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Late in July, they brought them back, but at much lower levels..
If manufacturers are trying to capture some of the the C4C money, you can be sure dealers will try to do the same..
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Uh, UAW is part of management now. They own 40% of GM and 50% of Chrysler. With such a large ownership stake, to say they had no part in influencing this legislation strains credulity.
The legislation had its genesis early in the year after the US auto industry saw how successful it was in pumping up sales in Germany. That was Feb/Mar. At that time there was no certainty that either GM or Chrysler would survive. The UAW was no where in the picture at the time that the bill began its life.
Your assertion about the UAW is false too. It's the UAW VEBA that currently has ownership, and it has stated that it has no role in the management of either company.
We can put that falsly-held belieft to rest. Hate the UAW in another thread.
And to my knowledge Charles Schumer, Democratic Senator from New York was the one who wrote this legislation and did the most flacking for it:
http://schumer.senate.gov/new_website/record.cfm?id=311570
Again the program was created by the auto industry then presented to the Dems to write the bill and legalize it. Nothing more.
And the US auto industry is is the most capitalistic of all companies? This recent legislation puts the puts the lie to that assertion-but there are other examples from history as well-import quotas from the 1980's, the 1980's Chrysler Bailout, recent bailouts of GM and Chrysler, etc. etc.
A 25 year history of protectionism and government subsidies, hardly qualifies as capitalism.
I perhaps should have inserted 'symbol' of American Capitalism. But all the points you bring out do not make any of the companies anti-capitalistic. You mistakenly believe that being a capitalist means eschewing using the government when it suits your purposes. Going it alone as it were. That might be called 'pioneerism' but it has nothing to do with Capitalism. We hae a mixed economy. Government and Business are one-in-the-same.
Definition of Capitalism from Wiki...
Capitalism typically refers to an economic and social system in which the means of production (also known as capital) are privately controlled; labor and goods are traded in a free market; and profits are regularly reinvested or invested in new technologies and industries. The extent to which different markets are free, as well as rules determining what may and may not be private property, is often a matter of politics and policy; consequently, many states have what are termed "mixed economies."
And please provide some support for your assertion that the military and intelligence communities support "Cash for Clunkers" legislation and have influenced its passage. That is very left field. I see no evidence for that at all. Maybe you are thinking of the fact that the initial legislation was tacked onto a military spending bill?
That's easy. You apparently missed the report of GW Bush's 5 yr Energy Task Force in June of 2007.
Every President has come down on the side of 'Energy Independence' going back as far as the first Arab Embargo. Every time the subject comes up in a crisis or in a State of the Union speech it's always about reducing the consumption of oil for national security. Just who might it be then that is so concerned with 'national security'....the Sierra Club? This deeper understanding evades nearly everyone, you included it appears, who simply react with superficial kneejerk posts or comments.
It's been asked so many times herein and on other sites...'Why destroy these clunkers? What purpose does this serve?' It serves the purpose of permanently taking the guzzlers out of use. No one can be allowed to use them again. Thus we are forced as a nation to use less fuel per person. We are forced to drive more fuel efficient vehicles, there are no other options.
You certainly don't understand how the public debt works.....it will never be repaid...ever. The principal is never repaid, it's rolled forward and refinanced. The main consideration is can the economy cover the interest on the debt. In this case the interest can be covered easily. Do you have any idea about the rate that the US Treasury pays to borrow funds? On $1 Billion it's about $30 million. The tax receipts from increased revenue will be far in excess of $30 million per $1 Billion borrowed.
Think about it...
If the various auto makers make $1000 profit on the sale of each of the 250,000 vehicles that means that the IRS gets about $500 per vehicle back in taxes. That comes to .... 250,000 x 500 = $125 Million
If the various dealers selling these vehicles make $1000 profit per vehicle that means that the IRS gets about $500 per vehicle back in taxes.. That's another $125 Million.
All the suppliers and subcontractors to all the dealers and auto makers all up and down the line from iron ore to window tinters get a 10% boost in revenue/profits. That means more taxes paid.
The States get a 10% boost in sales tax revenues.
Then to top it all off if 1 million units are replaced we as a nation end up NOT spending $5 Billion in fuel NOT used over the next 5 yrs. This is $5 Billion that stays here.
