Cash for Clunkers - Good or Bad Idea?

chellew

Well if its any consolation, the Honda Odyssey doesn't qualify, because it doesn't get 22 mpg avg or better. They have lumped the minivans in with the cars for new vehicle qualification, and the only new minivan that gets that mpg is the Mazda 5, which is a tiny 4 cylinder one that you probably wouldn't have been happy with, esp compared to that Honda!

fintail

Last week a local news show used a stock photo of a 70s Seville as its "Cash for Clunkers" story background. The story tonight, about how the regulation has become reality, featured an image of an early 80s Toronado. Someone doesn't like old GM cars...

94gs

Hi Steve,

"Yeah, I see what you mean, but I see four models there. If yours is the Acura Legend 6 cyl, 3.2 L, Automatic 4-spd, (PRE-CAT) (FFS), Premium, then that comes in at 18 mpg and should qualify from the way I read the FAQ. "

I just checked http://www.fueleconomy.gov/feg/findacar.htm again.

The agency changed the rating for all '94 and '95 Acura Legends to be 19mpg (there were two ratings (19mpg and 18mpg) before). It seems the agency can still change the numbers.

You better remove your '95 Legend' from your list to avoid confusing the readers.

stever

The '94 and '95 "Acura Legend 6 cyl, 3.2 L, Automatic 4-spd, (PRE-CAT) (FFS), Premium" both still show up as 18 combined for me. It should be the last of 4 models in the list there.

I agree it is confusing.

btmoore

in H. R. 2751 section 2.i.8.B reads

(8) the term ‘new fuel efficient automobile’ means an automobile described in paragraph (1), (2), (3), or (4)--
...
(B) that carries a manufacturer’s suggested retail price of $45,000 or less;

So, does that mean the MSRP of the base automobile or is that the total MSRP including options, and what about destination charges? This makes a hugh difference in what car I might get. For example of a borderline case, the MSRP on the Lexus RX350h AWD is $43,250 and has a destination charge of $875. If I want add the option package that provides a moonroof that is an additional $4,700 MSRP or the Nav system @ 2,440 will move the total MSRP above $45000, but the original vehicle is under the MSRP limit of $45,000. I have been looking at many different autos that will force me to trim options which seems rather silly just to make it under MRSP cap. Anyone know how this will be interpreted? I hope the MSRP is on the base and does not include the options. I look forward to retiring my hoopty a 94 Olds Bravada, still runs well but it has developed interesting patina over the years.

Thanks,

B

killahbeez

does the cash for clunkers program work for leasing a new car.

Example. I traid in my 1989 BMW 325i with a govt. fuel EPA combined which is 18 MPG and get $4500 cedit towards a lease of a 2009 MINI cooper with an EPA of 28 MPG? If so this would be an amazing lease deal.

So is this only for buying a new car or can it be used towards a lease?

hpmctorque

As you probably know, those cars are too old to qualify for this plan. That begs the question of why the trade-ins must be model year '85 or newer, when cars from the '73-'84 period generally burn more fuel than the newer models? What's the logic of excluding vehicles that, with some exceptions, guzzle more than the '85 and newer ones?

jess111

I am also wondering how to figure out the MPG of my 1994 Honda Accord, which I'd like to trade in using the Cash for Clunkers voucher. Any advice?

joegiant

Check out Senator Stabenow's press release yesterday. About half way through it concerning "eligible vehicles" it states they " Not be more than 25 years old with historic or aesthetic value. These vehicles are valued by hobbyists or are a valuable source of restoration parts." So there you have it! Gotta love these politicians. You were searching for common sense on this bill 'torque. Not gonna find it. It's DC we're talkin' 'bout!!!

PS Thank goodness ol' Bessie is only 22. You spry $4500 babe in the making... :shades:

srs_49

Thank goodness ol' Bessie is only 22. You spry $4500 babe in the making...

I know - so's mine ('87 BMW). Unfortunately, its combined 21 mpg makes it ineligible for the CFC program.

Should have kept the '94 Deville instead of passing it on to my son. Since I only paid $4500 for it, I would have broken even on it with this program :P

andre1969

What's the logic of excluding vehicles that, with some exceptions, guzzle more than the '85 and newer ones?

My guess is that it's something as simple as the fact that they don't have adjusted EPA numbers for 1984 and older cars. You can find the raw numbers for 1978-84 on the EPA's website at http://www.fueleconomy.gov/FEG/download.shtml, but they never did the 2007 style adjustments for them, which were re-applied back to 1985.

