Cash for Clunkers - did you see this coming?

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InTheBuff

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I was in the market for a new minivan. Local remaining Chrysler dealer new that I wanted to "clunk" my old pickup. He called me today. Bad news, said that Chrysler is cancelling all rebates come midnight Wednesday. He thinks I'll be better off taking what they'll give me on trade + rebates.

I thought that this legislature was to make a new car more affordable for those of us driving clunkers and to get less fuel efficient vehicles off the roadways. Looks like the car companies think that it is about their profit.

I wondered if the car companies would pull these shenanigans. Should I have seen this one coming? Do you think all car companies are going to do this?
 
My father is in the business and several items have not been explained properly. First, there is only one billion in discounts, once its gone its gone. Second, vehicle must have been running, titled, registered, and insured for the last 12 months. (no buying a junker just for discount). And third, the mileage must increase by a certain % to qualify.

The dealers find tracking it to be harassing, waiting on govt money to be a challenge, and some just arent going to accept it.

Rebates in general (outside of cash for clunkers) are a manufacturers way of reducing prices on a temp basis. It also helps move slow sellers and year end units. Unfortunately it has had a drastic effect on resale value of most used cars. IMO they need to reprice units effectively from the start and hold the guns. I hear GM is now going to sell units thru Ebay in Cali and then pickup from stock at local dealers. Interesting concept ...
 
im going to trade my truck in i need lunch money for tommorow:D
 
Everyone is in it for the bottom line, so they will find ways to get around things. I don't understand how the company can do that, although this is the first I've heard about cash for clunkers.
 
killrwheels@autogeek said:
My father is in the business and several items have not been explained properly. First, there is only one billion in discounts, once its gone its gone. Second, vehicle must have been running, titled, registered, and insured for the last 12 months. (no buying a junker just for discount). And third, the mileage must increase by a certain % to qualify.

The dealers find tracking it to be harassing, waiting on govt money to be a challenge, and some just arent going to accept it.

Rebates in general (outside of cash for clunkers) are a manufacturers way of reducing prices on a temp basis. It also helps move slow sellers and year end units. Unfortunately it has had a drastic effect on resale value of most used cars. IMO they need to reprice units effectively from the start and hold the guns. I hear GM is now going to sell units thru Ebay in Cali and then pickup from stock at local dealers. Interesting concept ...
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:iagree::whs:The car also needs to get 18mpg or less. Not all dealers are participating as Killr said.
 
Seems like something else to increase the deficit by liberals.

From Reuters

Tucked into a military spending bill that just passed Congress and is now heading to President Barack Obama for signature is a piece of legislation meant to help get gas guzzlers off U.S. roads and replace them with new, more efficient vehicles. Called the Consumer Assistance Recycle and Save Act of 2009, or more commonly, “Cash for Clunkers,” the $1 billion program will provide a voucher of up to $4,500 (effectively just knocking that much off the price tag — dealers will get electronic payments from the feds) to help offset the cost of new car purchases or leases over the next five months.

lunkers, Defined: You can only trade in drivable vehicles made in the last 25 years that have been continuously insured by the same owner for at least one year leading up to the trade in (so no junkyard finds or used cars bought to “flip”). Qualifying “clunkers” will have a fuel economy rating of no more than 18 MPG (combined city and highway ratings, which you can find on fueleconomy.gov).

How Much Cash?: New cars qualify only if they have a sticker price of $45,000 or less. So no Tesla Roadsters ($109,000), but a Toyota Prius ($22,000) could qualify, depending on your trade-in. And once the $1 billion appropriated for the program runs out (good for an estimated 250,000 vouchers), it’s over unless Congress extends the program.

Passenger Cars: New passenger cars will qualify under the program only if they have a fuel economy of at least 22 MPG. If the new model gets four more miles to the gallon than the old car, you qualify for the $3,500 credit. With a 10 MPG improvement or more, you can qualify for a $4,500 credit.

Trucks and SUVs: For light trucks, SUVs and minivans, the new vehicle has to get at least 18 MPG and can offer as little as a 2 MPG improvement over the old one to qualify for $3,500. With a minimum 5 MPG improvement, you can qualify for $4,500.
 
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I don't understand the part where the engines have to be destroyed before the cars go to the scrap yard. It doesn't sound like a 'green' practice to fill the scrap yards and intentionally destroy a working engine?

Procedure listed below:
Appendix B to Part 599 - Engine Disablement Procedures for the CARS
Engine Disablement Procedures for the CARS Program

THIS PROCEDURE IS NOT TO BE USED BY THE VEHICLE OWNER

Perform the following procedure to disable the vehicle engine.