Are all the arguments for this C4C program positive, with no negatives? That Volvo may be old, depending on one's definition of old, but what makes you certain it was a beater? Maybe it was, and maybe it wasn't, but isn't it also possible that that Volvo could have served as useful transportation for someone? Was destroying that car by edict the most enlightened alternative for a program designed to stimulate new vehicle sales? Are our lawmakers wiser than individual owners in deciding when it's time to scrap vehicles? Was destroying that Volvo a good deal for us taxpayers?
I don't know about the other components, but it looked to me as though that engine put up a pretty good fight before dying. If that's correct, then it's probable the engine had a significant amount of useful life in it. Sure, other major components might have been in bad condition, but perhaps not. Maybe it was a decent used car with a sale-by-owner value of ~$3,000-$4,000 dollars.
Second...if you're so concerned about saving them for use...then buy them yourself to save them or donate them.
Otherwise.......
This is fact....5 participants
1. $33000 income*
2. $55000 income*
3. $100000 income*
4. more than all three of the above combined*
5. 'Only' $130,000 annually.
*Oh, these numbers are the monthly gross incomes, not annual incomes.
None of the 5 have FICO scores less than 750. All cash purchases except #5.
This has nothing to do with any 'greenie' program.
The $4C as you note was not built for the D3 or UAW. It was designed both in Detroit and in Torrance to assist all makers and all dealerships. All makers and all dealerships are taxpayers and deserve equal treatment.
Meanwhile, courtesy of MINI.
If you want some say in the matter....buy them all yourself.
No one herein has considered that the entire cost of the program ( 1 million units and $4 Billion ) is covered by the savings in fuel by the nation over the next 5 yrs. Almost none of the complainers herein do any mathmatical analyses...it's easier just to whine.
That doesn't include the additional taxes that the IRS and various states will get from increased business accross the whole spectrum and all the millions of workers involved in the greater auto industry. These increased taxes are far in excess of the cost of borrowing the funds.
According to the author of message # 2366, british_rover, this 2000 Volvo had 90,000 miles on it. Most nine-year-old cars with 90,000 miles still have useful life in them.
No, no, not pessimists at all, but rather hard-nose skeptics asking reasonable questions..
A brand new car in 18 months? Gimme a break. 3 years minimum. Can they sustain that burn rate of their venture capital? Remains to be seen.
And who is VVC? Never built one car yet.
No working factory? No prototype? No design to show?
Sounds like another piece of automotive dream-spinning, like Tesla and all the rest. A lot of PR, a couple of expensive prototypes that are not production cars, a horrendous burn rate of venture cap, then a disappointing product (if any at all).
HOWEVER, they have good people behind them, and an estimated capitalization of $250 million to get rolling. Government is jumping in, too.
Okay, everyone who hates to see taxpayer money go to anything, start complaining!
The backers may be very smart but it remains to be seen if they have yet the experience to survive the saw-mill of gnashing teeth called "the automobile business".
I'll reserve judgment for when I see a real car on a real road doing real things above and beyond what a Prius can do, for less money.
If they can pull off the above, then I'm a supporter. Until then, spare me the press releases.
Unless the nation is undergoing a new "normal," seeing millions of good paying jobs permanently outsourced, and losing critical industries in the process.
I keep telling people the U.S. is undergoing a structural economic change that will lower living standards for most. This is not a cyclical recession where things are temporarily slow.
Some people listen, some don't.
This is because people can't resist a "sale," even if they are ignorant to the fact that they're paying more now than before, for the same exact vehicle, because of dealer rebate and incentive pullbacks, and less willingness to negotiate price.
Cash for Clunkers seems to be welfare for dealerships. They get a boom in sales, and they get to raise prices the most in the shortest period of time in many, many years.
But when the money runs out, they'll be even more desperate for customers.
Just you wait and see.
Just that 1 Billion for Cash for clunker INCREASED sales 200% and really kicking off the car market and getting poluting cars off the road.
The bad thing is there are dealership like Spreen Honda In Loma Linda CHARGING extra $600 fees for cash for clunkers and doing unethical things. They don't accept savaged clunkers, but it doesn't state on the program that its not allowed. Some dealership are totally clueless how the cash for clunker work
You donate that car to someone and it will put them in the pour house for repairs.
Just you wait and see.
I think you hit it on the head. There is the Rah Rah bunch that think they can persuade Congress to keep the pig trough full of tax dollars. I would say enough is enough.