Also, looking through those old numbers, they listed city/highway/combined for 1978, but for 1979-83, they only list the "city" rating, not the highway or combined. For 1984 they go back to listing all three, though.

So my guess is that with the pre-1985 cars, they just don't want to go through the trouble of calculating those numbers to come up with a comparable "combined" rating.

FWIW, my '79 NYer, with its 360-2bbl, has a city rating of 14. Yeah, I WISH!! :P For 1978, my style of New Yorker didn't exist yet, but it would roughly equate to the midsized cars, like the Cordoba, Fury, Monaco, Magnum, etc. There, the 360-2bbl was rated at 14/22, with a combined of 17.

According to my mileage log, I actually did get around 22 mpg, twice. However, I have a feeling that what happened was the fuel nozzle just cut off early, and I didn't get a truly full tank.

gagrice

If everyone goes for the $4500 trade-in it will only be about 222,000 vehicles. How is that going to really change the dynamic of this down auto market? Only 7.5% can be category 3 trucks which are the biggest polluters. It does not look like you can trade that old truck in on a new car. Like trade-in is what this part is saying.

(b) Qualifications for and Value of Vouchers- A voucher issued under the Program shall have a value that may be applied to offset the purchase price or lease price for a qualifying lease of a new fuel efficient automobile as follows:

(1) $3,500 VALUE- The voucher may be used to offset the purchase price or lease price of the new fuel efficient automobile by $3,500 if--

(A) the new fuel efficient automobile is a passenger automobile and the combined fuel economy value of such automobile is at least 4 miles per gallon higher than the combined fuel economy value of the eligible trade-in vehicle;

(B) the new fuel efficient automobile is a category 1 truck and the combined fuel economy value of such truck is at least 2 miles per gallon higher than the combined fuel economy value of the eligible trade-in vehicle;

(C) the new fuel efficient automobile is a category 2 truck that has a combined fuel economy value of at least 15 miles per gallon and--

(i) the eligible trade-in vehicle is a category 2 truck and the combined fuel economy value of the new fuel efficient automobile is at least 1 mile per gallon higher than the combined fuel economy value of the eligible trade-in vehicle; or

(ii) the eligible trade-in vehicle is a category 3 truck of model year 2001 or earlier; or

(D) the new fuel efficient automobile is a category 3 truck and the eligible trade-in vehicle is a category 3 truck of model year of 2001 or earlier and is of similar size or larger than the new fuel efficient automobile as determined in a manner prescribed by the Secretary.

(2) $4,500 VALUE- The voucher may be used to offset the purchase price or lease price of the new fuel efficient automobile by $4,500 if--

(A) the new fuel efficient automobile is a passenger automobile and the combined fuel economy value of such automobile is at least 10 miles per gallon higher than the combined fuel economy value of the eligible trade-in vehicle;

(B) the new fuel efficient automobile is a category 1 truck and the combined fuel economy value of such truck is at least 5 miles per gallon higher than the combined fuel economy value of the eligible trade-in vehicle; or

(C) the new fuel efficient automobile is a category 2 truck that has a combined fuel economy value of at least 15 miles per gallon and the combined fuel economy value of such truck is at least 2 miles per gallon higher than the combined fuel economy value of the eligible trade-in vehicle and the eligible trade-in vehicle is a category 2 truck.

gagrice

(II) has not been, and will not be, sold, leased, exchanged, or otherwise disposed of for use as an automobile in the United States or in any other country.

gagrice

With all the hoops to jump through will a dealer figure it is worth the expense?

(3) require the dealer to use the voucher in addition to any other rebate or discount advertised by the dealer or offered by the manufacturer for the new fuel efficient automobile and prohibit the dealer from using the voucher to offset any such other rebate or discount;

(4) require dealers to disclose to the person trading in an eligible trade in vehicle the best estimate of the scrappage value of such vehicle;

(5) require dealers to accept on behalf of the United States, and Transfer to the Secretary of the Treasury, the amount paid for scrappage of the vehicle up to $60;

(6) permit the dealer to retain any amounts paid to the dealer for scrappage of the automobile in excess of the $60 amount referred to in paragraph (5) and designate $50 of such excess as payment for any administrative costs to the dealer associated with participation in the Program;

(7) clarify that dealers will not be reimbursed for any storage fees or other costs associated with their custodial handling of the eligible trade-in vehicle;

That's not all. The dealer can only transfer to a company that will comply with the following:

