Cash for Clunkers - Good or Bad Idea?

kdhspyder

Clarity.

The majority of economists all over the world, every industrialized nation, have come out in favor of these stumuli measures. How can I be so certain? Every industrialzed nation on earth has some kind of stumulus package in place now.

Your 2nd paragraph has a timing error. The bailouts of the D2 took place only in the last 8 months. Their problems go back 20 years well before the bailouts. There is no causal relationship between bailouts and lack of competitive autos...at least not yet. This can be revisited in 5-10 years.

It remains to be seen if the D3 continue to make as many gas guzzlers as they did in the past. I don't think that they will. They have religion now. But if they do and if the American public ignores them then they should die a horrible death.

kdhspyder

In addition this is our own money. It's not like it's being set on fire. It's being spent on vehicles in our economy, generating business, taxes, incomes and additional revenue in our economy.

fezo

Can you put a canoe on a Prius?

You can put almost anything on anything if you try hard enough!

stever

Yeah, but I'm not quite as adventurous as I used to be. :shades:


See more Car Pictures at CarSpace.com

andre1969

Those who want to endlessly wail and knash their teeth over government spending and programs really should find something more significant to be incensed over.

Yeah, when you add it all up, it comes out to about $3.33 for every man, woman, child, post-op, et al in this country. Pretty insignificant in the overall scheme of things.

However, I'm sure a lot of people look at it to be representative of all the waste in the government...just another porky pet project that might look good on paper, but ultimately only benefits a few at the expense of everybody. And it does add up. $3.33 here. $1.95 there, another $15.69 in that corner, and before you know it, you're nickel-and-dimed to death!

Now, that being said, I'm really not taking a side either way. The bill really doesn't benefit me, as the only vehicle I have that falls into the qualifying age range and is guzzly enough is my '85 Silverado. Now if I depended on that truck as daily transportation, I might be tempted, but I don't. It's just one of several second/backup vehicles I have.

And, while the bill really only benefits a few directly (those 250K or whatever who buy a car because of it), there are other potential beneficiaries. For example, the salesperson, dealership, manufacturer, car insurance companies, lending institutions, salvage yards, etc. And some of that money will no doubt get back into the economy, as the people associated with it put it back into their community in shopping, eating out, etc. So it might be a spark that helps get the economy going again.

I just worry about who ultimately ends up paying for it all, at the end!

Now that I think about it, I have a friend who might benefit from this bill. He has a 2004 Crown Vic with about 145,000 miles on it. EPA combined is 18 mpg. We're having a cookout today and he might stop by, so if I think about it, I'm going to ask him what he thinks of the bill. I believe he only has a few payments left on it though, if he hasn't paid it off already. So he might just be thankful to be through with monthly payments for the time being!

gagrice

How can you be so consistently on the wrong side of every subject?

When you consider opinions are subjective, yours the same as mine, I find you on the wrong side. I have 50% of the population thinking my way while you have 50% believing your way. Only time will tell which side was right on this issue and many others we have debated. Personally I think the same mistakes are being made today that were made in the 1930s that stretched a recession into the great depression. Only way your side knows to get out of recession is with a World War. Not my idea of good economics.

PS
Your Toyota website on C4C is inaccurate. I can see why. The Ford site has it together. Could be why they passed Toyota up last month.

kathyc2

The Government has already bailed out companies who made bad business decisions. Now they are going to do the same thing for those people who bought gas guzzlers they didn't need. I guess it pays to be stupid now. In business, and in life When are the people who do things right going to get a break?

When we aren't in the minority and politicians need our vote more than they need votes from the irresponsible. LOL.... don't hold your breath.

countonme

I live in California I have been driving a 1982 toyoya tercel It has been insured an reg. all the time It is over 27 yrs. Can I use it for a new yaris or accent

I want to buy a little car fo 10k basic no air 5speed use my 4500$ to reduce cost to 6000 plus 1500$ tax an lic total cost to me would be 7500$

is this doable

stever

I had one of those for 17 years. Great reliability.

But the cut-off is 1984 or newer cars.

"Your vehicle must be less than 25 years old on the trade-in date."

