) and say they want the CARS rebate, but if that car is worth more than that $4,500, the dealer might use it as a trade in or something and then re-sell it for more.

But I would be interested in seeing how many of these cars already have something seriously mechanically wrong with them. Because I don't have much of a problem with people scrapping cars that are so broken that it makes sense to scrap them, or cars that are so old and beaten that nobody wants to own them anyway. And I somehow doubt that somebody would take in a car that is actually worth something to get scrapped when they'd end up better selling it on the used market.

However I'm sure that there are a lot of cars being scrapped that are perfectly fine but just have a value lower than they'd fetch from CARS. That is where the system really breaks down. Because you're basically taking all the cars that low-income families and students would buy and throwing them off the market.

 

[YSSMAN]

However I'm sure that there are a lot of cars being scrapped that are perfectly fine but just have a value lower than they'd fetch from CARS. That is where the system really breaks down. Because you're basically taking all the cars that low-income families and students would buy and throwing them off the market.

The problem here is that assumes that those who would be able to trade in their vehicles for a decent profit with the CARS program would. After all, no matter what you're dragging in, and with almost anything you're buying, you're going to have a car payment. Not everyone can afford that. Even if you were to get the full $4500 credit on a 2009 Nissan Versa 1.6 ($9990), you'd still owe over $5500 after the deal is complete. There are a lot of people who wouldn't be able to pull that off.

Sure, I get where you're going. But realistically, it isn't that big of a problem, especially when it is fairly likely that these vehicles weren't good cars or trucks to begin with.

 

[Philly]

That is true. And then there are all the small cars that still get fairly decent mileage and don't qualify for the program.

 

[Omnis]

Many of you are focusing too much on the environmental-end of the business. I was under the impression that was just an excuse. Cash for Clunkers are here to sell new cars, to help the struggling automakers & dealers. And while so many are shocked by this, like YSSMAN noted, we knew this weeks ago, if not months ago.

Yes but it helps the automakers at everyone else's expense. There is no growth, only a reallocation at the very best. Yet it will always be a net loss for the economy as it takes resources to reallocate in the first place.

There is only an illusion of aid or growth, in accord with what Frederic Bastiat called that which is seen and that which is not seen.

 

[Jim Prower]

y' haven't had anything like a Cavalier in, have you? Or a Geo? Y'know, cars on their last legs worth junking?

well, 'course not...they're relatively efficient...

 

[homeforsummer]

That is true. And then there are all the small cars that still get fairly decent mileage and don't qualify for the program.

Which isn't the case in the UK. It doesn't matter how fuel efficient the old car is, as long as it's over 10 years old it's elligible and you can go out and buy something that does 15mpg even if your trade-in did 50mpg. The UK's scheme does look worryingly like it'll penalise those who rely on being able to buy cheap cars. Like myself, for example - I'm currently in the market for cars of pretty much exactly the right age and right value to be scrapped.

Re: Japan - their equivalent of the MOT we have in the UK is very strict which keeps badly maintained cars off the road. It doesn't necessarily penalise people who've kept their older cars in great condition. And then of course as someone mentioned, there's a huge market for exporting their cars. As an example close to home, there are more imported Mitsubishi FTOs on sale in my area than there are UK market Toyota Corollas. An obscure, mainly import-only sports car is more attainable than a bread and butter volume model sold in this country. There are a ridiculous number of Japanese imports near me.

 

[T-Squared]

Old Ford F-150's just DO NOT WANT TO DIE.

No kiding. My Dad has a 2001 F-150 with 230,000 miles and its survived 8 years of hauling 10,000 pound skidsteers, salty roads, plowing snow (Its problemly slammed into snow banks at 20mph 5,000-7,500 times in its life.) And its still running! It's never had anything major break on it ether.

 

[Tornado]

Jeep Cherokees on the other hand, die in about 5 seconds once you pour that crap in them.

Of course. They would do that anyways just by driving them normally.

Well, this is where you would run into an unbelievable "S-storm" of problems. If we regulate sales only to American cars, that becomes a bit too protectionist to actually be helpful.

The U.S. government has thrown something like what, a hundred billion at GM/Chrysler? Anyone who cares about silly crap like that at this point has no right to complain when they should have done so back in December. This program is essentially throwing tax payer money at people to go buy cars that the overall car buying public perceive to be fuel efficient. Like Toyotas and Hondas.

I guess for me, I see people in this country to be more likely to shop for an American car, or one of the "mainstream" Japanese cars (likely built in the US) before doing the Kia-Hyundai-Suzuki dance.

I read somewhere (and I haven't the life of me where, so take it with a grain of salt if you want) that Kia is the one that pretty much makes all the money off these things. I think it was talking about the U.K. program.

