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Cash for Clunkers - Good or Bad Idea?

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Comments

  • mickeyrommickeyrom Member Posts: 936
    How high can his taxes be if he is going to school? The taxes are plenty low enough for people in his income level.I doubt that he needs a decrease in his minimal taxes.
    You don't think that getting tuition- loan is a big deal? I disagree.
    I know I am in it now,but how did Edmunds become a political discussion site? I was under the impression it was all about cars.
  • gagricegagrice Member Posts: 31,450
    It is my thought that it would have been nice if the government had kept his taxes lower, letting him keep his money to take care of his family, rather then paying for the "wants" - not needs, of someone in another state who has a vehicle and probably a job!

    There you go being logical. That is not allowed in this regime. There are a lot of ways the C4C could have benefited more people. Starting with getting the rules all worked out before offering the giveaway. It was kind of like a drunk sailor with a handful of $100 bills giving them to anyone that passed by. With no regard for need or ultimate impact. That impact will be, going back on a campaign promise to give a tax break to 95% of workers in this country.
  • imidazol97imidazol97 Member Posts: 27,675
    >but how did Edmunds become a political discussion site?

    The Cash for Clunkers is a political football so politics is a part of it from the beginning. It's going to be like other things, the politicians will try to take credit for anything they can make look positive about the program. If the perception of the public turns out to be more than 50% negative, they will blame the program on someone else than themselves, the politicians. Since the US automakers were involved in writing the program script and the lawmakers just put that proposal into their bill, opponents will be told to blame the US automakers, e.g.

    Depends on how the media and political hacks can make the program sound now that it's ending. E.g., the media: I saw a CBS report with video of a couple cars with the whole sides painted with words thanking the current administration top guy for letting them use OPM to buy a new car; usually cars just have CARS or Clunker written on the windshield. But congress or the US automakers should be the ones thanked. Just an example of how media can try to influence perception.

    If he has no job, he doesn't pay taxes unless he has a large endowment from which he gets income. The other aspect is that he could live closer to school and not have a large transportation cost.

    2014 Malibu 2LT, 2015 Cruze 2LT,

  • gagricegagrice Member Posts: 31,450
    C4C is more about politics than cars. It is transfer of wealth from the tax payers. Just as you will have to pay back your student loan. Our grandchildren will have to pay interest on the $3 billion C4C boondoggle. Hopefully the bulk of the recipients are tax payers.
  • stephen987stephen987 Member Posts: 1,994
    Correction: it is a transfer of some taxpayers' money to other taxpayers. Just like every function of government is.
  • 100chuck100chuck Member Posts: 149
    I agree and if he has a family he's probably getting back more in deductions and child care credits than what he's paying in taxes.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    The people who bought through C4C pay taxes, too.

    Okay, I'll vote against any more C4C but I insist the government take your neighbor's son's student loans away from him. Fair is fair.

    Do you see where this kind of thinking leads? :(
  • british_roverbritish_rover Member Posts: 8,502
    The 3 billion was money already appropriated to the energy department to promote energy efficiency. There wasn't any extra money allocated for this which is why there were problems getting it administered.

    I think it did its job if the average increase in gas mileage is really almost 10 mpg combined.

    Think that most of the old cars getting traded in weren't getting their original combined mileage anymore and the new EPA test is so dumb that anyone should get a mile or two better then the combined mileage rating.

    Lastly yes a subsidized student loan is a big big deal My FEDERALLY SUBSIDIZED student loans have an interest rate of about 2 percent. If I had been forced to go to the private loan market for that I would have had to pay at least triple that perhaps even higher.
  • futureman44futureman44 Member Posts: 12
    I was shopping for a Nissan Maxima and was quoted $33,000 for an SV Premium and Tech package. When I took the quote to Woodbury Nissan in New Jersey they told me they would only give me the $3500 CFC off the MSRP. Using the CFC deal brought the car to $36,000 which was worse than the internet quote I received for $33,000.

