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Gas $4 a gallon
Clunker Plan Incentive -- $3000 if you buy an economy car
Fiat 500 in Chrysler showrooms, 45 mpg (just guessing) and $15000 bucks out the door.
That would tempt a lot of people I think.
Of course, the downside of this fantasy is that there is small profit in small cars, unless they are MINIs!
And Minis aren't CHEAP small cars, anyway. If they were trying to sell a product at the price point of a Corolla or Versa, they'd probably have trouble making much money off of it, too.
The Smart, I agree---it's useless.
I know that size does not equate to quality, but I mentioned the Corolla, Civic and Golf because these models also have a reputation for high quality, although in the case of the Golf that doesn't come with reliability.
Democrats cut deal on cash-for-guzzlers measure
No special incentives for American-made or American brand vehicles
Automotive News
May 5, 2009 - 1:40 pm ET
UPDATED: 5/5/09 10:04 p.m. ET
WASHINGTON -- Democratic lawmakers have proposed a cash-for-guzzlers bill that would provide vouchers of up to $4,500 to people who trade in cars and trucks for new, more fuel-efficient vehicles, Rep. John Dingell said.
....Customers would get a $3,500 voucher if they trade in a car that gets less than 18 mpg for a new car with mileage of at least 22 mpg. Vouchers of $4,500 would be awarded if the new car gets at least 10 mpg more than the old, the statement said.
The mpg standard is the EPA's combined city-highway average as listed on a vehicle's sticker.
For same-class trade-ins for trucks and vans, the trade-in vehicle must have been manufactured in 2001 or before. But age restrictions will not apply to other vouchers for cars, according to an e-mail from Dingell's office.
And in what appears to be a major compromise among the various automotive constituencies, the current measure offers no special incentives to buy American-made or American-owned brand vehicles.
http://www.autonews.com/article/20090505/ANA05/905059977/1078
(registration link)
This whole thing is a bit of an odd duck. It's not going to do much for the domestics if it doesn't limit purchases to those brands, as all the folks on the coasts will just go out and buy their favorite new import.
It doesn't do much for the environment if it promotes trades of cars of any age, as you could trade in a relatively new car before you otherwise would have, thereby leading to increases in the energy consumption and pollution associatd with vehicle manufacture.
Not to mention the mileage standard they are applying is ludicrously low: at least 22 mpg? What a laughably low figure.
And why single out vans and trucks and say that those and only those must be older than 2001?
A very odd duck indeed.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
But it completely messes up and mangles the used car market. Congratulations - everything now is worth $4500 minimum!
What age is the cutoff? How old can the vehicle be? This worries me... Also is it only one vehicle per purchase or could I trade in 3-4 old cars to get a new one? Also, is that highway or the average? Because 10mpg better - every mpg matters. My old truck gets about 18 highway, for instance - but a TAD worse city... There's just no way it gets close to what the EPA sticker said in 1987 as well...
combined. Most compact SUVs (at least the 4cyl one's) also do better than that .
Thus, it appears to me that this proposal aims squarely at large trucks and SUVs
(introducing a bias towards the domestics by the backdoor).
If you buy into the pro-environment rationalization for the program than it must be very disturbing that the law rewards people who behaved irresponsibly (by buying a large truck) while those who behaved responsibly by buying a smaller vehicle that gets better than 18mpg combined are now left out.
Very strange indeed.
Odd but it does address the greatest couple of 'needs' IMO; offer encouragement to get the least fuel efficient vehicles off the road and help those that are buried.
What about Corvette?
Does Mr. Dingell know the meaning of "critically important?" Air and water, health, education and freedom are critically important. Further, the proposed plan is far from sensibly balanced in my opinion.
Anyhow, the following article from today's Detroit Free Press confirms what nippononly has told us, but offers a couple of additional details...
"Key House members back cash-for-clunkers plan
But cost is unclear, as is Senate response"
BY TODD SPANGLER and JUSTIN HYDE • FREE PRESS WASHINGTON STAFF • May 6, 2009
"WASHINGTON -- Key House members agreed Tuesday on a cash-for-clunkers plan intended to spark sales of newer, more fuel-efficient vehicles by giving buyers up to $4,500 for retiring older-model gas guzzlers.
Such a plan is far from a certainty: The costs were not revealed, and it was unclear how the Senate would react. But the agreement by Democratic members of the House Energy and Commerce Committee -- announced Tuesday after they met with President Barack Obama -- indicates legislation should move ahead to create the program.
U.S. Rep. John Dingell, D-Mich., who attended with Energy and Commerce Committee Chairman Henry Waxman of California, called the plan 'critically important and sensibly balanced.'
It could help replace as many as 1 million vehicles, though that's a fraction of the 250 million or more on the road in the United States.
