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I wouldn't be too surprised to see another clunker program, but my feeling is that the next one will be more limited in amount, and more geared towards mpg improvements. You have a timeframe in mind? I doubt that we'll see another one before January.
GM was always under the threat of goign CH. 7 since the bailout wasn't a certain thing by our dumb gov't..... and buyers still touched them and bought them during Ch. 11 and before, during, and after. I believe buyers who were buying GM had no idea that Chrysler and GM had gone bankrupt.... at least not MOST of those buyers.
Knowledgeable buyers stayed away from GM/Chrysler during looming/impending bankruptcy regardless of which chapter number they were headed for. I just found out recently Pacifica trannies are a 35 day order item??? That's not a warranty, that's a joke!
So saying buyers would have considered GM less if they'd not had gov't assistance is overstating it. The power of the gov't to influence buyers by "backing the warranty" is very little. I don't think most people knew how bad a shape these automakers were in.
I would say the slow pay to dealers on C4Cs is well substantiated across the USA. From many viable sources. Even yours if you have any deals that are past 10 days from being submitted. Of course you like to spin the story to protect that bunch of incompetent idiots in Washington DC, which is your prerogative. If it was at all meaningful to the debate I can substantiate the lethargic payments after treatments from Medicare. So I am not sure what your problem is. It is obvious you are miffed about something.
Car dealers steamed about slow pay on Cash for Clunkers
"We're sitting with $1 million out," said Jim Bee, general manager of the Toyota of Bowie dealership. He said he has taken in between 150 and 160 clunkers and has not been paid a dime from the government.
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/19/AR2009081903929.- html
I certainly hope not. Enough is enough. When will the D3 support themselves?
I don't know a single dealer in my area that has yet recieved their first payment. ZERO!
That's different than slow.
There's no question about slow but so what. So what!! :surprise: We have more exposed than any other dealer in this region and all of it's covered at a minimal cost of ~ $20 per vehicle, if that. So what if it takes 20 or 30 or even 45 days, we'll get all our money and this will remain the best month profit-wise on record. What's not to like about that?
"We're sitting with $1 million out," said Jim Bee, general manager of the Toyota of Bowie dealership. He said he has taken in between 150 and 160 clunkers and has not been paid a dime from the government
Then there are the incompetent. If some dealers haven't been paid a single dime...then that's good...they apparently have screwed up somehow. What's bad for them is good for us. I'm sure that we gained a bunch of sales after the first crisis by some stores refusing to do C4C deals. We took them all, right up to yesterday. We did more than twice what that store apparently did and we're getting paid. Business is not a level playing field.
I couldn't care less. I try to put all three of them out of business every day.
In September 2008, our banking system came within a knat's hair of failing; in December 2008 we were days away of losing both Chrysler and GM which would have effectively shut down our entire domestic auto industry; there was serious talk that the banks would have to nationalized. We were losing over 500,000 jobs monthly but somehow things got really bad on Jan. 20th. Get real!
So how do you expect to stop the bleeding? Have the government rely on the free market? We had enough of that and you saw what happened....GREED at all levels! Lax oversight led to corruption, dishonesty, and destruction. Wall Street took us down this road; unfortunately, only the government has the money to keep things afloat until we get things get straightened out. That is the harsh reality! People don't like the government spending but i haven't heard of another solution that would work. Our current "free market" was built on the housing market and it was a house of cards. Not the house of bricks like in the fairy tales.
You don't like the Pelosi/Reid Stimulus package; I'll spot you the $700B bank bailout that Bush initiated. You don't like the automotive bailout; Bush gave GM and Chrysler the loans to get them to March so Obama could deal with it (way to pass the buck; you think he was ready to get out of office?). Don't like the "Cash for Clunkers"; Bush initiated two "stimulus" packages that sent checks to the taxpayers. Neither was effective but many conservative "economist" thought it was a great idea at the time. Don't like the health care reform; how about Bush's Medicare reform. That went smooth.