 

[Jim Prower]

That's likely because Kia's prices are closest to the gov't handouts while still being kinda reliable.

 

[TofuStoreDrift]

So I guess shadetree mechanics will be a out of jobs soon. In my opinion this is an extreme waste of tax dollars. I mean if a person can't afford the upkeep on their old cunker, then how can the afford the upkeep and car payments on a new car? Will the Fed have to bail out the banks again after this program has become more mainstream?

This is a little off-topic but let me ask you a question, If you were having problems paying your debts, would you go out and get another loan to pay your bills? That exactly what our government is doing.

 

[stumpydino]

in this country that has owners clubs for morris marinas and austin allegros i can safely assume, and as far as i can tell in the US as well, the scheme is about as out of touch as the manufacturers that totally overshot the mark of demand, trying to keep the workers occupied, trying to get idiots to buy cars they dont want.

 

[a6m5]

Well, this is where you would run into an unbelievable "S-storm" of problems. If we regulate sales only to American cars, that becomes a bit too protectionist to actually be helpful. Make it so its only American-made vehicles, it becomes an even narrower list of vehicles. Sure, GM builds a lot of their cars in the US, but Chrysler and Ford do not. Honda Accords and Toyota Camrys would qualify, but then there are all those other cars that would not.

To put things simply, leaving things open actually keeps it on an even keel. While I too would be a little bit concerned that too much money would be going to Honda and Toyota, I'm fairly confident that there is still plenty of interest in cars like the Ford Fusion, or the Chevrolet Cobalt XFE, especially when looking solely at fuel economy. My guess is that any kind of "suspension" of the program (even if for only a week) would have been helpful in seeing where the money goes. Around here, at least, the dealers have been moving through their low-mid range vehicles easily. Fox Ford, the big dealer in town, is already out of Fusions (for the most part). In fact, I didn't even see any Foci on the lot either.

I guess for me, I see people in this country to be more likely to shop for an American car, or one of the "mainstream" Japanese cars (likely built in the US) before doing the Kia-Hyundai-Suzuki dance.

You are probably right. But just to clarify, I was talking about Domestic cars "+" the cars built here. Not one or the other, but both.

As I recall, aren't dealers facing a fine of $15,000 if the cars aren't disabled?

I'm not sure of the penalty, but look at it from the perspective of dealers accepting the clunker. If the car is worth more than the clunker-cash, they can just accept it as a trade-in.

Another thing to keep in mind about trading in BMWs & Volvos, they might be fantastic new cars. But they do not always make great used cars, due to the parts & maintenance costs, also not the best reliability. If I sounded like I worded this really carefully, it has absolutely nothing to do with the couple of big name moderators on this site(at least one of them is an Admin now).

Yes but it helps the automakers at everyone else's expense. There is no growth, only a reallocation at the very best. Yet it will always be a net loss for the economy as it takes resources to reallocate in the first place.

There is only an illusion of aid or growth, in accord with what Frederic Bastiat called that which is seen and that which is not seen.

Chill, Omie(). I'm not sold on this thing either.

 

[JCE]

Old Ford F-150's just DO NOT WANT TO DIE. I drained the oil, drove it outside, put the Sodium something solution in it, started the truck and punched the gas pedal.

It ran for 27 minutes. 27!!! With no oil in it and 2 quarts of stuff that was supposed to kill it!

And you know what? It didn't seize up! I got tired of holding the gas pedal so I let off the gas and it sputtered and died, after which we couldn't get it to start again, but it still cranked over.

Those things are built like tanks. Along with the 5.0s in Ford Explorers. One I killed ended up clanking around until it punched a hole in the block and some metal fell out, after which it started running like it simply had a misfire. Those things just won't die.

One more reason to buy Ford.

 

[Sniffs]

a bleeping storm blew through before I could comment, thismorning!

they're gonna end up eliminating every used vehicle that costs under 20-25 thousand dollars at this rate. I'd rather see 4500 cash for JUNKERS, which actually DESERVE to be scarapped, not these poor buggers that get tossed (as per american habit) the minute a fuse blows!
this is a repeat of what they tried back in 91 (and loudly lamented in Hot Rod), but there was no "cash incentive" then.

 

[Perfect Balance]

One more reason to buy Ford.

Not that they ran great before we tried blowing them up.


I guess if you were going somewhere and you absolutely most definitely had to make it there no matter what happened and whatever the circumstances were, yes, you would have to buy an old Ford pickup.

Everyday driving though? No, I wouldn't.

 

[Omnis]

Chill, Omie(). I'm not sold on this thing either.

I know. I do it for the people at large.