I would have traded my 10 year old Ranger in on a new one. They have not improved one MPG so no go on the C4C plan. I am probably better off not taking that much cash out of the bank anyway. If they wanted to stimulate the auto industry they should pull a few billion of the money we are wasting on GM and C to stimulate the auto makers that are likely to survive. It is like keeping someone on life support for years that is brain dead. Oh that would be our current Congress.
Your ranger has what 80,000 miles or something and is in perfect shape? Give me the specifics exactly along with what trim level, engine and bed length. It is worth way more private party then C4C and probably almost as much wholesale.
There isn't anythign on that vehicle that is a guaranteed failure like the trans in that S80.
First off, the top corporate tax rate is 35%. Since GM was allowed to carry forward 16 bil in losses, it will be a long time before we see tax revenue from them.
The 30 mil in interest is for 1 year. We will pay another 1 bil in interest in 14 years. In 50 years it's 3.5 bil. And that's assuming the rate stays at 3%.
You also forgot to calculate the decreased tax in your fuel savings. FIT, excise, sales...
Second...if you're so concerned about saving them for use...then buy them yourself to save them or donate them.
Don't worry, Come Nov. 2010, I'll do something about it.
You seem to love this program while others have misgivings that thye are using this forum to express,
Did you take "Ciphering" in your mathmatical studies? :P C4C creates a temporary spike in auto-sales, which robs from used-car and future sales, and repair-shops.
It pushes products at people and society who don't necessarily need the products. It is a continuation of the same economic strategy of the last 15 - 20 years that has led us here. Borrow and spend more and more, and just keep going into debt further; - it is not sustainable.
Sometime in the future we'll have more people who can't make the loan payments on those new cars they qualified for. It will be a repeat of the housing mortgage fiasco from having many people not qualified for a mortgage in reality having qualified by changed in the rules through the years to make mortgages more politically correct.
2014 Malibu 2LT, 2015 Cruze 2LT,
So keep spinning yourself in deeper. It is not good for anyone but the few directly involved in the auto industry. With all the bailouts the auto industry has become a loser for our tax system. With the $100 billion projected to keep GM and C afloat along with a billion here and $25 billion for alternatives. The Auto industry will not be a contributor to the tax base in our life times. Yours and my grandkids are the ones we are screwing. Should make you feel real good every time you sell another Prius, and send 75% to Japan.
What this country needs economically right now is not to continue to go deeper in debt. We do need to produce more, and consume less, getting ourselves out of debt. We need to sell more goods and services abroad. This may come as a shock to our economy, as the way to do that is to reduce costs, which means lower pay in addition to working harder, and the government is going to have less $ to provide services. I suggest we learn to work harder, produce more, fend for yourselfs, and don't keep looking to the government for hand-outs and excessive services. As a society we've become too soft - expecting not to work hard, voting for politicians who pander for votes while putting the future in-debt, and denying the problems that are building.
C4C is just having 1 more drink in the morning, to put-off 1 hell of a hangover from the party the night before.
NADA and AIAD are melting the lobbying lines as we speak. These are not "greenies", surely. These are mostly red-meat conservative businesspeople and they don't want to become an unemployment statistic. Would you?
Also, giving a poor person a used car they cannot possibly afford to own seems cruel to me.
One Free Used Volvo + $100 a month (minimum) to maintain safely + $600/yr insurance + $1200 yr in gasoline = $3000/yr. minimum upkeep. USA poverty guideline for 1 person, 2009 is $ 10,830.
so that leaves $7830 for rent, food, clothing, personal items. This presumes the Volvo never breaks.
Why would one lament an old car being crushed any more than throwing away an old refrigerator? Ever try to sell one of those? :P
I'd have taken advantage of the program if I had a car that qualified, as the normal trade-in value for my 2 cars is a lot less than $4500.
Of course a lot of cars were sold. Taxpayers funded the windfall, and dealers didn't have to lower their prices to market value.
What do you suppose will happen when the program ends? People in my position are not going to be hyped up to buy a new car just to keep up with the Joneses, especially when the Joneses got theirs for $4500 less than what we are expected to pay.
My cars run fine, even though they are both over 10 years old. I'll buy a new car when the price is right.
Consider the energy required to produce a new car. Taking an old car off the road does not make ecological and economic sense unless it uses way more gas and oil than its replacement, and it would be driven many miles per year.