CARS

hpmctorque

"Cars sales go up, PROGRAM GOOD. Car sales don't go up, PROGRAM BAD."

Doesn't the cost of the program have to be factored into the evaluation of whether it's good or bad? Otherwise, why not double the value of the vouchers, to $7,000/$9,000, and make the program even better? That would move more new vehicles.

countonme

That sucks if my tercel was a 1984 insted of a 1982 would get a vocher. It looks like a clunker but runs great I will keep driving it someday i hope to get a 7000 or 10000 vocher to take my tercel while i am at it I will look for a good deal on a old car from the 80's an hold onto it I have a datsun an a samuria already

hpmctorque

In addition to being too old, your Tercel is too economical to qualify for this program, since it gets more than 18 mpg.

dave8697

The $4500 can go a long way. If I still had my van I sold last year I would be in the market for a new car. All my clunkers that I still have are worth just under to way over $4500 to me. The incentive to save gas and get free money is a good one. That van got 19 to 20 mpg and was driven 4 times a month. Gas saving alone fails to be an incentive. $775 a year for insurance and registration for a base level new car. The old van was $142 a year for those same 2 items. 18560 miles a year of driving required to trade evenly the gas difference for the insurance and registration difference. I used 25 vs 19 mpg and $2.70 a gallon. Now if the C4C gets you 2800 more than the old one was worth, then the first 2800 of depreciation of the new one is covered. After that first year of depreciation at the gov. expense, depreciation drops off and your driving a safer cleaner vehicle. Eventually the insurance and excise taxes drop a little.

rcantwell

This is my work car and it definetly is a clunker. I have thought about getting rid of it, but $4500 will make the difference. It is rated at 15mpg. I am going to buy a 09 HHR 2.2 that is rated at 25mpg combined. This should get me the $4500. Was at the dealers yesterday, and picked out the car. I made a $1000 deposit on it and they will hold it till the law really takes effect later this month. I know some dealers are already using it, in the probaility that they will be able to get them certified as clunkers when the rules are finalized. My Chevy dealer isn't doing this and I don't blame him. Who knows what kind of rules they could end up with. I can wait three weeks, and then if for some strange reason I don't qualify, or can't get qualified before the money is gone then he will refund my $1000 and no harm no foul.
He is a small town Chevy dealer. We were talking, and both agreed that a lot of people that still drive these clunkers won't have the money to buy a new car anyway. He wishes that the government had just issued to vouchers to the people instead of putting it all on the dealers. Well, we will see what happens. I hope they are able to get me approved before the money is gone. Of course there is always the possibility that they will extend the program. After all how can they cut it off and refuse you approval if they give it me and your neighbor? It is really our money anyway.

kdhspyder

I only refer people to the source so I ignore the Toyota website in this case. It's only programming done by humans so every time there's an additional intervention there's more room for error. I just send them to the source.

...the rest of the commentary is just more political whining. Can't you leave that alone even for one post?

This is not a Dem/GOP issue nor a Red/Blue state issue no matter how you or the nattering nabobs of negativism ( to borrow a phrase ) try to make it out to be one. It's about the auto industry wanting the Feds to help to stimulate its business all over the country for all political persuasuions. When Bush signed the bill for tax incentives and tax rebates for hybrid/clean diesels I didn't see you whining about socialism at that time. All of a sudden now your'e 'the defender of the faith'?

gagrice

When Bush signed the bill for tax incentives and tax rebates for hybrid/clean diesels I didn't see you whining about socialism at that time. All of a sudden now your'e 'the defender of the faith'?

Because you are a newcomer to Edmund's you probably missed all the posts about giving away tax dollars on hybrids etc. I have been anti EPA and CARB on this site since 1998. You have not seen me posting any kind of positives about any energy bill here on Edmund's I don't go with the wind on political issues. The 2005 Energy bill was a joke as was the 2007 Energy bill. All the wasted money on Corn Ethanol and Chinese CFL bulbs. You can check my posts on those issues as well. I still think that hybrids are a waste of money and a short term fix for a greater problem. Face it we are at opposite ends of the political spectrum. You expect big government to fix all the problems and I expect American ingenuity and private enterprise to come up with the answers. That makes C4C a big waste of money in my eyes. Even though I may take advantage of it just to get back a pittance of what I put in each year.

bpraxis

For those who have lived by higher values such as:

1. Working Hard
2. Living below your means
3. Saving for a rainy day and retirement
4. Made prudent decisions and postponed gratification.