My point is there is enough blame to go around for the mess we are in and our children will face. You can point blame for any of the problems and situation we are dealing with to past presidents and Congress actions. We can debate all day long who is the blame, the Republicans or Democrats. The fact is this is the worst recession since the Depression. Our banking system is jsut getting its legs back. The housing market is showing signs of life although we still have to deal with the commercial real estate market. The private market cannot keep this economy going like many conservatives wish. Just can't happen! Too much of the wealth developed over the past decade was paper money. It comes and goes with the stock market. We lived beyond our means too long now we are paying the piper. You talk about government deficit spending. We are seeing today what happens with consumer deficit spending.
I hate all this government spending as well and I also don't believe this is a "Bush economy". But when you put the economy into the hands of the government which is what we did with the $700B bailout of the banks, this is what you get. I'm not an economist but I knew we were in trouble when Bush and Paulson announced this need for the bailout. The government is doing the only thing they know how to do....spend money. If you have a better solution, let's hear it.
The bad thing is with this program and the health care arguments (can't even call them debates), people are missing that existing house sales were up for the 4th month in a row and consumer confidence is up; If we can get the unemployment numbers to go the other way, there won't be a need for another Cash for Clunkers.
Ideal Government Program -- Build New Clunkers, Then Immediately Junk Them: Can anyone explain why American taxpayers are being taxed, via the Cash for Clunkers program, to subsidize the destruction of low-mileage cars -- while simultaneously being taxed to support General Motors, which just released a 426-horsepower, 16-mpg Camaro to complement its 556-horsepower, 15-mpg Cadillac? Under the Cash for Clunkers mileage rules, both cars classify as clunkers! Taxpayers are simultaneously paying to destroy old low-mileage cars and build new low-mileage cars. Check the Detroit-manufactured cars listed by the EPA as "worst in class" for fuel waste -- you are being taxed to subsidize the building and promotion of these cars. Plus, the White House and many in Congress want to begin restricting greenhouse gases. I think action against greenhouse gases is scientifically justified. But if greenhouse gas regulation is enacted, you will simultaneously be taxed to reduce greenhouse gases and taxed to support construction of polluting machines such as the 556-horsepower Cadillac, which the EPA says emits 11 tons of greenhouse gases per year, one of the worst global-warming scores of any current passenger vehicle. General Motors has started to build high-quality, good-mileage cars, including the new Malibu and the new fuel-efficient Equinox SUV. That's good news. Why are average people being taxed to subsidize everything General Motors builds, including wasteful, high-polluting rich men's playthings like this?
AP Photo/Michael Dwyer
New clunkers are rolling off the assembly line, subsidized by your taxes.Meanwhile, auto dealers who credited customers with $4,500 for clunker deals are discovering federal rebate checks have not yet arrived. What's the matter, dealers -- didn't you read the fine print? Perhaps auto dealers have fallen for a bait-and-switch! Here, a dealer negotiates with Barack Obama:
AUTO DEALER: Where's my check for $4,500? You said it was in the mail.
OBAMA: [Waves thick contract] Look right here, subparagraph 14d. It clearly states the money will be paid on the third Tuesday of a month that begins with a waning gibbous moon. You read subparagraph 14d, didn't you?
DEALER: No -- I was tired -- you assured me it was just paperwork.
OBAMA: Well! Maybe I can still get you the discount, if you buy rustproofing and splashguards.
DEALER: Your ads didn't say anything about rustproofing.
OBAMA: [Waves printout] Look, I am giving you everything below my cost. See, here's my factory invoice. My revenue is $2.2 trillion, yet I am spending $3.9 trillion. [Note: actual federal budget figures for current fiscal year]
DEALER: Wait a minute -- if you're really selling below cost, how do you stay in business?
OBAMA: We make it up in volume.
DEALER: Just give me my $4,500!
OBAMA: OK. I have to ask my manager. [Disappears into back]
DEALER: I wonder if he's really checking with his manager.
OBAMA: [Returns] Tell you what, you can use the $4,500 as a down payment on the $11 trillion debt your children will owe. While you're here, would you like free health care? It's going to cost you.