    They refused to honor the internet quote. This is not the only Nissan dealer to be doing this. Coinicelli Nissan in PA and Jenkintown Nissan in PA told me the same thing. Cash for Clunkers only works if you buy the car at full price.

    Dealers are trying to make up 6 months of terrible car sales on the backs of you and the government.
  • kathyc2kathyc2 Member Posts: 159
    He is having to take loans for these things and tuition. He isn't getting any government help, except thru the tuition-loan program

    What about the 2,500 per year tuition tax credit?

    Our system is stacked with breaks and incentives to compell us to comply with what the government wants us to do.
  • bigappaloosabigappaloosa Member Posts: 5
    C4C was poorly planned by the legislators, whether they wrote the text or received it from Bob Lutz. They are responsible because that is what we paid them for.

    The pre-C4C articles I read said the law was written with input from NADA. I don't think the manufacturers, especially Mr. Lutz, had a lot of input or the minimum mpg standards wouldn't have been the same for trucks as for cars. There were very few type 1 trucks (or in my case SUVs) eligible. Most missed eligibility by 1 mpg, 17 v 18. It has been my experience when vehicle shopping that the people in the sales end of the car business are pretty ignorant of the technical capabilities of what they are trying to sell. One Nissan dealer I went to insisted that a 4WD Pathfinder was eligible under CARS. I told him I would help him look it up on the CARS site but he said he didn't have a computer (?).

    A final comment; I'm not rich but I pay federal income tax well into five figures even though I'm retired and don't make nearly as much as I used to. I don't think the CARS program is worse than subsidies to millionaire farmers not to grow crops or milk cows; or for the Interior to build roads at taxpayer expense for logging companies and oil and gas drillers on government land. Student loans paid for my undergraduate degree and the Government paid for my MBA in full (I made good grades). I'll take a wild guess that most of the whining here about taxpayers paying for new cars is sour grapes and not real concern over the transfer of tax revunue from rich to poor.
  • steverstever Guest Posts: 52,454
    Compel? If you don't want government aid, you are free not to apply for it and you're welcome to donate money to the Treasury if you feel bad about getting something for "nothing."

    But back to the topic, anyone in a mad rush to try to get a deal done this weekend?

    And - what are the odds of another clunker program getting passed this fall?
  • kathyc2kathyc2 Member Posts: 159
    Ok, compel may have been a little strong. How about entice? As in the government uses takes money from some and gives to others to entice them to do things what the government deems right; such as buy a new car (or truck :mad: ), buy a new furnace, buy a house, etc, etc. Nothing new, just ramped up to breakneck speeds recently.
  • steverstever Guest Posts: 52,454
    Hey, now, I got a new heat pump this summer. Part of the carrot was the $1500 energy credit I'm taking next April. :shades:

    Everything goes in cycles. Wait a few years and people will be grumbling that there's more government sticks than carrots out there. People seem to like this one because it was a more of a middle class carrot than many subsidies.

    I'd riff on how nice more urban cores would be if the carrot of suburban home ownership wasn't out there, but that's a bit far off-topic, even for a weekend.
  • kathyc2kathyc2 Member Posts: 159
    Nothing wrong with buying the heat pump. I'll probably look at replacing my 18 year old furnace next year strictly because of the credits. However, the 3-4K I might spend on the furnace will mean I'll cut back on other purchases. I would imagine people buying vehicles because of C4C cut down on other purchases they might have made.

    IMO it's not right for government to encourage spending in one sector over another. Especially currently, when practically all businesses are hurting.
  • andre1969andre1969 Member Posts: 26,023
    Hey, now, I got a new heat pump this summer. Part of the carrot was the $1500 energy credit I'm taking next April.

    I probably should've waited until this year to do my heat pump. But I made the decision last year, when home heating oil hit $5.62 per gallon. I averaged 450 gallons per year, so that could add up pretty quickly.

    Unfortunately, I dunno if putting a heat pump in a 93 year old house was really a good idea. They had to run all-new ductwork, and 93-year old walls aren't as easy to go through as modern ones. Plus I also had to get some major electrical upgrades. In the end, it came out to around $12,600 total.