There are no specific incentives for buying vehicles made by the Detroit Three. But provisions that encourage the swaps on older vehicles, specifically SUVs and trucks, should help U.S. manufacturers because they dominate that market.
People who drive passenger cars that get less than 18 m.p.g. (based on EPA's combined city/highway window sticker number) would have to buy a new car getting at least 22 m.p.g. to be eligible for a voucher toward the new car.
If the new car's mileage rating is at least 4 m.p.g. higher than that of the old vehicle, the buyer would get a voucher for $3,500 toward the price of the new car. If the new car's mileage is at least 10 m.p.g. higher than on the old vehicle, the voucher would be worth $4,500.
There would be incentives for small trucks, SUVs, large light-duty trucks and work trucks.
For small trucks and SUVs, the old vehicle must get less than 18 m.p.g. and the new at least 18 m.p.g. If the new vehicle's mileage is at least 2 m.p.g. more than the old, the voucher is $3,500; if it's 5 m.p.g. more or higher, the voucher would be worth $4,500.
For large light-duty trucks, the old vehicle must get less than 18 m.p.g. -- though new large trucks getting at least 15 m.p.g. are eligible for vouchers. If the new truck is at least 1 m.p.g. more efficient than the old, the voucher is worth $3,500; if 2 m.p.g. or more, the voucher is worth $4,500.
Finally, buyers would be able to trade in any pre-2002 work truck -- defined as a pickup truck or cargo van weighing from 8,500 to 10,000 pounds -- and receive a voucher worth $3,500 for a new work truck in the same or smaller weight class."
I agree it is a crazy idea. Just about as counter productive as throwing money at the dying car companies. The sooner the weak companies die, the others can get back to making money. May the best car maker win without Uncle Sam sticking his nose into the business world.
Corvette might "lose" on a technicality, because there was no 1983 model. The redesign got postponed while GM tried to work some kinks out. I think one problem was a new 4-speed automatic they were still troubleshooting. IIRC the 1984 model debuted a bit extra early, like April of '83?
What was the Corolla's first year, anyway? I think their first year in the United States was 1968, but the car was probably offered elsewhere for years before that.
There are no specific incentives for buying vehicles made by the Detroit Three. But provisions that encourage the swaps on older vehicles, specifically SUVs and trucks, should help U.S. manufacturers because they dominate that market.
So folks trading a truck or van older than 2002 don't have to improve their mpg at all? They can just go out and buy a new gas guzzler? This thing's enviro cred, which was thin at best before, just went right out the window.
And then there's the whole question of are we just using taxpayer dollars to pull forward sales, much as the automakers have done the last 7 years with crazy-cheap financing? If so, we will just be creating a new problem 3-5 years out.
andre: Extreme simplicity was at the core of the first Corolla's engineering. Introduced during 1966 in Japan, the first Corolla came to the United States in the summer of 1968 riding on a 90-inch wheelbase in two-door coupe, four-door sedan and two-door wagon body styles
Cumulative Corolla sales are over 30 million globally now, and while the prize for longest-running may be in question, the one for total sales isn't. Corolla is the #1 seller of all time, having long ago bested the VW Beetle.
http://www.edmunds.com/insideline/do/Features/articleId=94136
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
That makes it even easier for me. All the large diesel SUVs are rated 20+ MPG. My 99 Ranger and my 1990 Lexus are both rated 18 MPG or less. I think I would get rid of the Ranger. The Lexus is still a great vehicle and probably be worth more in a cash sale. Not many of them around with less than 100k miles and always garaged.
I wonder if this voucher will be paid directly to the dealers? And will it affect the tax credit buying a new diesel car or SUV. There is up to $1800 tax credit on both BMW & MB diesel SUVs.
I have a 2000 Olds Intrigue (176k miles and counting). The EPA combined mileage is 20 mpg (even though I regularly average 25-26 mpg). A 2009 Camry has a combined EPA mileage of 25 mpg, Nissan Altima is 26 mpg and Jetta Diesel is 33 mpg. The Jetta or a Fusion Hybrid would qualify me for a $4500 voucher.
In thinking more about this, I am wondering what cars built in the last ten years have an average mpg based on window sticker of 18 mpg or less. There can't be that many, can there? That would be gas guzzler penalty territory for a car. Yes, gagrice's 1990 Lexus LS400 would qualify, rated at 16/22, 18 combined, but even that one's right at the limit, and that was a guzzler in its day.
So is this law mostly going to apply to trucks and SUVs then?
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
"General Motors, in a statement released today, said it supported the measure.
"Scrappage programs implemented in other countries around the world have proven to be very successful in re-invigorating car and truck sales," the statement said.
"The approach of providing vouchers for new vehicle purchases, which is tied to getting older, less efficient vehicles off the road at the same time is a huge win for consumers, the economy and the environment."