Because some people loves powerful cars and have a lot of money for car and gas. Some people loves to save gas and drives in AZ at 100F without air conditioner, some people loves to burn tires and gas. I see a lot of "S" series Audi with Euro plates in the front of the car.
It amazes me how much people read into what another posts. I quoted a Rep. simply because that was what was in the article, and he was stating what I thought. I don't know the history of this Rep. or if he's just seen the light in the last week. You're thinking that I'm blaming the Dems. and supporting the Rep. No far from it - my view on these subjects is that both parties are very similar in their policies and their both to blame. They both pander to society's current weaknessses of instant gratification, and to their corporate friends who buy and pay for their election.
WRONG. Obama never would have read anything. He never gives specifics just platitudes that sound good and the mice will vote for. To wit, his lack of knowledge about the actual House bill when questions started swirling about what the minions who wrote the 1 trillion dollar simulus pork bill wrote into the new healthcare spending bill. Has no idea. He's just a politician all for Hope and Change!
Now if the dealers (the owners with the money) have a big enough lobby and they can bring enough votes for 2010 and 2012, he'll be glad to do whatever they want. They can check with their local ACORN group on how to be sure those voters are registered properly in at least one place.
2014 Malibu 2LT, 2015 Cruze 2LT,
Do you think that might be a typical occurance after 8 years of any administration that the people are ready to elect the other party? In this case the media spent 8 years repeating whatever mantra was put out to criticize and diminish the office of the President, so the unthinking public was especially ready. One example would be the wars. The local Democrat newspaper regularly featured deaths and problems with the war on the front page along with wire articles about how awful Bush / Cheney was handling it. After Obama owned the wars, the 95 deaths are on page 12 in the lower left hand corner. Guess what was on the front page? Local articles about honoring a lesbian poet who was local and another foo-foo article about something local. No criticism of Obama having us in Iraq and Afghanistan. So the idea that the change of presidency party after 8 years was more a statistically expected change as well as a media-effected change.
I did read your later post about favoring neither party and they both cause problems. We need an able third party but the DC and Ohio crowd have things set up so it's almost impossible for a third party to get a foothold in the mechanics of getting elected and gaining control.
The spending of money to take over the private sector businesses is a main sticking point of people who object to the other two parties. The GM and Chrysler bailouts would never have happened along with allowing Fannie and Freddy to have such a hold in controlling the over-lending on mortgages.
2014 Malibu 2LT, 2015 Cruze 2LT,
Are you actually depending on ESPN for satire? That's sad. The essence of good satire is that it captures the truth, somehow. Thus, everyone knows Jon Stewart is the most trusted name in TV news.
There are no hidden, deceptive rules here. The enabling legislation, and the NHTSA implementation rule, are all sufficiently comprehensible that anyone bothering to take an hour or two to do so should understand the procedures. I find it difficult to understand how dealerships cannot find a single competent individual (a title clerk, a finance/insurance person, or a member of their accounting staff) to train in these matters. It isn't rocket science--the dealerships that are having trouble are the ones who leave it up to salespeople to understand the rules, or just don't care.
There are problems, such as the baffling gaps in the EPA mileage database, but considering the speed with which the program was implemented, and the small (5%) allotment for administrative costs, it hasn't been as problematic as I expected.
Stephen I worked in Purchasing and we send out with each Purchase Order the four things vendors need to do to get paid. You want to guess what percentage can follow those four simple steps? :confuse:
Yeah, I'd guess about 25% get it right on the first try. Another 50% get it right the second try. The last quarter have to be talked through it step by step on the phone, v-e-r-y s-l-o-w-l-y.
How close am I?
I think many that took advantage were not as interested in buying a new car as they were in getting rid of an old POC taking up space in the driveway. From that angle it probably added to the overall number of vehicles sold this year. So the dealers got a quick high and will now have to go back to the doldrums. That dealer had plenty of Corollas in stock. So that was not they big seller in San Diego. One of the largest dealers still has a handful of 2009 Corollas with big rebates.
yes!!! Yes!!! YES!!! I will definitely keep buying GM as long as they make AWESOME vehicles like these!!!