    But, I'm also sitting here in a nice, cooled house right now. In the past, we had two window units downstairs and one upstairs, so we only had like 3 rooms that were really comfy in hot weather. Now the whole house is nice and cool. So, in the long run I guess it'll pay off.
  • steverstever Guest Posts: 52,454
    Changing people's behavior with economic carrots and sticks goes back at least to Jefferson, who protected small businesses with antitrust laws, even if they were inefficient businesses.

    Andre, my AC was totally dead, so I would have gotten the new heat pump system with or without the tax credit. I tend to defer a lot of purchases, but when you need something you spend the money. If I had clunked my car, I'd still pay my utility bills and hit the Thai buffet just as often.
  • 100chuck100chuck Member Posts: 149
    Well if you don't feel that it's right then don't take the credit if you decide to replace your furnace. Or here's a better idea take the credit and spend it on something you would not have purchase if you didn't receive the credit. :confuse:
  • fezofezo Member Posts: 10,386
    I hope your heat pump cost less than Andre's.

    I have to replace the furnace before winter kicks in. In a week i have to start getting quotes.

    I'm open to ideas.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • steverstever Guest Posts: 52,454
    Almost $6k before the tax credit, and I have a $500 rebate floating around in the system. The guy I went with matched the lowest of three bids I got (he was a boater, so that was a no brainer :shades: ). They didn't have to touch my ducts much. A neighbor ran AC ducts just to his basement with his new heat pump and his bill was a bit over $8,000.

    Someone may be lurking over in Home Remodeling and Repair with advice.

    York and Carrier had rebates back at the start of the summer; maybe some others.
  • fezofezo Member Posts: 10,386
    Thanks. Considering I otherwise might be looking at doing the AC in a few years this might be a plan. I'll start looking.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • kathyc2kathyc2 Member Posts: 159
    I think you are missing my point. In my annual budget I have an amount for home improvements each year. If not for the 30% credit from all of you (aka taxpayers) I would use next years money to replace carpet, and replace the furnace when it gives out. So, in my situation because of the government intervention, the carpet mill, store and installer may get left out.

    Not all of us are as independently wealthy as Steve to buy something big like a car without cutting back on something else. :shades:
  • stephen987stephen987 Member Posts: 1,994
    Good point, kathyc2. But the auto industry was a good choice as a target for federal stimulus money, because of (a) its size, and (b) the size and number of the industries that feed into it (steel, aluminum, plastics, electronics, etc.). When you put all of these together, it seems like $3 billion applied carefully to the auto industry at the consumer end is a much better deal than putting the same amount into an industry that doesn't reach as deeply into the economy. It's also a much better deal than giving that money directly to the Detroit Three, because it rewards manufacturers for building vehicles that meet mpg targets while still being desirable in their own right.

    I read something recently where someone was claiming that C4C should "only pay people to buy American cars that get at least 30 mpg combined."

    The money would've lasted a very long time with those restrictions. . .
  • steverstever Guest Posts: 52,454
    Yeah, I'm loaded. That's why I have a '97 wagon and my wife tools around in a '99 minivan. For about 9 years off and on out of the last 25, we shared a car. :shades:

    But I get your point although $4,500 off a car in our case would likely put us in a higher end model instead of shifting money to the carpet mill.

    One big proponent has stopped clunking a bit early:

    AutoNation stops offering Cash for Clunkers early

    "We're going to leave some deals on the table, we know that," Cannon said. "We just thought it was a smart thing to do."
  • marvin6marvin6 Member Posts: 72
    I think the dealers are screwing people over with the cash for clunkers in not negotiating prices. If you bought it (like you mentioned) on your own you got a much better price. If you use the cash for clunkers, they won't negotiate, but instead basically wind up taking the money the government intended for you. I've been following the camrys on fitzmall. Before the cash for clunkers you could get them for about $1200 below invoice.... not any more! I guess this is probably another example of why 99 percent of the dealers give the other 1 percent a bad name.
  • bpraxisbpraxis Member Posts: 292
    In a wonderful classic economics text call "Economics in One Lesson" by Hazlitz, one of the central concepts is not what is seen by C4C but the unseen consequences must be examined.

