Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
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It's been a bit lost in the news, but you can also do a 5 year lease on a new car instead of buying it. I don't know how many clunker owners would be interested in that option.
I don't think it is actually all that clear. If a vehicle meets the definition of eligible trade-in vehicle it would need to have been continuously insured and registered to the same owner for a period of not less than 1 year immediately prior to such trade-in. But I'm not seeing anything that clearly states that the buyer of the new vehicle has to be the owner of the trade-in.
I'd wait and see what the administrative rules say, those should be much more specific and detailed. If it turns out to matter, I wonder if it will be possible to add her to the title as a joint owner of the car being traded in without violating the 1 year ownership thing? These sorts of questions will need to wait for the rules, I think.
Which brings me to your 250k number '987. Based on your pronoun, I'm guessing WE are on our way. The two of us are in. Only 249,998 more vouchers to be sent out. Ya better get in line now ya'll. Seats are going fast.
A. The vehicle is 'worth' $3300 in trade and maybe $5500 at retail. The dealer gives the buyer $3500 as a trade value so that he, the dealer, can keep it and resell it himself and thus make $1000 or $1500. The buyer doesn't care because he/she gets $3500 either way. Nothing to see here, move on.
Add in the previous list about the fact that this applies to:(as another poster stated)
..those that have a qualifying 'clunker'
..those that want to give up that 'clunker'
..those that want a new vehicle, as opposed to a used vehicle
..those that want a new more fuel efficient vehicle, as opposed to a less efficient vehicle
..those that can pay cash or qualify for a loan
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Sounds exactly like this was custom-made for commercial fleets and not for private owners.
So in theory the dealer can only keep $50 and the balance would go back to the person trading in the vehicle?
..Otherwise I could give my buddy (say $1000) to trade in a junker he has in his yard so I could get the $4500 off a new car and still keep my gas guzzler on the road...
BUT no reason you can't transfer ownership later...
Good THOUGHT, but in practice? Not so much............
Thanks
For example, the base Corvette w/manual transmission is rated at 16/26 with a combined 19 - but even if you took 15.5 and 25.5, the combined should be 20 even. Likewise, the Hyundai Genesis coupe 2.0T/6M is rated at 21/30, combined 24, even though the lowest you can calculate is 24.55.
I haven't been able to find any actual information on this on any EPA pages, and it seems relevant with the cash for clunkers program.
Fuel Economy Labeling of Motor Vehicles
I was able to confirm that the simple method jeffyscott gave is correct.
Now if you'll excuse me, I accidentally stumbled into the description of CAFE fuel economy calculations, including the ethanol-gasoline blends, and now I need to go hit my head against the wall.
There's another dirty little secret here too. Watch the incentive programs from the D3 - two of which are just emerging from BK court and need profitable sales fast in order to get back on their feet.....not to mention Toyota and Honda.
So what's your prediction? Will the automakers decrease the next round of incentives to increase profits, especially since people will be shopping with their vouchers?
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I don't think the D3 can afford to lose out on ANY potential sales at this time. My bet is big late summer incentives plus the gov't vouchers will get some people moving toward their lots and that's what's needed.
Crank up the volume on incentives, add in the voucher program (which most people will not use by the way), and have the local dealers in line for "kickbacks" and a lot of 2009s will move off the lots in August-September.
There is some pent up demand in this down market. There are many people who have put off buying a vehicle for over 6 months now and with the economy stabilizing (albeit at a low level) this could really be a boon for some beleaguered dealerships out there.
There is a need for reliable transportation that most consumers have differed for many months now. If the D3 cuts incentives now I'd be really surprised.
Regarding Cash for Guzzlers; How many people have figured out that the true ACV of the trade in is subtracted from the gov't voucher amount? I suspect consumers AND dealers will be stripping everything they can of these trade ins, as they all have to go to the crusher!
Of course in my case, I will beat the dealer down below invoice and want the full $4500 or NO DEAL. At that point his choice is to take the sure money from Sam with a wait of who knows how long, or take a chance on getting rid of the vehicle on his used car lot.
I think your premise may have some merit, the dealer may take a small hit to skip dealing with this program. I have my doubts about your perception of the value of your Ranger and I have my doubts that the dealer would take a $1000 hit rather than take the sure $4500 from the Feds.
Saw today that the voucher is a 'substitute trade-in value' and is subtracted above the taxable line. This was per article on cnn.money. That makes vouchers better than incentives by 7% in Indiana. A little hurt for state tax coffers there, but selling new cars generates a lot of state tax income.
If it's 4x4, possibly.
President Obama Signs Cash for Clunkers Legislation (AutoObserver)
Second thought. How do you all think the dealerships who just fought with the federal government, unsuccessfully btw, over the forced closure of parts of their businesses (Chrysler bankruptcy) and now being almost forced to "participate" in the program so as to not lose sales to competitors? Bet those guys are sick to their stomachs over this government intrusion into their little fiefdoms.
I'm not sure why you guys think this requres owners of junky old trucks to by "econonobxes", when their pile of junk will be worth $3500 toward a new truck with only a 2 mpg improvement.
Political posturing.
The dealerships didn't fight the govt about the closures those were the work of Chrysler and GM. The two of them have been complaining about a bloated distribution system for years. BK was their route to slimming down. Nothing involving the govt here.
Hey the dealers don't have to participate, everythng in the program is voluntary. It's a great country.
Finding a comparable PU truck today that has improved by even 2 MPG is tough. For $3500 I would just keep my PU. The fellow that works for me and lives in Mexico would give me $3500 in a heartbeat. He cannot find a PU in TJ that runs for $3500. He wants it with the $800 lumber rack for that price. Which I would remove before I trade the truck on a new one under the C4C. For me accepting less than $4500 from the plan is not going to happen. I would give it to a family member or sell it to Ricardo.
The 18 gallons per mile limit is calculated based on when the car was new or it is estimated on its current condition? If it is based on new condition, then this program does not make sense at all.. I have 1986 Mercury Sable and it is according to the manual has 20mpg. Well maybe in 1986 it was that, but now 23 years later it is much worst.. I was thinking to just get rid of it - donate it or just give it up to the junk yard since I'm planning to buy a new car and this one will not cost anything if I decide to trade it in, but when I heard about this program, I thought that I could take advantage of it...
Does anybody know what MPG is taken into consideration?
Thanks!
I'm sure car salesmen will face a lot of questions like this--"I know what the government says, but I've never gotten over 18 mpg with this Taurus/Sable/LeSabre/Grand Caravan in my life." Customers who don't know exactly what to expect will feel cheated--just as those who are convinced that a dealership can sell a $20000 car for $12k always do.
It is totaly idiotic...
Don’t blame the customer - blame the dealer for that. For the last 10 years or so - MSRP amount is completely irrelevant for majority of cars that are sold in US. It is completely useless as depreciation value - which is calculated based on MSRP of the car and is not based on the REAL price of the car. The car is worth for what is sold - not what it was listed for. So your $20,000 could be $200,000 - it does not matter. If it sold for $13,000 then the car worth $13,000 and the customer should expect to buy it for 13K
It is totaly idiotic...
Think of it this way: how would you prove to a dealer, or to a government office, that your car gets less than the EPA mileage, or less than any other '86 Sable?
That's why they use the EPA mileage. It's at least measured under controlled, identical conditions, so it is a useful (but admittedly somewhat flawed) method of comparing the economy of different cars.