If that's all it takes, or even if it's 2 or 3 times longer than what you stated, then the C4C legislation and rules are a paragon of brevity, in so far as the federal govt goes, especially considering that this was a $3 billion program, for crying out loud.
I mean, we (my company) deal with Requests for Proposal (RFPs), Statement of Works (SOWs), and the like from the government all the time, many of them for contracts worth less than a million dollars, and it sure takes us a lot longer than a couple of hours to understand what's going on.
BUT: I read all of the C4C law and the implementation rule, start to finish, in about two hours, and it told me everything I needed to know as a C4C customer. I would assume that dealer personnel could do the same--with the exception of the "problem cases" amply documented in these forums (vehicles missing from the EPA database or mpg ratings changing, etc.)
The implementation rule includes samples of the relevant paperwork, along with what constitutes appropriate documentation, and pretty clear instructions on how to handle the submission process. If you can fill out a 1040A or 1040EZ (nevermind the "long form" 1040 with schedules A-E), you can certainly do the paperwork for a C4C deal without much difficulty.
The online submission system did have major problems, leading to some delays. And NHTSA did not adequately anticipate the volume of deals they'd have to work through. But again, considering the timeframe they were given for implementing this program, I think they could've done a lot worse.
The market for this type of car is shrinking rapidly, not growing. So fine, these are "halo" cars but they aren't going to make GM any money.
The net cost is almost nothing. The profits from the program are off the chart.
Another unmentioned factor in the current automotive environment is the improvement in the pricing of USED cars. Traditionally in the US market 2 out of every 3 vehicles sold are used vehicles. Three factors have occured to change the dynamics of the USED market.
1. The decrease in the level of business due to the weakness of the economy over the last 10 months means that more people are keeping their vehicles and not trading them as quickly as they were in the past. This reduces the supply of vehicles being offered for sale privately.
2. The lack of new car business over the last 10 months means that people have not been buying and trading as they were in the past. Thus the supply of USED vehicles on dealer lots was reduced over that time and the supply going 'thru the lanes' at the auctions has also been greatly reduced.
3. The C4C turn-ins have eliminated 700,000 very old vehicles....also reducing supply.
Result: the pricing of USED vehicles is very very strong right now with no quick boost in supply foreseen. e.g. EC auction values for 2 y.o. Corollas with 20K are above $15000. A new 2010 with ZERO miles is $17,900 MSRP. A store that buys a 2 y.o. Corolla at auction has to sell it about $900 under the MSRP of a new 2010. Something's gotta give.
I do agree with your analysis. I am not sure that people keeping their vehicles longer is a bad thing. I am sure you and all the salesmen would disagree with that premise. Many small used car dealers are out of business here. Empty car lots everywhere.
I am wondering how many vehicles sold as C4C actually ended up being resold. The Mexican fellow that works for me just bought a 2000 Dodge Ram PU truck in Tijuana for $4500. Ring a bell? It had not been registered for two years. I wonder if a dealer took it in and realized he screwed up and wholesaled it across the border. He says in runs great. He cannot drive it back up here till he gets Mexican license on it.
I think he needs to get new accountants if 160 clunker deals equals 1 million dollars out.
160 out at the full 4,500 dollars is only 720,000 dollars.
I would think if the Feds have the final tally they should have credited all the accounts. I am not sure the extra people they hired from the ACORN temp service have a clue what to look for. :shades:
Yep, that would be Toyota of Bowie. :P My uncle bought his '03 Corolla from them, and it had to go in for repairs when he had an accident. He hit a deer and the result made his car look almost as bad as those NHTSA offset-barrier crash tests. They had his car several weeks. At one point, they misplaced it!
But, that was also years ago...I haven't had any dealings with them lately, and my uncle hasn't dealt with him once his car was out of warranty. So maybe they've improved since then? From British Rover's post above, my guess is probably not.
I pointed out a third or so of the cars he were claiming as clunkers were either too old or got too good of mileage to qualify. He as adamant that all the cars he took pictures of were clunkers confirmed by the dealerships. Those dealers will never get paid on those deals they are SOL.