    I refer you to the "Broken Window Falacy" illuminated in the book.

    1. Have we simply moved sales that would have occured in the future to the present, at what cost?

    2, Those consumers who chose to take advantage of C4C simply did not use their money for other purchases such as a new washing machine, home improvements, etc. What about other manufacturers who lost sales because of C4C?

    3. Regarding those so called clunkers that are destroyed, how does that impact the ability of lower income individuals to buy a used car???

    etc., etc., etc.,

    The question I pose to all of you is do you want the freedom to make your own economic decisions or do your prefer a Washinton functionary to engage in central planning?

    What has been the end game whereever central planning followed its logical conclusions?
  • explorerx4explorerx4 Member Posts: 20,723
    i really don't know why you think many C4C buyer will 'cut back' on something else to buy a car.
    every sales person said many of the sales in the beginning were cash deals, no loan involved.
    lots of people have money sitting in the bank making vey little interest.
    i think there is spillover effect of people seeing other in their new cars.
    it makes them want one too.
    2024 Ford F-150 STX, 2023 Ford Explorer ST, 91 Mustang GT vert
  • steverstever Guest Posts: 52,454
    What has been the end game whereever central planning followed its logical conclusions?

    Moon landing?
  • 100chuck100chuck Member Posts: 149
    Hey I use my new Escape to haul a bunch of stuff to the Recycling Center, items I would probably in the past just put out with the trash. So is that an unintended consequences? ;)
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    The end game of reasonable central planning has been a prosperous European postwar recovery, and the end game of NO planning is USA 2009.

    it works all different ways. No one system of economics can be frozen in time and judged superior. Long views suggest that some central planning is good but not too much, and too much "free market" is disastrous.

    As for C4C robbing future sales to make current sales---maybe that's true---but if it saves the D3 long enough for them to restructure and get back on their feet, it would have been worth it IMO.

    The complete and sudden collapse of the D3 is just a totally unacceptable scenario. It would be akin to capitulation to European and Asian economic powers.
  • marvin6marvin6 Member Posts: 72
    I usually read and not post, but couldnt help myself today. Central planning was best seen in the former Soviet Union and East Block countries - i.e. the government does the planning. (North Korea and Cuba are classic examples today, but free market has its problems, too.) It worked for some - Gorbachov was minister of agriculture before taking over and his 2 percent of free market farmers grew 40 percent of all the food. He blamed the lack of success for the 98 percent of centrally planned / controlled growing on the weather! And it wasn't a sudden collapse of the D3 by any stretch of any imagination. A child of 10 who did not ride the short bus to school could have seen this collapse years ago.
  • gagricegagrice Member Posts: 31,450
    The complete and sudden collapse of the D3 is just a totally unacceptable scenario.

    You always assume it will be all 3 of the domestics. I firmly believe if one or two die the other will prosper and become profitable. I have history on my side with many cases of weak companies crashing and others becoming stronger. The government sticking their nose in generally prolongs the problems and makes recovery take longer.

    The chances of this C4C giveaway increasing total yearly sales is just pie in the sky dreaming. Sure a few smart buyers dumped some junk and bought sooner than they may have without the program. That means they won't buy for several more years. We need to get our mindset to the reality the 11 million cars per year is good. Let the poor automakers die and the good ones survive. The way it is now they are all scrambling to survive. With the Feds screwing up the works by subsidizing GM and C and letting the others compete against a seeming bottomless pit of Federal funds.
  • 100chuck100chuck Member Posts: 149
    You always assume it will be all 3 of the domestics. I firmly believe if one or two die the other will prosper and become profitable. I have history on my side with many cases of weak companies crashing and others becoming stronger. The government sticking their nose in generally prolongs the problems and makes recovery take longer.

