Cash for Clunkers - Good or Bad Idea?
hpmctorque
Member Posts: 4,600
in General
In an effort to stimulate the economy, it seems that some of our lawmakers are anxious to introduce a "clunker" plan, to spur auto sales. I don't know about you, but I'm not in favor of stimulating sales in this manner. I think it's an expensive, inefficient "make work" program, that will do little to reduce green house gases. One reason is that older vehicles tend to be driven less than newer ones.
Another reason is that some people will exploit the program by collecting money for cars that would be junked anyway.
A third reason is that it doesn't take into consideration the significant amount of pollution produced in manufacturing vehicles - from mining and processing the raw materials to transporting new vehicles to dealerships, and steps in between. And how about the environmental effects ot prematurely scrapping vehicles before the end of their useful lives?
See what you think...
"Wed Jan 14, 2009 6:41pm EST - WASHINGTON (Reuters) - Congressional lawmakers proposed a consumer incentive on Wednesday to help revive slumping auto sales and get the oldest, most polluting and less fuel efficient vehicles off U.S. roads.
Industry executives and automaker lobbyists believe bipartisan 'Cash for Clunkers' initiatives introduced in the House of Representatives and Senate offering up to $4,500 toward the purchase of a new vehicle is likely destined for economic stimulus legislation now taking shape.
'We face real challenges with trying to encourage drivers to trade in their older, less fuel efficient vehicles, particularly in this tough economic climate,' said Dianne Feinstein, a California Democrat.
A congressional aide said no decision has been made about whether to include the measure in stimulus legislation.
The approach would permit consumers to collect a voucher from dealers designed to offset the cost of a new car. Vouchers could be used to cover transit costs in some cases. Old cars would be scrapped.
Environmental groups agree that older sport utilities, pickups and vans are among the worst polluters and reducing their population will reduce greenhouse gasses.
Proposed Senate legislation would fund the program through 2012, potentially targeting up to one million vehicles annually.
Similar programs are underway in Texas and California and in Europe.
Another reason is that some people will exploit the program by collecting money for cars that would be junked anyway.
A third reason is that it doesn't take into consideration the significant amount of pollution produced in manufacturing vehicles - from mining and processing the raw materials to transporting new vehicles to dealerships, and steps in between. And how about the environmental effects ot prematurely scrapping vehicles before the end of their useful lives?
See what you think...
"Wed Jan 14, 2009 6:41pm EST - WASHINGTON (Reuters) - Congressional lawmakers proposed a consumer incentive on Wednesday to help revive slumping auto sales and get the oldest, most polluting and less fuel efficient vehicles off U.S. roads.
Industry executives and automaker lobbyists believe bipartisan 'Cash for Clunkers' initiatives introduced in the House of Representatives and Senate offering up to $4,500 toward the purchase of a new vehicle is likely destined for economic stimulus legislation now taking shape.
'We face real challenges with trying to encourage drivers to trade in their older, less fuel efficient vehicles, particularly in this tough economic climate,' said Dianne Feinstein, a California Democrat.
A congressional aide said no decision has been made about whether to include the measure in stimulus legislation.
The approach would permit consumers to collect a voucher from dealers designed to offset the cost of a new car. Vouchers could be used to cover transit costs in some cases. Old cars would be scrapped.
Environmental groups agree that older sport utilities, pickups and vans are among the worst polluters and reducing their population will reduce greenhouse gasses.
Proposed Senate legislation would fund the program through 2012, potentially targeting up to one million vehicles annually.
Similar programs are underway in Texas and California and in Europe.
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I could also be a potential winner, since one of my cars is worth about $2,500. However, if this program were to be enacted, it wouldn't be free for society. It would ultimately be paid for by us tax payers, or by future generations. I feel that it would be a poor allocation of economic bailout resources.
What a spoil sport. Just pass it on to the grandkids. I see no end to the bailout mania that has taken over the last 6 months. When the porn industry is looking for a bailout you know that no one is in charge of the till. It is only going to get worse. Your post already had me thinking about buying an old $300 wreck to use as a trade on a new BMW X5 diesel. You can get them up from Mexico. I am sure the fellow that works for me would take that much for his old Ford. It would not pass smog so that is another $1000 from the state of CA. The key here is how can we get back some of the wasted tax dollars?