Every thing that you have worked for is at stake now.

The massive spending on a plethora of gov programs such as the one we are discussing with destroy the dollar and with it all of your accumulated lifes work.

If your assets are measured in dollars including real estate, stocks, bonds, bank CDs etc are tied to the fate of the US dollar.

Please contact your representative and demand that they cut spending now before it is too late.

Enough with punishing hard work, thrift and entrepreneurship and rewarding irresponsible behavior.

elroy5

The biggest problem I have with C4C is it only "stimulates" a chosen few consumers (those who have clunkers they don't need). Those of us who have been prudent, and already have fuel efficient cars, are once again the one's footing the bill. The responsible have to pay for the irresponsible once again, and it's really getting old.

geomens

I wonder what this post has to do with C4C. I think there are lots of other forums on other political sites to post this. I came to this site to learn about the C4C program and not be lectured to about contacting my legislature.

gagrice

I came to this site to learn about the C4C program and not be lectured to about contacting my legislature.

As you can see by the title of this thread "C4C - good or bad idea". Many of US believe it is a bad idea. And the only way to address that would be to let your representative in Washington DC know how you feel. There is another thread that you might like as it is more directed at the implementation of the bill.

http://townhall-talk.edmunds.com/direct/view/.f1db290/47#MSG47

Also the final word on the bill will appear here first.
http://www.cars.gov/

fintail

Yeah, because legislators do what their constituents tell them to do - special interest influences are never a factor :sick:

The next thing you know, people will believe a president works for his nation and not for the same cabal of special interests.

stever

Political rants on a car forum do get a bit tiresome, but you can't talk about whether C4C is good or bad without involving the pols.

We have another C4C discussion over in Smart Shopper that sticks more to the nuts and bolts about how the program works:

Cash for Clunkers - Does it Work for You?

bpraxis

Would someone please help me understand the morality of taking money from the tax payer or debasing our currency, (savings), to further bail out the auto companies????

Remember morality regarding stealing?

I have the greatest respect for the knowledge and competence of the host of this forum. Thank you for considering my question.

dave8697

Good:
keep your auto job. at the factory. at the dealership.
old cars replaced by new ones. neighborhood looks better.
an air bag to prevent further injury.
200,000 people not as upside down in their cars.
auto workers keep their kids in college and keep buying whatever.

Bad:
Won't spur Prius and Insight sales. would be hybrid buyers already all have 19+ mpg cars.
$7 per taxpayer to cover the first Billion is going to hurt me. I will indirectly owe the interest on that $7, minus the deferred part of the interest. That could end up as pressure to raise my taxes by a penny a month, or will probably mean a SS entitlement reduction at some future point of at least 10 cents a year.
too great a risk that American manufacturers will get the majority of the gain in stimulus spending.

Ugly:
the struggling roofer who bought my van for $700 may not find an affordable reliable work truck to buy next time around. they will all be crushed to make wind farms.

Mr_Shiftright

It's not a moral issue, it's an economics manipulation. Rather than being bogged down in the moral arena, which never gets resolved in 10,000 years, it may be better to ask the question in economic terms---simply put "Does it cost us more to DO this or NOT do this, or do something else?"

Economic factors in this question might be:

cost of vouchers vs. cost of unemployment to out of work people in the auto-related industries, for instance.

jeffyscott

Thanks, did not know there was another discussion of this program. I'll switch to watching that one as I'm tired of wading through the politcal rants here.

isellhondas

Don't patronize me. I am against any socialist program. I don't just focus on what affects me as you seem to imply.

isellhondas

I took in my first clunker.

It was a decent 1999 Pathfinder. The nicer model with 4WD. It had 140,000 miles and a dog chewed up interior but it would have made someone a not so bad SUV to drive around in.

It was hot yesterday and as I went to park it I noticed the air conditioning was working well.