    Gagrice name an industry that the government doesn't support with tariffs, subsidies and or trade agreements ? Farming ? Retail ? Banking? Energy? Steel? Housing? Healthcare? No
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    Central planning is not per se a dirty word, as it has variegated levels of meaning and content. Critics always calls up some diabolical totalitarian nightmare when talking about "alternative" economic theory, which is really not what Switzerland and Norway do for a living.

    In fact, most economic systems in the world today are partially planned economies, or partial command economies. Even ours.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    I firmly believe that all three of the D3 were on the verge of collapse without government aid. Even Ford is STILL not profitable, if you erase their debt write-off. If I show you three very *very* sick patients, why should you deny at least the possibility that all three will die?

    And even if Ford survived as the "only one", that's bad because it puts Ford to compete alone against the Japanese, and Koreans. Aside from Euro operations, that should be just about a massacre, don't you think?
  • 100chuck100chuck Member Posts: 149
    I agree with you 100%. I live in SE Michigan and the auto laid offs and plant closures have devastated this region.
  • imidazol97imidazol97 Member Posts: 27,675
    >devastated this region.

    In W. Ohio, the supplier plants and GM plants closing have really hurt this area as well. I don't think some people living in other parts of the country have empathy about what closing plants with high paying jobs like those does to a region.

    Actually, those plants and jobs aren't coming back to this area in the form of the past even if the BIG three increase production.

    2014 Malibu 2LT, 2015 Cruze 2LT,

  • 100chuck100chuck Member Posts: 149
    I don't believe they are coming back here either but I hope they can save the ones that are left.
  • marvin6marvin6 Member Posts: 72
    High paying jobs was a major part of the problem. I lived in MI and my neighbors were in the car making business and making 100k per year with high school diplomas. In fact, my immediate neighbor had a GED after quitting school in the 10th grade. She worked "piece meal" her last 15 years. I don't know how many "pieces" she had to make, but she had finished her job and was at the mall every morning when it opened. I don't think we should be paying for those "high paying jobs".
  • gagricegagrice Member Posts: 31,450
    I can name two that I am very familiar with. Farming and building houses. I never got a penny from the government while farming and or building houses. As a matter of fact trying to do so while that idiot Carter was in office nearly bankrupted me with the horrible interest during his totally failed administration. I have several contractor friends that are over taxed and over regulated with no help from state, local or Federal government.

    If you are talking corporate welfare for the mega ag companies like ADM, the banks and insurance bailouts, I would agree with you wholeheartedly. This government is doing their best to destroy small business. The jury is still out on whether this C4C will help or hurt the small auto dealers. Ask any small contractor what the government has done to help them.
  • elroy5elroy5 Member Posts: 3,735
    And even if Ford survived as the "only one", that's bad because it puts Ford to compete alone against the Japanese, and Koreans. Aside from Euro operations, that should be just about a massacre, don't you think?

    I don't think so. Why would loosing American competition hurt Ford? Every consumer that wanted to buy American, would then buy a Ford. I think the patriotic car buyers would rally behind the last remaining American car company. I don't think there are enough "American" buyers out there, to support all three American car companies. We could be keeping them all alive, temporarily, just to see them all fail later.
  • 100chuck100chuck Member Posts: 149
    As a farmer you don't benefit from the government policies that prop up food prices ? Or as a builder the importation of cheap lumber from Brazil and Building supplies from China doesn't help your bottom line?
  • gagricegagrice Member Posts: 31,450
    Not at all. You think the customer will let you charge US made prices for cheap Chinese materials. Right today contractors in our area are bidding jobs at half the price of 2 years ago. And still cannot compete with the illegals that our government refuses to eliminate. Not only does the government over tax small businesses. They do not enforce the laws that are on the books to protect US. I know your state is hurting just like CA. Look at this Congress and Administration for the reasons. It is going to get worse before it gets better.

    I know you are well aware that Michigan is bleeding jobs that will never return. The bailouts have only been life support that could make things worse when the reality sets in. The only automakers that survive will be in states the UAW cannot intimidate the workers.

