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Cash for Clunkers - Good or Bad Idea?

hpmctorquehpmctorque Posts: 4,600
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.


  • steverstever Posts: 52,462
    I'm in - sign me up. Especially since my 10 year old minivan is only worth maybe $1500 on trade-in.
  • hpmctorquehpmctorque Posts: 4,600
    "I'm in - sign me up."

    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.
  • gagricegagrice Pahrump, NevadaPosts: 31,432
    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?
  • andre1969andre1969 Posts: 23,534
    but it looks appropo here, too. If this is the plan I'm thinking of, the $4500 only applies to vehicles model year 2002 and newer, that are EPA-rated 18 mpg or lower. That 18 mpg is according to the original window sticker, so if it was originally rated at 19, but has been downrated to, say, 17 with the new testing procedures recently put into place, that doesn't count.

    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.
  • hpmctorquehpmctorque Posts: 4,600
    That's an excellent example of an unintended consequence of this program, gagrice. Again, the cost of the tactic you describe would be borne by us tax payers and future generations.
  • lemkolemko Philadelphia, PAPosts: 15,306
    Not enough of an incentive for me. I'd rather keep my 1988 Buick Park Ave. If I do ever replace it, it will probably be with another old car.
  • andre1969andre1969 Posts: 23,534
    Lemko, your Park Ave wouldn't even qualify if you wanted to take advantage of this incentive, because it's still too economical. FWIW, I think that 18 mpg figure is the combined rating. I'd imagine that very few cars made in the last 25 years would get a combined rating of worse than 18 mpg. It would mainly be larger trucks and SUVs.

    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?
  • gagricegagrice Pahrump, NevadaPosts: 31,432
    It would mainly be larger trucks and SUVs.

    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:
  • dtownfbdtownfb Posts: 2,918
    I guess Congress has to feel like they are trying to do something. It still doesn't address the credit issue as many people still may not be able to qualify for a loan. Also we are at a time where people (myself included) need to tighten their belts and work on removing outstanding debt not incur more.

    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:
  • oldfarmer50oldfarmer50 Posts: 13,226
    More stupidity from Washington to urinate away taxpayer money and create a sound bite for their voting base. I wish a crack would open up in the earth and swallow up the whole bunch! :mad:

    2019 Kia Soul+, 2015 Mustang GT, 2004 Chevy Van, 2000 Chrysler Sebring convertible

  • nippononlynippononly SF Bay AreaPosts: 12,726
    currently has 2 different programs, which I think are a pretty good idea, but I don't think either one mirrors this "clunker" proposal.

    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)

  • hpmctorquehpmctorque Posts: 4,600
    "it sounds a lot better to me than throwing another umpteen billions of dollars at the automakers themselves."

    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?
  • gagricegagrice Pahrump, NevadaPosts: 31,432
    I thought about that $1000 from CA, when I had problems with the front end of our 1990 Mazda 626. It passed smog so no go. I listed it on craigslist for $1500 and got $1200 cash even with the loose front suspension.
  • explorerx4explorerx4 Central CTPosts: 13,735
    lots of mid size explorers and blazers out there rated 14-16 city/18-21 highway.
    2017 Ford Fusion SE 2017 Ford F-150 Limited
  • To replace a current 'clunker' with a newer, more fuel efficient vehicle, there is the added cost of sales tax, personal property tax (depending on State) and higher insurance rates. These costs would have to be funded by the purchaser even though they may be getting a specific amount to dump their clunker. Some may not be able to afford a newer vehicle much less the added expenses noted above.

    Regards -

    M. J. McCloskey
  • roadburnerroadburner Posts: 12,197
    More stupidity from Washington to urinate away taxpayer money and create a sound bite for their voting base. I wish a crack would open up in the earth and swallow up the whole bunch!

    My sentiments exactly, although I'd think an asteroid strike would accomplish the same thing. We can dream, anyway... ;)

    Mine: 1995 318ti Club Sport; 2014 M235i; 2009 Cooper Clubman; 1999 Wrangler; 1996 Speed Triple Challenge Cup Replica Wife's: 2015 X1 xDrive28i Son's: 2009 328i

  • gagricegagrice Pahrump, NevadaPosts: 31,432
    I'd think an asteroid strike would accomplish the same thing

    Good idea. I just hope I get to see the Smithsonian before DC gets wiped out.
  • explorerx4explorerx4 Central CTPosts: 13,735
    you have never been to DC? it's a great place.
    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.
    2017 Ford Fusion SE 2017 Ford F-150 Limited
  • gagricegagrice Pahrump, NevadaPosts: 31,432
    I would like to visit some of those places. I just hate crowds. I avoid them like the plague. So if there is some day of the year when no one else is there I may visit. I also don't stand in line. If I go into the bank and more than one person is there, I leave and come back later. Too many years of standing in the cafeteria lines at work.

    I feel the same way about the money wasted on the EPA. What a joke on US.
  • explorerx4explorerx4 Central CTPosts: 13,735
    don't worry, the lincoln is an open space and there are no lines.
    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. ;)
    2017 Ford Fusion SE 2017 Ford F-150 Limited
  • gagricegagrice Pahrump, NevadaPosts: 31,432
    DC is on my list of places to visit since retiring. I would like to take about 2 months and tour around the country. As soon as I get my diesel SUV. Although I may just drive this gas guzzling Sequoia. It is comfy and not tiring on long drives. Just too many gas stops. I don't think it qualifies as a clunker yet :blush:
  • explorerx4explorerx4 Central CTPosts: 13,735
    if you come out east, i would recommend staying outside of DC proper and taking the local mass transit into the city and back.
    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:
    2017 Ford Fusion SE 2017 Ford F-150 Limited
  • gagricegagrice Pahrump, NevadaPosts: 31,432
    How far out would you recommend? It looks like the hotels around the Smithsonian are expensive. I would probably just fly to DC rather than make that part of my US tour. I generally avoid all cities over 100k people. Too much crime and filth.
  • steverstever Posts: 52,462
    You shouldn't limit yourself to such gross misconceptions. DC's a great spot.

    In here, perhaps we could limit the discussion to figuring out how to get there in a clunker?
  • gagricegagrice Pahrump, NevadaPosts: 31,432
    DC's a great spot.

    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.
  • andre1969andre1969 Posts: 23,534
    DC's not that bad, as long as you know what areas to stay out of. And for the most part, you can tell just by looking at the area. If the houses all look run down, and you see a mob of people hanging out by the liquor store, you don't want to walk around there in the middle of the night looking like a tourist!

    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.
  • oldfarmer50oldfarmer50 Posts: 13,226
    "...I would love to visit some of those places..."

    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, 2004 Chevy Van, 2000 Chrysler Sebring convertible

  • gagricegagrice Pahrump, NevadaPosts: 31,432
    They may soon give you $4500 for that old clunker. I wonder if they will make the payments on the new car. :sick:
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 64,490
    EPA used to be a much more effective organization. It's a travesty of its former self.

    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?
  • larsblarsb Posts: 8,204
    Mr Shiftright asked, "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.
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