So, yeah, I did make a sale that I wouldn't have made but I just felt a twinge of "something" that made me feel that something wasn't quite right about crushing a perfectly usable car.

erniesdad

But there is a serious moral implication here, and the post just prior to yours describes it perfectly:

"the struggling roofer who bought my van for $700 may not find an affordable reliable work truck to buy next time around."

Most of the people who will be able to take advantage of this program were probably also able to pay for the maintenance on their "clunker"*, and my guess is that most of these "clunkers"* would probably pass a safety inspection in most states, and probably have at least 5 years of life left in them, even though they might retail for under 3K. My car would definitely qualify in that regard. 1995 crown vic, 135K, brake job only done two years ago, belts/hoses replaced, signals/lights/engine/tranny all working fine.

However, instead of my car being sold on the open market for $2k or less(Edmunds puts it at $1500 or so), I'll take it instead to a car dealer for a new car and get $3500 to $4500 for that car. The car will be crushed, reducing the supply of older cars and driving up the price for those "clunkers"* that remain. Those people who most need a quality used car at a good price are going to wind up with higher-priced, lower quality cars because the better cars, the cars whose owners could afford to maintain them, are going to wind up in the crusher. That's wasteful, immoral, and wrong.

I am looking for a car, and my car will probably qualify for the program. I probably still won't use it. If it costs me money, fine. I'd rather see my car get used by someone who may need a car to be a productive member of society, than be chewed up in a car crusher. If I can't sell it, I'll donate it. I'll sleep a little better in the morning than taking the money and seeing the car crushed.

*BTW, I hate the term clunker as it is being used here. Many of the so-called "clunkers" being talked about run perfectly fine, and are only old or are politically out of favor.

erniesdad

Amazing. That's why I won't do it with my car. It's just wrong. My guess is you could probably find someone to buy that car fairly easily as a second or third car, or as a winter rat, or work truck. Instead, it's going to the shredder. A pretty grotesque program, if you ask me.

gagrice

I'd rather see my car get used by someone who may need a car to be a productive member of society, than be chewed up in a car crusher. If I can't sell it, I'll donate it. I'll sleep a little better in the morning than taking the money and seeing the car crushed.

Now you have gone and made me feel guilty for even thinking of using my 99 Ford Ranger as a C4C trade in. Of course you are right that there is an environmental sin to destroying a vehicle that still has good years of service left in her. I think that it needs to be repeated right here. There is far more hydro carbons and PM pollution in the manufacturing of a car than it produces in its lifetime of use. So taking a car off the road because it is older and uses more gas is a very poor environmental excuse. This program like all government programs are the brainchild of the lobbyist that own our President and Congress.

kdhspyder

This is not a morality issue unless you attempt to make it one.

It's only about business. This is what our country is founded on...business. The government is the political arm of the business interests. Businesses pay the bills for the political arm in order to create stability so that more business can prosper.

Taxpayers are NOT the key players in this equation. If you think we are then you're just being naive. This country is controlled by business, it's always been this way since the end of the Revolution. Our Constitution came about because the original Articles of Confederation didn't do a good enough job in regulating business and creating stability.

Now that that myth has been busted. The bailouts of the auto industry by both recent administrations were done to maintain stability and to foster continued business. Allowing either or both companies to fail would have created a massive economic crater in the midwest. This was never going to be allowed to happen. Never.. by no American President nor any administration.

Why?? See the paragraphs above. Business and Government are one in the same. Your naive viewpoint about stealing is simply a misunderstanding of how Government/Business work in this country. No stealing has been done.

fintail

And have owned every pres and congress since before you were born...

kdhspyder

Hypocricy. You are 'against any socialist program' but did you refuse to do business with HCH buyers that bought over the last 3 years in order to take advantage of the hybrid tax credit? Did you turn them away from your dealership door because it was wrong? No you sold the vehicles and collected the profits and commissions.

But over the last 3 years I didn't see you complaining and whining about that socialistic program. Even today you don't stand your ground and refuse to do business with the person that traded in his Pathfinder in order to take advantage of the C4C. Doing what's convenient at the moment is just being weak. If you're against it on principal then be strong enough to stand behind that principal. Otherwise it's just whining.