    PS
    Most of our food here in SD is from Chile and Mexico. They can ship avocados to San Diego cheaper than we can grow them. Our water prices are killing us here. I am planning to pull out about half my fruit trees this winter. We get fined if we do not cut back on our water usage. My neighbor has a beautiful lawn. His last bill to keep it beautiful was $490 for two months. He is digging it up and just putting gravel out there.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    Patriotism is a rather dismal fall back position from product appeal and quality control, don't you think?

    The day of "product loyalty" are just about long gone anyway for the American consumer. We buy whatever is the best value for us. People jump car brands like TV channels these days. Any consumer researcher will tell us this.

    If Ford relies on patriotism, it's going down, because its one strong suit, pickup trucks, will never bring the profits it used to in the world of 2009.

    Besides all that, "country of origin" and 'domestic content' is all blurred in our minds now.
  • stephen987stephen987 Member Posts: 1,994
    Why would loosing American competition hurt Ford?

    Ask Ford CEO Allen Mullaly. He told Congress that Ford did not need government bailout money, but that he supported GM and Chrysler's request for it. A failure of one of those companies, he said, would lead to the collapse of critical supply networks.

    What he didn't say, but should have, is that throwing that many people out of work would leave a large number of Americans unable to buy any cars.
  • elroy5elroy5 Member Posts: 3,735
    OK, first you say we have to keep all three companies alive. Then you say patriotism will not work, and they will never see the past profits in "2009 world". Is the government supposed to support all three companies forever? Will they ever make a profit, ON THEIR OWN? When does it become too much? Please tell me?????
  • panchito2009panchito2009 Member Posts: 1
    Why ? because the money is going to a people who are going to hide it in foreigners banks!! Its like a bail out to a car dealers but who the heck bail people out?
  • kernickkernick Member Posts: 4,072
    Even Ford is STILL not profitable, if you erase their debt write-off. If I show you three very *very* sick patients, why should you deny at least the possibility that all three will die?

    Well you still continue to use an incorrect analogy of the relationship between the D3. The D3 are not 3 independent examples, meaning that if one dies it does not affect the others. Their market-demand links them, so what happens to one affects the others, either positively or negatively. Since there are fewer customers these days the failure of 1 of the D3 makes the others remaining stronger. The remaining D2 would get former customers of the dead-3rd company. Those extra customers would probably be enough (at least if GM had been the one going under), to allow enough customers to make the other 2 profitable.

    Start thinking of having enough food, water, and medicine for 2 patients to "recover", instead of trying to keep 3 alive when you only have enough to keep 2 going, and then you have a correct analogy.
  • kernickkernick Member Posts: 4,072
    Ask Ford CEO Allen Mullaly.

    As I said before and will say here another 1,000X's probably, you're very gullible if you're going to believe anyone 100% or 50% of the time, who has a $$$ interest in the auto industry.

    If you want to see blatant examples - go see the same-day quotes from Wagoner and GM during late 2008, which were like 2 sides of a coin.

    Mullaly as the head of Ford has a job which includes - saying Whatever is BEST FOR FORD at any given time. I'm not saying he lies, but he sure might promote some possible future scenario that is unlikely.

    Now why would Mullaly want loans for GM and Chrysler in late 2008? Maybe 10 people in the world could answer that correctly today - maybe it was because he didn't want short-term disruption to suppliers, which was at a busy time that Ford would have trouble redirecting its resources? but it surely wasn't because he wants GM and Chrysler to still exist, and take 2/3 of the domestic buyers. Ford would be very, very happy to see GM lose its pickup market which would support Ford very nicely.
  • kernickkernick Member Posts: 4,072
    So your point on government support policies is that the government should support ALL industries because some are already being supported in some ways? And this would then make the U.S. economy fair again? So how would this work from a $$$ perspective; have you thought about it? If every industry in the U.S. is run so inefficient that it's losing money and thus paying no taxes, and the U.S. government is putting mucho $$$ into each industry, where does the money come from?

    Instead of your position of more government involvement in more things, why not stop expanding and vote in people who support less government taxes, spending, and handouts? Make it fair by having no handouts.
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