Also, I don't know if the 18 mpg is the city MPG estimate or the combined. I'm guessing it's the combined. It's mainly designed to target big, heavy SUVs and get them off the road. So if you have some worthless, high-mile 2002 Expedition, the idea is to get you into something new and more fuel efficient. Also, you only get the money if you buy something new with fuel economy that beats the standard for its class by at least 20%.
That $4500 is reduced for older vehicles. I think for 1998-2001 it's $3,000. And anything older, it's $2,000. I have a gut feeling that anything 1977 and older might not even qualify, because they didn't start putting out fuel economy numbers until 1978.
I really don't think this plan would get too many really old cars off the road. For instance, take my '79 New Yorkers. The 360-2bbl has a combined EPA estimate of 14. I dunno what the city/highway ratings are, because the EPA website only lists the combined for 1979. Anyway, it would qualify for that $2,000, towards a newer vehicle.
Still, even though the market says otherwise, my New Yorkers are worth way more than $2000 apiece to me. I'm not about to scrap one (you can only do one car every three years) just to get myself into a new car payment on something that I might not even like. And most people who are still driving a 1979 New Yorker because they can't afford anything better, sure as heck aren't going to be able to qualify for a new car payment...even with an extra $2,000 kicked in for the down payment!
As for my 2000 Intrepid, it wouldn't even qualify for the plan, because it's too economical. I forget what the combined rating was, but it was rated 20/29 city/highway.
I wonder how it would apply to vehicles that are so large they don't get EPA-rated? For example, the Ford Excursion was heavy enough to be exempted. Most 3/4 ton and up trucks have also been exempt for years now. I think even some versions of the Ford Expedition don't get tested anymore.
So if they don't get tested for an EPA rating, I wonder how they factor into this incentive program? Granted, most people don't buy a 3/4 ton truck as a daily driver, unless they really need it and nothing else will suffice. So maybe this would be a moot point?
That would not produce many takers. A 15 year old PU that runs will bring over $2000 any day of the week. A 2002 Chevy work truck with 100k miles will bring $4500 in trade. Easy bring $6000 on Craigslist. I am glad I did not offer Ricardo $300 for his old Ford... :confuse:
We've had unprecedented new car sales over the past decade. Most of this was driven by easy credit, rebates, incentives, wants vs. needs, etc. Enough is enough. No where is it written that people NEED a brand new car. There are millions of perfectly good used cars sitting on dealer's lots that are more affordable and will accomplish the same task as a new car. Heck we can toss in a can of "new car smell" to make you feel better.
Why bribe Americans to go further in debt? We are in this financial mess because of greed, wants vs. needs, and easy credit. Let's stop the shenanigans and get back to the basics. You buy a new car when you cna afford a new car. If you only have $4000 and terrible credit, pay cash for a used car. Run for two years while you re-establish your credit. Don't buy a $20k car at some horrific interest rate just so your neighbors think better of you. :sick:
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
Both the California programs require that you have owned the car for a minimum period of time, 1 year IIRC. The one I am really in favor of offers owners $1000 for any vehicle that is MY 1989 or older, passes the biennial smog check, and can be demonstrated to move under its own power. The scrapping has to be done within 60 days of the successful smog check, and you get $1000.
The other program is for cars newer than 1989 which have failed smog for the second time. They will pay you $1000 to scrap it rather than repair the smog problem again, the presumption being that if you DID the smog repair and got it past the smog check, it would soon be out of emissions compliance again. For a 10 year old car which might require $500 or more in smog repairs (not to mention the other repairs etc it might need at this age), this might be a tempting option.
So despite the mention of the California programs in this article, the new national proposal is nothing like either California program, right? As an economic incentive to jump start sales for the auto industry, it sounds a lot better to me than throwing another umpteen billions of dollars at the automakers themselves. Would it be only for purchase of domestic vehicles?