Now there's an objective, balanced endorsement for the plan! "...A huge win!..." Win, win, win. No costs, no negatives, no tradeoffs. Only positives. GM and the pols say so.
Democrats cut deal on cash-for-guzzlers measure
No special incentives for American-made or American brand vehicles
Neil Roland
and Philip Nussel
Automotive News
May 5, 2009 - 1:40 pm ET
UPDATED: 5/5/09 10:04 p.m. ET
WASHINGTON -- Democratic lawmakers have proposed a cash-for-guzzlers bill that would provide vouchers of up to $4,500 to people who trade in cars and trucks for new, more fuel-efficient vehicles, Rep. John Dingell said.
Subscribe to Automotive News
The program, if approved by Congress and signed by President Barack Obama, would lead to about 1 million new-vehicle purchases, the Michigan Democrat said in a statement.
Customers would get a $3,500 voucher if they trade in a car that gets less than 18 mpg for a new car with mileage of at least 22 mpg. Vouchers of $4,500 would be awarded if the new car gets at least 10 mpg more than the old, the statement said.
The mpg standard is the EPA's combined city-highway average as listed on a vehicle's sticker.
For same-class trade-ins for trucks and vans, the trade-in vehicle must have been manufactured in 2001 or before. But age restrictions will not apply to other vouchers for cars, according to an e-mail from Dingell's office.
And in what appears to be a major compromise among the various automotive constituencies, the current measure offers no special incentives to buy American-made or American-owned brand vehicles.
The U.S. auto industry hopes such a program here can mirror its success in several countries, particularly Germany. So far this year U.S. vehicle sales have plunged 37.4 percent. But Germany, which passed a similar measure in February, posted gains of 19 percent in April and 40 percent in March.
General Motors, in a statement released today, said it supported the measure.
"Scrappage programs implemented in other countries around the world have proven to be very successful in re-invigorating car and truck sales," the statement said.
"The approach of providing vouchers for new vehicle purchases, which is tied to getting older, less efficient vehicles off the road at the same time is a huge win for consumers, the economy and the environment."
UAW President Ron Gettelfinger also endorsed the measure.
"Congress should act right away on this high-priority measure, to deliver an immediate stimulus to our auto industry and to keep Americans working," Gettelfinger said in a statement.
Dingell, Waxman play key roles
"This program will spur consumer demand for new vehicles, thereby injecting much-needed cash into our ailing domestic automakers," Dingell said.
It also would result "in meaningful reductions in energy use by American drivers," he said.
Vouchers would also be offered for swaps of small trucks and SUVs, large light-duty trucks and work trucks, the statement said. The program would be authorized for up to a year.
The agreement was brokered by Dingell and five other Democrats, including Rep. Ed Markey of Massachusetts and Rep. Henry Waxman of California, chairman of the House Energy and Commerce Committee.
A Dingell spokesman did not immediately respond to a question of when and in what form the legislation would be introduced.
Then, when the new owners figure out that domestics run as good as foreign cars, they'll have no reason to shop foreign again.
It's brilliant.
Any criticism of the Clunker Plan is going to have to be an economic one. Attacking the environment these days on ideological grounds is a suicide mission politically. You gotta have your numbers in order. Standing in front of environmental legislation and jumping up and down shouting Tree Hugger! is going to get you run over and out of office.
On the other hand, pointing out the pros and cons of Clunker Plans in other western democracies is not a bad idea at all.
Americans are very bad at long term planning. We've all heard this, and basically it is true despite the generalization.
But viewing things with the somewhat brutal clarity of a bespectacled economist is sometimes not politically viable. e.g. -- give all 5 year old poor kids a free education because it is cheaper than putting them in prison.
Try and make that one fly!
Same for the various Clunker Plans. Short term it does screw some people. Long term, maybe not a bad idea.
I dunno, I haven't thought this thing out nearly enough. Just throwing out ideas.
They are still gas guzzlers 20 years later. The current LS is rated 16/24 for a combined 19 MPG. Not much progress at Lexus. Even the LS hybrid is only good for 21 MPG.
I'm thinking we could ship all these clunkers down to Cuba as a goodwill gesture. It would raise their fleet average by about 50 years and give them a lot 1950s Detroit Iron to sell on the scrap market. Even my 20 year old Lexus is not a dirty car. Most people just do not realize it is the gas and diesel formula that has improved the air. The gain from LEV to SULEV is insignificant at best.
The legislation, as currently written, only offers vouchers to owners of cars that get LESS THAN 18 mpg.
This is the exact type of car they should want off the road, but it's one MPG higher than the limit.
Why wouldn't they take the $4500? If there's no scrappage requirement, someone else will buy their Explorer and drive it for a few more years. The environmental credentials of this thing are VERY dubious at best.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Yes, but it's a crucial difference in light of this proposal. Your LS would qualify for the incentive, but none of the LS430s would, because they make 19 mpg combined, and the limit for the voucher is 18.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Unfair I think.What about folks who bought smaller fuel efficient cars before 01.Why are they penalised?