(A) requirements for the removal and appropriate disposition of refrigerants, antifreeze, lead products, mercury switches, and such other toxic or hazardous vehicle components prior to the crushing or shredding of an eligible trade-in vehicle, in accordance with rules established by the Secretary in consultation with the Administrator of the Environmental Protection Agency, and in accordance with other applicable Federal or State requirements;

So the dealer cannot gouge any of the voucher. They pay $60 back to the Feds for the supposed price they will get for this clunker. Most places I know charge you to haul off your clunker. My guess no one will want these tainted vehicles with a book of regulations required to deal with them. So the dealer has them taking up precious lot space, that s already overflowing with unsold vehicles. Good Luck KDH, you will need it with this lame bill.

lemko

I'd say my 1988 Buick Park Avenue was more fuel-efficient than a lot of modern cars. It didn't have all that stuff that's so "necessary" these days to bulk-up the weight. My 1989 Cadillac Brougham is probably as or more fuel-efficient than my smaller 2007 Cadillac DTS Performance which feels like it weighs more than the bigger car.

lemko

I had a 1994 Cadillac DeVille with the 4.9 litre V-8. Did yours have the 4.9 or the Northstar? I felt the 4.9 delivered pretty good fuel economy. It had a little feature that showed "Instant MPG." It was cool letting the car coast down a long hill and seeing an Instant MPG displayed of 70.

andre1969

It was cool letting the car coast down a long hill and seeing an Instant MPG displayed of 70.

I used to do that with my '88 LeBaron. It would actually register as high as 99 mpg, which was the limit of the display. My buddy TJ, the one with the Mark V, also has a "2001.5" Passat with a trip computer, and he said that the computer can actually display an "infinity" symbol! I think with modern cars, if you coast down a hill in gear, but with your foot completely off the gas pedal, the fuel supply either gets cut off completely or extremely restricted, and the car just relies almost completely on momentum.

Supposedly with modern cars, you actually use more gas if you shift into neutral on a long downhill slope.

kernick

I don't think your scheme would appeal to successful criminals.

There seem to be a lot of non-successful criminals around though. People who will commit petty burglary for $100 or so; people who are looking for enough drug-money for today and tomorrow.

It's much easier to just find people who want to torch the cars they already own---there are plenty of them out there who are belly up on loans.

Agree that people will torch their own newer car that has full insurance and is worth some substantial amount. People who have clunkers however are unlikely to carry more than basic liability insurance. I doubt many people have loans and collision and comprehensive insurance on vehicles <$1,000 value. So you don't torch the clunker, you use that to get the new car, which then is fully insured, and collect on that.

Mr_Shiftright

Another reason is that there really aren't many pre 1985 vehicles on the road as daily single-use vehicles anymore, relative to ALL the vehicles on the road I mean. the pre 1985 cars you might see are probably 99% hobby cars and second or third cars.

I think 1985 is an excellent cut-off date. Most of the late 70s, early 80s "less-than-wonderful era" vehicles have died, and even junkyards don't want the carcasses (space is too valuable and parts sales too slim for these clunkers) whereas I think mid 80s on up is the type of car that is still been driven regularly and that a wrecking yard can make some money on.

srs_49

It was the Northstar. Really wasn't my kind of car, but I had to get something quick when my daughter totaled her's and I let her have my Sentra to drive. In my normal commute it gave me around 16 mpg, maybe 18. On the road, 22-24mpg.

I pegged the gas mileage display on our van at 99.9 mpg once. Filled up right at an on ramp to the interstate, and the ramp was on a long, gradual downhill . So for the first quarter mile, 99.9 mpg!

fintail

I see no problem with letting in some ratty old vehicles from that era - few from those terrible years have or will ever have any collectible or historical value. It must be all about data for the mpg requirements.

Looks like a bunch of old tanks just got saved from death :shades:

stever

That begs the question of why the trade-ins must be model year '85 or newer

Fans of older car have their own lobby:

"SEMA was able to mitigate the program&#146;s effects by convincing lawmakers to include a requirement that the trade-in vehicle be a model year 1984 or newer vehicle. The provision helps safeguard older vehicles that may possess &#145;historic or aesthetic value&#146; and are irreplaceable to hobbyists as a source of restoration parts. The measure also allows all parts to be recycled except the engine. Lawmakers were convinced to permit the drive train to be recycled if the transmission, drive shaft or rear end are sold as separate parts."

SEMA WINS PROTECTION FOR COLLECTOR CARS AND PARTS

Mr_Shiftright

Exactly. Pre 1984 cars are hobby cars. They aren't polluters used every day.

stever

Ya, they're just unsafe polluters used on weekends. :P

stever

"Final details will be sorted out in the next month, but the program is expected to be up and running by early August and run through October."