CAR$ is all fluff, designed to help the auto makers get rid of inventory and incidentally make quite a few car buyers happy.
If Detroit wants to succeed, how about building Ford Falcons and AMC Gremlins without all the modern bells & whistles?
The CAR$ program should have, at least, required that any replacement car be rated at 35 MPG or greater.
—Mr. Anwyl is CEO of Edmunds.com.
AutoObserver
There's a different version of Anwyl's opinion piece in the Wall Street Journal this morning.
That's what I did, actually. I took advantage of a one-week spike during which the trade-in value of my old truck rose from about $1000 to $4500.
If C4C is a "cheap trick"---well, let's see if it works. Better than sitting on our hands and doing nothing at all.
Wait a minute...
So if 60,000 to 70,000 clunker sales a month is normal and this program spurned 250,000 in one month that is barely above the natural rate?????
Come on he can't be serious. A nearly four fold increase in sales related to clunkers is a whole lot more then barely the natural rate.
Yes of course this was a temporary program launched at just the right time to clear the decks for 2010 models. I don't think it should be run for a whole year like the original plan was but I still think just one billion is not enough. Put two more billion into it that should run through the end of the month maybe just into September and that is the end of it.
Should be enough to clear out the remaining 2009 and 2008 cars and clear the way for 2010s.
Once again, I didn't say anything about lamenting crushing of an old car. I spoke to the question of people being able to afford more new car costs than they should be taking on.
>The long term consequences may or may not prove beneficial but the short term ones certainly are. If your house is collapsing, you pour concrete under it, right?
If my house foundation needs support, I employ a contractor to reinforce it or repair it; I don't pay to reinforce my neighbor's (the foreign car makers) foundation on all sides of our property. This $forclunkers parallels the stimulus bill in that it spits the money all directions and perhaps a little of it is really stimulus money spent within a few months to help the economy: here the US automakers likely are able to get a small, tiny portion of the money for themselves and their dealers.
2014 Malibu 2LT, 2015 Cruze 2LT,
You make it sound like the American just had this happen to them through no fault of their own. Well they brought it about themselves through a combination of bad management, high-costs, and poor quality (in the past). It is their fault that they lost much of their market since the 60's. Thus a better analogy would be that the American auto industry is like a person who used to have a good job, but then they started to drink, lost their money and is working part-time at minimum wage. And now this person is knocking on your door asking for $ which you gave him, and now he's showing up day-after-day for more.
While I certainly support your right to support this person, please stop trying to convince me that it's my civic duty to save him. Just as the defense industry and other industries such as textiles had massive readjustments to a changing world, so too does the auto industry face change, which no $1B or $3B C4C is going to make a difference.
Don't forget the 100,000 in deferred sales that stacked up in the weeks the program was getting discussed and passed.
I don't know what the Senate is doing this morning but if they don't fund the program with more money, they are going to be getting a lot more heat from people wanting to trade their clunkers than the heat they are getting from the deficit hawks.
A lot of people didn't even learn of the program until the money ran out and the wheels came off. Now they want their slice of the pie too.
I wouldn't be so sure. The subject of $4C came up at my dog's playdate. A bunch of people who aren't especially political were unanimously disgusted by it. I don't talk politics, but when asked, I told them about the requirement to grenade the motor. A lot of headshaking and derision. My sister mentioned it to me, and she is a mushy centrist, and when I mentioned it to her, she was shocked and disgusted as well. The question/exclamation was unanimous in both cases: "They're destroying the car?!?"
They might try to ram it through the senate by Fri(that's when congress goes in recess), but it only takes maybe five senators to throw a monkeywrench into the works and kill the program until September. McCain's already promised to filibuster.
Odd are the people that have a car that should be worth $4500 and are happily trading it in with $4C and getting the $4500 gov't credit applied to their purchase. I can see that in the case of Chrysler who was adding on a large rebate.
2014 Malibu 2LT, 2015 Cruze 2LT,
I was surprised in the weeks leading to the roll-out date how few people knew about the program. It seemed to me that people who weren't actively shopping for a car had no clue about it.
Now that it's all over the news, more people may dip their toe into the water, and they won't be happy to learn they missed an opportunity to trade into a newer ride. Hard to say if they are going to be more likely to contact their congress people than the disgusted ones.