Folks who got a gas guzzler are being rewarded but folks who got a fuel efficient car are being penalized and neglected?
I think it should apply to all cars before 2001 irrespective of the epa mileage.
Should be fair for all?
It will never be fair. That just does not happen. I wonder how many people are buying $500 clunkers in hopes of cashing in when it passes?
My '99 Sonoma is rated 17 combined. It has the 6. It gave me 25.5 mpg on 1200 mile trip back from Fl. where I bought it. I would need to get 22 mpg from the new one to get a voucher. Can I give up the truck and get a car and still qualify? I am leaning toward a 4 cyl Malibu. What GM truck gets 22? An L5 Colorado?
If the new car's mileage rating is at least 4 m.p.g. higher than that of the old vehicle, the buyer would get a voucher for $3,500 toward the price of the new car. If the new car's mileage is at least 10 m.p.g. higher than on the old vehicle, the voucher would be worth $4,500.
These criteria, assuming that they're final, allow buyers to trade just about any BOF vehicle for any non-BOF vehicle from any maker in the market now. Heck one could trade a gas-guzzling Ranger and apply the $4500 toward a Corvette!!!
IMO yes. This is just a one-year crutch to pass several billions to the vehicle makers, that's why Dingell is for it so strongly. The Feds could have just written 10 checks to the vehicle makers here and handed them out in Detroit, Torrance and Nashville ... but ... by going about it in this way it encourages the buying public to get back into the market. Doing it this way employs more people. It's stimulus but it's smartly done. IMO.
It's being done in this year when the industry is in an abysmal place. The industry needs the boost. The hope and expectation is that it will level off this deep plunge and not be needed next year when the market picks up from the abyss to some relatively elevated level of mediocre.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Does the trade have to be car-for-car and truck-for-truck, though? FWIW, I did some perusing on the EPA's website, and even using the new, downrated EPA estimates, there are precious few cars that get below 18 mpg combined. The 1985-89 Gran Fury/Diplomat/5th Ave are below that, around 16-17 I believe. The 1985 Fleetwood Brougham is, too. And so is any 1990-93 full-sized GM RWD car, when equipped with the optional 350.
However, if you use the actual window sticker ratings for those cars, I think the only one that falls below 18 is the 1990 Fleetwood Brougham, when equipped with the 350. It comes in at 17 combined. The rest of those cars I mentioned are right at 18. And I have a feeling that the gov't is going to get cute on us and make us go by window stickers and not the updated estimates, which is going to make it harder to do an apples-to-apples comparison between a 1985-2007 car and a 2008 and newer (I think they published both numbers on the window sticker in 2007 though).
Oh yeah, just about any RWD ex-police car will also qualify. My departed '89 Gran Fury is rated at 11/14 with a combined 12, under the new ratings. The original rating was 13/15, with a combined of 14. I'd usually get around 10-13 around town with it, but could break 20 on the highway.
bodomo: This is till just a proposal at this point, but if it passed the voucher would be in addition to the value of your trade and any incentives the manufacturer is offering on the new car you purchase. Or do I have it wrong everyone?
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Agreed. Obama wants to open things up between US and Cuba. But, the term "clunker" has to be banished. Should be something like "pre-owned" or "pre-driven".
US could strike some kind of deal with Cuba to exchange something of what they have in abundance for our pre-owned cars/vehicles. The Cubans will of course need parts to keep the vehicles going for another 50 years, so that would be good stimulus for US parts industries, assuming Cuba can pay for these parts somehow. Don't forget training. Their technicians/mechanics will have to be brought up-to-date on computer modules, fuel injection, emissions, etc. More opportunities for American trainers to go down there and run classes.
the thing to remember is this is just the House version of the bill. It probably will change before the final version.
Plus the car must have combined city and highway epa rating of 18 less.If more than 18 ,then out of luck.
So it depends on the final details of the bill.
I'm solidly against it, though, as it raises the cost of older and classic parts cars and donors to $3500, minimum. That 1990s Buick that's worth not even $500? Now $3500! That old Mercedes that you might want to restore? Was $1000-$2000 - now it's $3500. That old 1960s Ford that's mostly rusted but runs? $4500!
There is no free lunch, and this will also cause a great number of future classics to be unobtainable out of cost to get replacement parts/vehicles, or just rarity since they'll all be crushed. If I wanted a new car but could buy a used one for $2000 and crush it for a net $2500 off of my purchase price...
This will essentially create a "tax" on used car values for the poor, the collectors, and others(like the 4x4/off-road groups) They implemented such a program in California years ago and sure enough - the prices of used cars all jumped up to the payout amount(about $800 last I checked).