Cash For Clunkers Clears Congress, Vouchers Expected in Early August (Edmunds Daily)

kernick

If that's correct, hooray! $1B is chump-change. Even if it all went to GM, which it won't as much of the $ will go to foreign manufacturers, GM or Chrysler would blow right thru that money. :P

dave8697

My '96 Riv idles at 550. When I first got it I tried putting it in neutral to see what rpm's fall to while getting off an interstate. They fell from around 1800 to around 1300. I wondered why not all the way to 550. My guess is it knows what you are trying to do and discourages it, and also reduces the shock to the trans and engine when you put it back into gear at 50 mph or so. Maybe it is a safety feature for those who inadvertantly shift into N on the interstate and want to throw it back into D when they discover their error. When I put it back into D at about 40 mph, the rpm hardly had any adjustment and I didn't feel much.

dave8697

Everything I own is on the clunker list, including the one I just sold for $700. I have one out of 5 not on the list and it has a trade-in value of $430, except it is rated at 19 mpg.

I drove the '87 Astro 2-3 times a week and put 3000-4000 miles a year on it in until late 2008. When I drove it, I would rarely see any other $700 vehicles on the road as most people had their 17 mpg vehicles parked during $4 gas. If you afford to drive, you could afford better than an '87 Astro. I remember when I was looking for a part for my '86 and the junkyard said that all vehicles through the early 90's were sent off to be melted down.

jeffyscott

Is edmunds certain that the 18 mpg criterion is based on the revised EPA figures that show up on fueleconomy.gov? What is their source for this? I've not noticed anything specific in the bills that states this, they all just say the number 18 without stating how it is to be measured.

I have a 1997 Windstar with revised rating of 17 mpg, but original sticker mpg of 19, so this is of some interest to me.

kdhspyder

From the seller's perspective....can't wait for this to begin to take effect. The main criteria for any sales organization is a need warm bodies with an incentive to buy. The more the merrier, the owners are chomping at the bit for implementation.

We can get a clunker to the crusher for under $30.

jeffyscott

Last time I junked a car (July 2007) I was paid about $100 for it and that was with a tow truck having to come and pick it up.

stever

This is supposedly the final relevant text:

(7) the term `eligible trade-in vehicle' means an automobile or a work truck (as such terms are defined in section 32901(a) of title 49, United States Code) that, at the time it is presented for trade-in under this section--

(A) is in drivable condition;

(B) has been continuously insured consistent with the applicable State law and registered to the same owner for a period of not less than 1 year immediately prior to such trade-in;

(C) was manufactured less than 25 years before the date of the trade-in; and

(D) in the case of an automobile, has a combined fuel economy value of 18 miles per gallon or less;

Thomas.loc.gov

You have a van (a category 2 vehicle). So maybe there's no combined mpg requirement for you to meet, you just have to hit the minimum mpg increase to qualify?

Usual disclaimers. I haven't been able to make heads or tails of it. :shades:

hpmctorque

I'll bet odds that this plan will either be extended, or it'll be followed by another one in the not-too-distant future. Regardless of how it goes, it'll be hailed as a huge success.

plekto

So are they going off of the original VIN or what transmission/engine the vehicle has on it?

Say, if the original vehicle had a manual and it currently has an automatic(and is registered as such) in it or vice-versa.

Also, why not have a rolling target number? ie - 10mpg higher than your current vehicle? I know of a LOT of vehicles in the 18-20mpg range that are absolute rubbish that many people would love to get rid of. Or just make it any car up to 20mpg for a 30mpg+ car.

As it is, my old truck which is a huge polluter gets 19mpg(officially - total rubbish, though, since it's those "reworked" numbers) and isn't going to likely be eligible. Yet it's the very definition of an old polluting and fuel guzzling vehicle.

:sick:

EDIT - actual mpg I get is 14/19. Average about 16-17. The manufacturer in 1987 flat-out lied when they said it got 24mpg highway.

Mr_Shiftright

Well regardless, it beats "trickle-down" economics by a fair amount. Not much trickled apparently, except in the form of cheap credit.

stever

I see we're both editing. If a van owner wants to buy a car and get the full $4,500 voucher, then a 10 mpg improvement is the "rolling" target.

Anyone else want to try to decipher the language of the bill at my link?