1. Obtain solution of 40% sodium silicate/60% water. (The Sodium Silicate (SiO2/Na2O) must have a weight ratio of 3.0 or greater.)
2. Drain engine oil for environmentally appropriate disposal.
3. Install the oil drain plug.
4. Since the procedure is intended to render the engine inoperative, drive or move the vehicle to the desired area for disablement.
5. Pour enough solution in the engine through the oil fill for the oil pump to circulate the solution throughout the engine. Start by adding 2 quarts of the solution, which should be sufficient in most cases. CAUTION: Wear goggles and gloves. Appropriate protective clothing should be worn to prevent silicate solution from coming into contact with the skin.
6. Replace the oil fill cap.
7. Start the engine.
8. Run engine at approximately 2000 rpm (for safety reasons do not operate at high rpm) until the engine stops. (Typically the engine will operate for 3 to 7 minutes. As the solution starts to affect engine operation, the operator will have to apply more throttle to keep the engine at 2000 rpm.)
9. Allow the engine to cool for at least 1 hour.
10. With the battery at full charge or with auxiliary power to provide the power of a fully charged battery, attempt to start the engine.
11. If the engine will not operate at idle, the procedure is complete.
12. If the engine will operate at idle, repeat steps 7 through 11 until the engine will no longer idle.
13. Attach a label to the engine that legibly states the following:
This engine is from a vehicle that is part of the Car Allowance Rebate System (CARS). It has significant internal damage caused by operating the engine with a sodium silicate solution (liquid glass) instead of oil.
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I know some used car dealers aren't happy that the market on the lower end cars is going to be pretty disrupted, too.

Here is a truck that was traded in locally and sent to the recycler:
I was at Johns Auto Parts and saw this little beauty. Its their first clunkers for credit. Its a 2001 F150, 121,xxx miles on it, no rust, no dents, not even really a scratch on it. The 4.6 in it was locked up solid with a note taped to the intake saying this engine has major engine damage. Isn't a truck like this worth way more then $4500 on the street? Im so glad Obama is taking clunkers like this off the streets......:roll:
01.jpg


02.jpg


They say on monday they are getting in over 300 cars from this program from this weekend alone........
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I wonder if there is going to be an increase in repossessions from people who took the government money, bought a car, and then have trouble paying for it?

Randy
 
Unfortunately that F150 isn't worth much more than the trade-in credit, which is probably why it was cashed in. But it is shame to see something like that disabled and taken off the road, when there are all sorts of low-income folks that could probably buy it for a nominal amount with a trade-in credit on some poor running 1980s pickup without fuel injection, if this is supposed to be a "feel good environment" program. Have the more wealthy person buy a new truck for the economy, then give the trade-in to someone with a "real" clunker that should be off the road for emissions impact. That should make the both automotive and environmental lobbyists happy...

Getting any old, daily driven vehicle off the road is more worthwhile than dumping 10+ fairly modern trucks, since the pollution and emissions controls have seen a humongous gain over the past 15-20 years. My 1980s BMWs (which were at the forefront of emissions technology back then) probably pollute more per mile than any gasoline SUV or truck made in the last decade, as the science and engineering has improved that much. I guess mine should get crushed, huh? :rolleyes:
 
What about the environmental concerns of producing new vehicles and consuming more raw materials just because the government 'created' the demand?

Is the typical gain in lower exhaust emissions and increased MPG's offest by the environmental impact of producing a complete new vehicle?

Hmmm.......
 
Cash for clunkers was such a success the Obama administration has come up with another great program based on the same concept.
CashforC.jpg
 
I cannot believe we allocated more tax dollars to this program ... what a waste especially since we dont have it, and our kids will be paying for these high expeditures for years. It will be interesting to see how many of these cars go back as repo's since most dont/havent had payments in years.
 
If you look at the entire federal spending ($3 Trillion):

1. Defense: $613 Billion (21%)
2. Social Security: $612 Billion (21%)
3. Medicare/Medicaid: $682 Billion (23%)
4. Mandatory expenses: $303 Billion (10%) = other entitlement stuff
5. Interest on the debt $249 Billion (8%)
6. Discretionary spending - where everything else that runs the government including clunkers program - $520 Billion - 17%

The big picture view is if you got rid of virtually every govt dept including congress, etc and no extra pork spending, we still still have budget issues since our income is around 2.5 Trillion because we are spending about 1/2 of the social security income now. The pork is actually a small part of the budget although it is a lot of money.
 
we are out of control with all spending, and need to cut costs where/when possible. Just like a family budget you still need to eat and put a roof over your head, but you dont need Ruth Chris and a 10 bedroom mansion.

As for social security, the worst part is that for many years it was overpaid and the money was siphoned elsewhere. Now that the population of retirees will outpace those paying into the system there is a great shortfall. Its truly ashame to be forced into paying for something that likely wont be there in the same fashion as our grandparents and parents were entitled too.

We need to control costs, plain and simple. Reduce the burden when possible and as possible. Even the smallest of areas count when you are talking billions to treat only a small part of the population to a discount while adding the debt to those that pay the most in taxes.
 
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