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
I think raising the tax on gasoline would be a much more efficient way of reducing the negative impact of older gas guzzlers. For those who oppose higher taxes, the increase in the gas tax could be offset by a comparable reduction in other taxes.
"Would it be only for purchase of domestic vehicles?"
Good question, but since this is not a law yet, and, from what I understand, the final draft of the proposal hasn't been finalized, I don't know the answer to this question.
Do you know approximately how many cars have been scrapped as a result of the California law? To what extent has it reduced pollution in that state?
Does anyone know the details of the Texas law? Is it essentially the same as the California law, or different from it?
Regards -
M. J. McCloskey
My sentiments exactly, although I'd think an asteroid strike would accomplish the same thing. We can dream, anyway...
Mine: 1995 318ti Club Sport-2020 C43-2021 Sahara 4xe-1996 Speed Triple Challenge Cup Replica
Wife's: 2015 X1 xDrive28i
Son's: 2018 330i xDrive
Good idea. I just hope I get to see the Smithsonian before DC gets wiped out.
our soon to be inaugurated president was honored at a concert today at the lincoln memorial.
that is my favorite monument. not only do do you see a larger than life representation of lincoln inside, one wall is carved with the gettysburg address.
the effect worked, i felt small in the presence of greatness.
the epa headquarters building with it's gold leaf accents pretty much pi**es me off.
I feel the same way about the money wasted on the EPA. What a joke on US.
many others like it too.
the smithsonian art museum is great and doesn't have lines either.
the national zoo is free, but wait until the weather warms up a bit.
some city's have extra charges for parking large suv's.
i went to boston to go to a bruins hockey game a few weeks ago.
luckily, my explorer did not have to get into the oversize lane going into the parking garage. :surprise:
In here, perhaps we could limit the discussion to figuring out how to get there in a clunker?
Right :sick:
I would probably not want to take my nice vehicle there to start with. So buying a clunker for the trip would be an option. I think I would just hold my nose and ride the bus. We do have a different idea of what is great. I don't consider being in one of the cities where murder rates top the nation, to be desirable. I do limit myself by avoiding cities. As most of the good museums are set in less than desirable locations.
If you see a neighborhood where there's a boarded-up crack den next to something that looks like a showcase in Better Homes and Gardens, then you're in a neighborhood that's being re-gentrified, or whatever the word is for that. An area that's on the up-and-up, which describes a lot of DC.
The area around the Mall, which is where most of the monuments, memorials, museums, etc are, is pretty safe and clean. Whenever I go into DC, I'll usually take the Metro Green Line in. There are a few hotels in Greenbelt, Maryland, that are close to the last stop on the Green Line in Maryland. You can park at the Metro stations for free on Saturday/Sunday (at least the Greenbelt one), but any other day, you have to pay. And they only accept payment by something called a FastPass, which you have to buy at the station. I have one, but I forget how much they cost. I think initially it's $25, but comes with $20 worth of fares/parking on it, and you can add to it at the kiosks in the station once you deplete it too far.
As for the Green Line, it stops at the Convention Center, and then goes further down and stops just north, and then just south, of the Mall. If you google "DC Metro Map", it should give you a starting point.
There may be other Metro lines that are more convenient, but the Green Line works fine for me.
Make sure you visit the Vietnam Memorial. You will come away very emotionally moved. Hard to explain, but even if you never served it will affect you.
As to the EPA just think of the wonderful work they are doing to regulate cow farts. I feel safer just knowing they are there....interfering with my life at every turn.
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
I generally like "incentive-based" economics, if they are sound in principle of course. I prefer them over regulatory type of manipulations, since the regulations are often set by the wrong people.
I'm all for getting old obsolete dangerous polluting junk off the road but not of disposing of clean, useful safe vehicles just because they don't get good gas mileage. That's crazy.
Here's a number i'd like to know:
How many barrels of oil does it take to produce one new car?
From This Page Right Here
3. How Much Energy is Used to Construct a Car?
I. Calculations as Done By Matt Savinar:
The average car will consume during its construction 10% of the energy used during its lifetime.