It says an "automobile, has a combined fuel economy value of 18 miles per gallon" then links to another part of the US Code to define automobile. That section seems to define an automobile as anything with 4 wheels licensed for street use that's under 6,000 pounds gross vehicle weight. US Code

ashbury

Does a 1994 4wd ford explorer fall under the classification of a light duty truck?

chewieyak

Good question. I just want to know if I trade in an SUV do I have to get another SUV? I want a truck but if I get that I am afraid I won't get the rebate.

jeffyscott

Usual disclaimers. I haven't been able to make heads or tails of it.

That's just it, I have not found anything clear either and yet Edmunds seems to think they have it figured out to the point of publishing a list of qualifying vehicles...how are they so certain? I'm skeptical, as there seems to be no definite documentation of the definition of 18 mpg that is to be used. At different times I have read that it was to be based on the unadjusted CAFE figures, the original sticker mpg, or the new adjusted numbers at fueleconomy.gov.

It may even be that the law is silent on this and the definition will be determined only when the adminatrative rules to implement the law are created...though if they are to put out definitive information within 30 days of signing, that would not seem to allow for creating implementation rules.

gagrice

Best bet is to take in the vehicle you want to trade and see what the dealer says. They are the ones that will collect the $4500 from Barry. If they screw up you already have the new vehicle and they have your old one. It should be pretty easy for the buyer. The seller may end up pulling their hair out collecting from the Feds. If it is run anything like Medicare and other Federal programs.

gagrice

My guess is it will slow your sales down till the program is implemented. Then a mad rush in August for the few people that will get rid of their clunker. Should make for a real slow July sales month. Unless the dealer takes a chance that the sale will be retroactive to a given date.

I think the dealer has to send Sam $60 for the clunker. The dealer gets to keep anything over that they get from the qualified wrecking yard. Cars that have to destroy the engine may not bring much at salvage.

As I said before, good luck, the dealers are going to need it.

seekerbargain

Here's a link to a video that explains the bill fairly well. Fast forward a couple of minutes to get to the story: http://www.autonews.com/article/20090619/VIDEO/306199953/1219

As best as I can tell from reading the bill on the House website, the program will not be retroactive.

The problem I have with it is: not many older cars got 18 mpg or less. My '87 Bonneville (yes, 22 yrs old) has a combined EPA (revised) rating of 19 mpg

kdhspyder

Yep. July is normally a good but slow month. August is the best month in the year for sales, always has been. It could be a booming one this year.

Our inventory has doubled in the last 30 days in anticipation of August being a boomer!!! However no vehicles from Japan except the G3 Prius and many of them are presold anyway.

plekto

The problem I have with it is: not many older cars got 18 mpg or less. My '87 Bonneville (yes, 22 yrs old) has a combined EPA (revised) rating of 19 mpg

Exactly. I think what this really is is a back-door gimmie to all of the fleet and rental agencies to drop a lot of their Suburbans and Vans. I'd expect corporate interests to eat up a large chunk of the total number of vouchers right off.

stephen987

That's an angle I hadn't considered, plekto. How many of those do you suppose are older vehicles run by local operations, regional shuttle fleets, etc.?

cheshire_milk

"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...
Yeah. I USED to think that the sudden destruction of Wash., D.C., would be a BAD thing.

94gs

I don't know rental companies keep old clunkers. Who is going to rent an old clunker from a rental car company? I know I won't.

BTW, the list published by Edmunds is not an official list. It does not make sense to me that 95 Legend is qualified and 94 or 93 don't. It's the same car with a different vintage. And new vintage has LOWER mpg than an old vintage same car? It does not make sense.

jeffyscott

I'll bet odds that this plan will either be extended, or it'll be followed by another one in the not-too-distant future. Regardless of how it goes,

With the comments here about expectations of a mad rush to grab this money during the now very limited time that this is scheduled for, I'm starting to think maybe the deals are not going to be that great anyway and it might make sense to bank on an extension or something.

cheshire_milk

If you fall for this deal, then you have just lost $3500 to $4500 in bargaining power with the dealer.

hpmctorque

Oh well, yeah, I agree with you, Shifty, that in the scheme of things, cash-for-clunkers isn't a big deal for the nation. It's small potatoes compared to war and peace issues, TARP and the stimulus package, or universal health care. However, in the context of auto industry policy and it's effects on consumers and taxpayers, cash-for-clunkers is a relatively important and timely matter. The fact that we'll soon have 1,000 messages on this topic supports this view.

Also, I find it difficult to justify one ill conceived policy, just because there are others that are worse. That's somewhat like defending someone who, say, picks a fist fight by saying, oh well, that's not so bad compared with the murder that occurred nearby last night.