If you figure five different dealers in one metro area had that many obviously rejected deals how many do you figure there are nationwide?
Still don't know if I believe what the other guy is saying about the cars he took pictures of. NONE of them had CARS or C4C written on the windows and most still had plates.
Market Share of Clunker Sales link
MAKE PERCENTAGE
Toyota ...... 19.4%
GM ............17.6%
Ford ..........14.4%
Honda .......13.0%
Nissan ........8.7%
Hyundai ......7.2%
Chrysler ......6.6%
Kia ............ 4.3%
Since GM has divested itself of significant pieces of its former self which lastly had about 20-22% of the US market these numbers look to me to be what the composition of the market will be in the future. Comments?
When I purchased my Escape the first week my Dealer only had four FWD 4cyl
left and this was the first week.
So we really all will be looking for programs to move us out of gasoline powered vehicles soon. And this means massive government programs to enable it.
That said, C4C did more to help the economy than the 700+ billion bailouts did. Considering the price it was money well spent.
Sorry couldn't help myself... :P
Hearing about this dealers caught out with the Federal Government owing them money is starting to get old. While it does hurt cash flow, a business such as this should be able to draw off an available line of credit. If they have $1M outstanding for 60 days at 6% what's that $10K?
Washington has no resources until it takes them from you.
What is the end game of printing money and going into debt?
Has any country in history been able to print its way to prosperity?
How did printing fiat money work out in China 1000 years ago, France 300 years ago, Germany 70 plus years ago and countless other countries?
Actions have consequences.
Yes, they do. The C4C consequences include keeping people at work v. being let go. Those people will earn paychecks. Those checks will have income tax withheld, returning part of the C4C money back to the federal gov't. There's also the eliminated expense of paying unemployment benefits (and other welfare programs) to those people who kept their jobs, or in case of the 1300 GM workers, were recalled back to work after being laid off.
At the state level, those 690K sales put sales tax revenue into the less-than-empty state coffers. It also generated fees/funds for the DMVs. Some counties and cities have sales tax as well; they also got a slice of the pie.
Those people who kept their jobs now have income. They'll spend a good chunk of it. So the money will work its way through the economy over the coming months, causing others to have/keep jobs, pay income tax, have & spend income, etc.
That's what a stimulus should do; feed the economic cycle from the bottom up. It's been demonstrated, and we've all been living through it for almost 30 years, that stimulus for the top (trickle down) is an utter failure.
Oh, as someone noted, it also reduces our gas demand by over 200 million barrels a year and is better for the environment.
I believe that was speculation that the new cars from the C4C program would save 200 million+ GALLONS of gas per year. Which is less than 1/10th of 1% of our annual consumption of gasoline.
The C4C consequences include keeping people at work v. being let go.
For what an extra 6 weeks. I have already pointed out, that we could hire 60,000 people and pay them $50,000 per year with that $3 billion. I don't think anyone here would try to spin C4C into keeping or creating 60,000 jobs for a whole year.
Just because it was better than all the other wasted money in the Stimulus package does not make it a wise use of tax payers dollars.
Better yet Congress could hire about 145,000 people that are out of work and pay them $10 per hour to clean our highways, byways and parks, for a whole year on $3 billion. Too bad there are no real thinkers in our government that can make money stretch out and help more people than just their crony buddies and lobbyist.
The program pays for itself. Don't worry not a dime of your money is being used.
This is above and beyond all the tax payments received by the IRS and the 50 states simply from this program.
This is one of the smartest and best programs that the government has ever put together.
I don't know whether or not this will happen, but I do know that people have been saying that we'll soon run out of oil for over 50 years. Since oil is a finite resource, one day it will be depleted, but estimates of when we'll run out, ir run out of cheap oil, vary widely.
An alternate scenario is that gasoline could go to $20/gallon not because the world is running low on oil, but because of inflation.
You may be right. I find that very sad. It further erodes my confidence in this Congress and administration to get US out of this recession in a normal time frame.
Talking to our comptroller yesterday we have been paid on 10% of our C4C deals and the rate of payment is increasing. I figure by next week we will be mostly caught up.