Source: "Automobiles: Manufacture Versus Use," published by the Institute for Lifecycle Environmental Assesment;
How many barrels of oil does it take to equal the energy consumed during 10% of a car’s lifetime? Let's see:
In the US, the average car has a median lifetime of 17 years. (Source: Matt Creenson, Associated Press: "Is This the Beginning of the End?" )
On average, a car will consume 750 gallons of gas per year.
17 years x 750 gallons of gas per year = 12,750 gallons of gas consumed during the median lifetime of an American car;
1 gallon of gas = 125,000 BTUs;
12,750 gallons consumed x 125,000 BTUs per gallon = 1,593,750,000 BTU’s consumed during the median lifetime of an American car.
1,593,750,000 x 10% = 15,9375,000 BTUs consumed during the car’s construction;
159,375,000 BTUs consumed during construction divided by 5,800,000 BTU’s in one barrel of oil = slightly more than 27 barrels of oil. Twenty seven barrels of oil (42 gallons of oil per barrel) contain 1,142 gallon of oil.
Slightly more than 27 barrels, apparently.
Now I must point out that I don't agree with the figure of a car's median lifetime being 17 years. I always thought it was more like 12 or so.
But ANYWAY -- 1250 gallons is 2 + years of driving for me.
So if so & so traded in his 14 mpg truck to buy a new 24 mpg car, he'd need to drive it 4 years or a bit more to break even on the expenditure of energy to build the new car.
Something like that, roughly.
I would agree. Extend that to used cars. Now is time to change mindset of got-to-have-it-now Americans. We will suffer in short term, but it would be best for all when cars, new or used, can only be bought for cash. Maybe Geitner and Summers can do this.
I bought first and a number of cars afterwards with cash. Then, financed some. Saw error of ways and last many number of our cars (new) bought for cash. When did the goofy idea of car financing start? Would guess that until maybe 1950's, had to have cash to buy a car at a dealers.
Do the figures mentioned in the messages above take into consideration the energy required to mine, transport and process the iron ore and other raw materials involved in the manufacture of a car? How about the energy required to transport cars from the factories to the dealerships, and the energy used by sales people? And let's remember that "clunkers" are usually driven fewer miles per year than newer cars.
Unless this is mainly a political issue, all of this energy consumption, and the carbon footprint associated with it, must be factored into the debate on whether to retire cars early, and replace them with new cars. Maybe, after all is said and done, less energy is expended and pollution is produced by letting the marketplace decide when cars should be scrapped and replaced, rather than by social engineers and politicians.
But disposing of a perfectly good car that happens to get 14 mpg WHILE STILL meeting emissions requirements?---that makes little sense to me either. That's not "green", that's politics.
It's highly improbable that a '88 Taurus running on 5 cylinders would pass the state emissions test. The owner, then, would have to decide whether it's worth repairing, so it will pass, or junking. True, such a car will never be a classic, but the issue in this forum is more one of whether this hypothetical Taurus can serve the transportation needs of a person with limited means without doing undue harm to society, or more harm than increasing car production to compensate for higher scrappage rates.
Incidentally, energy is required not only to manufacture cars, but also to scrap them.
See there, you and I totally agree on something. I would love to justify getting rid of my wife's 1990 LS400. It just passed smog with flying colors. Only has 96,000 miles. Still averages about 17 MPG even with our CA premium gas. It looks near new, and the leather is still in wonderful condition. We only carry liability for $160 per year. Not much reason to sell. Maybe give it to a needy relative. Runs like a top with original engine transmission. I don't think Lexus builds them this well anymore. It will be 20 years old this fall. It was one of the first sold in San Diego.
getting rid of a perfectly good Lexus LS400 because of its fuel mileage makes no sense to me. Cars like this should be allowed to die by attrition, as long as it doesn't turn into a gross polluter.
There would be ways to keep that theoretical Taurus on the road in Maryland. There are emissions tests in Maryland, but it varies from county to county. My Mom & stepdad live in St. Mary's county, with a population of roughly 98,000 people. No test required down there. In fact, I remember reading that they did a cost/benefit study, and calculated that after razing the land, building the facility, making people drive to the test every two years, all that time spent idling in line, and gunning the engines on the pre-OBD-II cars, the net effect would be more harm to the environment than the good received from getting the gross polluters fixed or off the road.