I OTOH am 100% in favor of the C4C program both because it will benefit me and I think it's good for the country as a whole. I am also 100% in favor of the financial support for GM and Chrysler even though both remaining in existence is a threat to my business. I am also in 100% in favor of any stimulus measure that cushions the economic fall then helps us to rebound.

hpmctorque

You and other salesmen and dealers, not just those who buy vehicles, may want to post your messages regarding clunker trades in the new discussion "I Traded My Clunker For $3500/$4500, and Bought A ----." Your postings will give us readers a better understanding about how the C4C program is going.

By the way, what did the person who traded the Pathfinder purchase?

hpmctorque

Well stated!

dodgeman07

Spoke with my brother-in-law over the weekend and asked him what he thought of the C4C deal. He said he loved it and plans to get a new vehicle in August.

I was shocked because he is worth quite a lot of money and asked what vehicle he had that qualified. Turns out he's got a 2000 Jeep Cherokee with 190K on the clock and it's also a bit beat up. He says it's worth $3K tops.

Well my sister (his wife) has a Prius so it looks like Toyota will get this sale and he'll get the $4,500 C4C offer. The real kicker is his "profile" is nothing like I expected the typical C4C customer's would be: He's got a net worth approaching 8 figures! Needless to say he's the wealthiest person in my family but also the only one who's cashing in on this offer!

bpraxis

Regarding the economic issue of Cash for Plunders may I suggest reading the "Broken Window Fallicy" which may be found by doing an internet search.

The classic economics text "Economics In One Lesson" by Hazlitz would help everyone here better understand the unseen economic consequences of this policy.

If some of the sentiments in this chatroom would be carried to their logical conclusion, then we should have bailed out the buggywhip industries in 1900.

Creative Destruction is essential on the path to prosperity. Economic resources must be reallocated to their most efficient use by the millions of actors in the marketplace. Not a politician who has never operated a lemonade stand.

The ingenuity of the human mind will create millions of new jobs in new industries that we cannot even begin to imagine if left free. Who would have imagined Amazon.com 20 years ago?

ingvar

I am against any socialist program.
Me too, but it is capitalist program. Government gives 3-4K, but push a person to spend at list extra 8-10K. A person have to finance his purchase, spent extra $$$ on credit, plus higher insurance premium.

srs_49

Most who can afford to buy a new car will do so when they can afford it, which has little to do with a $4500 subsidy

Look at it this way. $4500 taken across a 150,000 mile life of a vehicle comes out to 3 cents/mile. Now a new vehicle driven those 150,000 miles is probably going to end up costing you, say, 40-60 cents/mile - maybe more depending on the acquisition cost of the vehicle. So, is 3 cents/mile difference going to make a difference in whether I buy or not, assuming that I had a vehicle that would qualify, which I don't? I don't think so.

isellhondas

Yeah, I know. Just thinking out loud a bit here.

isellhondas

Name calling now, are we?

I am simply trying to beat up both sides of this while looking at the big picture.

gagrice

You have nothing to feel guilty about. The socialist program is forced onto US. Liberals like to make conservatives feel guilty for accepting Social Security. When we were forced to pay $100s of $1000s into the program. We will all pay for this Clunker program. If you as a salesman make a hundred bucks in the process it will help when time comes to pay it back.

dtownfb

I read your posts with great interests. Not necessarily because I agree but i do think you bring up some good points that are the basis for a very good debate/thread/discussion.

I have this debate on a weekly basis with folks I encounter. I always tell them that over the last 5-7 years, we have not been practicing capitalism. It's been the case of "how much money can I make off people". In other words, we let GREED consume us. I believe this recession is nothing like we experienced before. The financial institutions and the "way of doing business' has been dramatically changed. this did not start on Jan. 20th and nothing that has been done the past 6 months has made it worst...or better. it has to run it's course and there will be more carnage. I learned back in the fall from a friend who is an economist/entrepreneur that right now in order to keep the economy going the government is going to have to spend like crazy. This is simply because with the credit crunch and stock market plunge, money is not moving liek we need it to to stabilize the economy.