In contrast, my county, Prince Georges, has about 850,000 people, and an emissions test. In fact, I just had to take my '85 Silverado in on Saturday, and it failed. :sick: It scored really well on the hydrocarbons and carbon monoxide test, but was high on nitrous oxide. State standard was 5.8 gpm, and I think I came in around 8.0.
If I really wanted to, there's a way to get out of the test and not get it fixed. My truck is old enough to qualify for historic tags, which would exempt it from emissions testing. Vehicles used to have to be 25 years old to qualify for historic tags, but recently they changed it to 20 years...so that hypothetical 1988 Taurus would even qualify! There's a guy at work who put historic tags on a 1986 Pontiac T1000!
Hate to say it, but that thought actually has crossed my mind, as I don't drive the truck much anyway. It might average 3,000 miles per year. But, I'd rather do the right thing and get it fixed, so that it's running right and polluting less. Probably just needs a tuneup, anyway.
Last couple of years I lived in Crook County, had to go to obligatorry emissions test with 77 Caprice in about 1988. Put in all new tuneup parts, oil, etc. Then, determined lowest activity day at emissions facility, which happened to be nearby an interstate ramp. Drove on interstate for about 15 miles to get engine nice and warm, got off, drove straight to facility and maybe one car in front of me. I passed all emission requirements easily.
Also, it was brutally cold that Saturday morning. Temps got down to about 0F the night before...about the coldest we've had in 5 years I think. I guess the cold could have had something to do with it, although I did drive the truck around enough that it was fully warmed up.
I did get a 4 month extension, so I have until May 20 to get it re-tested.
One thing I noticed, this time around, is that the treadmill test is a lot longer. I swear the guy had the truck on that test for about 5 minutes. In the past, I think they were only 1-2 minutes. So I wonder if they're just making the tests harder, in the hopes that they make more older cars fail?
Back in 2002 I had to get my '79 5th Avenue emissions-tested. I still had an old printout from 1997, when I had a '79 Newport that had to go through the test. I compared the two, and noticed that over those 5 years, they did tighten the standard. So in 1997, an 18 year old car had an easier test to pass than a 23 year old car in 2002!
I'll have to dig out the old printouts for the Silverado, to see if they've tightened the standards any over the years.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Most "genuine" historic vehicles are kept up pretty well, and the few beaters that are pre 75 seem harmless enough around here.
A new government plan to help phase out SUVs and other aging road hogs is gaining momentum on Capitol Hill. U.S. Senators Dianne Feinstein (D-Calif.), Susan Collins (R-Maine), and Charles Schumer (D-N.Y.) have proposed the so-called "Cash for Clunkers" program which would give drivers a voucher of up to $4,500 for their old gas guzzlers. The money can then be applied toward the purchase of a more fuel-savvy vehicle.
According to The Detroit News, drivers will have a chance to buy a used or new car "with a fuel economy rating that exceeds federal targets for that class of vehicle by at least 25 percent. The vehicle must have a manufacturer suggested retail price of less than $45,000 and be a 2004 model or later." Meanwhile, the traded clunkers have to be "drivable", registered in the U.S. and have "a when-new fuel economy rating of less than 18 miles per gallon." Lawmakers say that the program can take at least 1 million hogs off the road and save 40,000 to 80,000 barrels of oil daily in four years.
Notwithstanding the opposition from aftermarket trade groups, Cash for Clunkers can work, provided that the voucher is not a blank check to former SUV drivers to spend the money on beer and beef jerky. It can also give the American automakers -- which seem to have finally found their inner green -- a much needed financial boost. The bill "would be an important part of helping getting America's struggling automobile industry back on its feet," Sen. Feinstein said.
My understanding is that cars prior to 1975 were not yet required to be smog-compliant in California, which is why it is only the '75s and up that are regulated by the smog check program.
The clunker plan sounds like it will get lots of takers, as it is now in its preliminary form. Should do wonders to get the auto market jump-started.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)