BTW, I saw this morning that since 2007, the auto industry has lost 335,000 jobs. this C4C bill is a drop in the bucket to help the auto industry move some cars. That's all. It started out as an environmental bill designed to get more people into hybrids and out of SUVs and pickups but morphed into this current bill when car sales tanked.

I'm not a fan of this bill either simply because I don't think the government should encourage Americans to incur more debt especially in this climate. but the lending institutions will only qualify those who have the means. So i stopped ranting about this bill and just accepted it. I also didn't like receiving the first stimulus bill under Bush but used the $800 (whatever it was) to help pay for the $4.20/gallon gas during our vacation. :P

stever

we let GREED consume us

Never met John Davison Rockefeller eh? :shades:

this recession is nothing like we experienced before

Before my time, but my mom still talks about the 30's.

over the last 5-7 years, we have not been practicing capitalism

I wonder if the US has ever come close to having a "market economy."

Back to clunker news, here's some of those unintended consequences:

"June's SAAR not only failed to hit the 10-million mark, the 9.66-million final tally even regressed from May's figure, according to data analysts at Edmunds.com."

Industry Fails to Climb Back to 10-Million SAAR; Culprit Likely Cash For Clunkers (AutoObserver)

dtownfb

It's similar to why the government pushes home ownership. Home ownership stimulates other businesses and helps broaden the local government's tax base, among other things.

use the bill to your advantage. I hope you sell a ton of Hondas because of this bill.

dtownfb

You are quick to respond. You act like you are the host or something.

i wasn't around for the Great Depression but wouldn't mind hearing stories if you have any.

I do think some peopel are waiting. I do think some people are looking at cars who otherwise may not without this bill.

I think the biggest mistake, and i am not sure how this happened, is the "nickname" of this program. This bill is not "Cash for Clunkers" but really "Cash for Guzzlers" since it is about getting fuel inefficient cars off the road. I think changing the name would clarify some things and maybe people realize this bill is not designed to help the consumer but rather the auto industry.

stever

Well, as someone recently posted in here, the guzzler part of the program was watered way down. It's way more of an economic boost than a fuel efficiency program (unless the category 2 and 3 owners actually downsize to cars).

My mom's family were farmers, so they always had food during the 30's. I wasn't around, but it's like pulling teeth to get her to spend anything on herself. If my niece wasn't in charge of her grocery shopping now, she'd probably be living on potted meat and cat food!

Car Allowance Rebate System just doesn't roll off the tongue like "clunkers."

bpraxis

My compliments on an extremely well thought out and very articulate response dtown.

We agree I think that most of the economic problems that we face today are caused by collectivism ( socialism ), and have nothing to do with capitalism.

Your comment regarding greed was spot on. What pours gasoline on greed is The Fed printing money and holding interest rates too low this causing a stock and real estate Bubble.

Fannie Mae has nothing to do with capitalism and allowed for the securitization of loans which also poured gas on the real estate bubble. See also the Community Rienvestment Act.

It is hard to listen to your peers tell you how much money they are making in real estate or stocks and stay on the sidelines.

A sound currecy backed by preciouse metals as required by our Constitution would have prevented most of this.

The cure for a Depression is a Depression which is a massive deleveraging process from living beyone our means over many years.

Spending money that we do not have on Cash For Plunders is simply increasing our debt and delaying the consequences of our bad behavior. The consequences will be much worse.

Many countries over the last 200 years have attempted to print their way to prosperity and results were beyond disaster. It is a way of avoiding reality and pandering to the natural human desire for a "Free Lunch".

There is no Free Lunch as you know.

kdhspyder

As foretold in this very thread....

Automotive News | July 6, 2009 - 3:26 pm EST

DETROIT -- Congress could begin to debate an extension of the approved cash-for-guzzlers program as early as this fall if the current program proves to be a success, said Dave McCurdy, president of the Alliance of Automobile Manufacturers.

The program’s $1 billion in funding is estimated to cover 250,000 vehicles. “I think it’ll go very quickly, and Congress may have to revisit it in the fall,” McCurdy told Automotive News today.

He said that “250,000 vehicles isn’t enough.”

“We think there’ll be additional phases of this,” McCurdy said. “It’ll probably evolve.”

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