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Yeah, that kind of thinking annoys me, too. Heck, if you got me out of my 10 mpg Silverado and into something that only got 15 mpg, over the course of 12,000 miles that would save 400 gallons of fuel. Enough fuel to allow a 30 mpg car to go 12,000 miles.
I think people just get too hung up on EPA numbers, when they really need to focus on how many gallons of fuel per year the thing uses. And it's easy to get hung up on those numbers...I've been guilty of it myself. When the current Civic came out, it was rated 30/40, which I thought sounded really impressive. At the time the Corolla was rated at 30/38, but IMO, that 40 mpg just sounded more impressive. But the reality is, I drive locally much more often than I go out on the highway, so it's a moot point. And even if all my driving was pure highway, and presuming I got those numbers, over the course of 12,000 miles, 40 mpg versus 38 saves a whopping 16 gallons (300 versus 316)
The flaw in the law did not allow the truck owner to buy a high mileage car for his commute. If the 12 MPG truck was traded for a the 50 MPG Prius the savings over 15k miles would be 950 gallons of gas.
I agree that the compromise was to unload a pile of trucks backed up on the car lots. I think you will be hard pressed to get 19 MPG from a Ford F150. Most will buy the 5.4L V8 and get about 14-15 MPG. That will only save about 178 gallons per year.
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The actual Green plan would have been to make it apply only to used vehicles that met the more stringent standard of 10mph and apply it across the board no matter what you were trading in. And it wouldn't have mattered about the MPG, either. You could trade in a 25mpg Civic for a 35mpg Yaris and have been good.
That way you really would get people out of trucks and SUVs and into cars. YOu would also re-use older decent condition vehicles instead of wasting resources producing new ones needlessly.
The real problem with the entire program was that it didn't let people trade their older vehicles in for certified or similar vehicles and forced you to buy new. Also, it went off of original MPG instead of factoring in age or pollution levels, so my truck for instance got 19mpg officially. Yet I'd have gladly traded it in for a 29mpg used vehicle in a heartbeat. The last time it was smogged as well, it barely passed at nearly 250ppm. A 2-3 year old Civic, for instance, gets closer to 20-30 ppm. So I'm using more gas and polluting more and somehow the program doesn't apply to me... That seems counter-intuitive.
Well, it would be if the real goal was to reduce pollution and get older clunkers off the road. Of course, it's clear to anyone that it wasn't. So 3 billion gets flushed down the drain and makes a small blip in the economy.
I can see both sides of that argument.
On one hand, it's more fair, because it doesn't discriminate against people who bought efficient cars to begin with.
OTOH, that Civic would make a good, efficient used car, so why pay to take it out of circulation?
As with the Home Buyer's credit, expect rules to be "relaxed' somewhat and perhaps a cap on the credit at $3,500. After the 4Q09 sales results are out in Jan10, I expect another C4C bill on the table by February.
Me? I'll trade my '06 Lucerne in for 2010 compact sedan that gets 35 mpg hwy if they give me the $3,500. The Lucerne is paid off and I've got cash. No loan here.
About 1 in 7 of all deals went for vehicles that got 20 mpg or worse. If you think about it, though, 20 mpg really isn’t such a bad rate ... for 1979.
I'll take it, and I haven't even seen it.
I expect the 2010 "CARS" rebate to be opened up to any new car purchase, allowing a $3500 credit for improved MPG. I'll take $11K for my Lucerne plus a $3500 for buying a new vehicle that averages 10mpg more than my car.
I expect this to happen no later than March 2010.
It's far more important to get old gas guzzling clunkers off the road and kill them then to worry about the appearances. The Yahoo dope missed how beneficial it was to allow those 95000 truck owners to get rid of their clunkers. It was better to get these 95000 owners into new trucks than it would have for 95000 2004 Camry owners to trade up to 2010 Prius'. Significantly better.
However I do agree with our buddy gagrice that barring truck owners from trading into cars was dumb, a bone thrown to the detroiters.
15 mpg to 25 mpg saves 400 gal over 15000 miles ( F150 to I4 Fusion )
20 mpg to 30 mpg saves 250 gal over 15000 miles ( V6 Malibu to Cobalt
30 mpg to 40 mpg saves 125 gal over 15000 miles ( Civic to Insight II )
However, a 5 mpg improvement..
15 mpg to 20 mpg saves 250 gal over 15000 miles ( V8 Tundra to V6 Highlander )
Getting a driver to trade up from a Civic to an Insight II is frankly a waste of money. That money would be better spend getting the F150 driver into a Fusion.
Now if a sliding scale of incentives were implemented....
Fuel saved per 15000 miles driven
Over 100 gal up to 200 gal $1000...Civic to Insight II
Up to 300 gal $2000..................... Malibu V6 to Cobalt, Tundra to Highlander
Up to 400 gal $3000..................... F150 to Fusion I4
Over 400 gal $4000...................... Ram to Prius
What's the really big deal is getting old cars off the road. I can guarantee that a 20 year old LeSabre pollutes 8-10x as much as most new cars, despite getting 24-25 mpg average. The pollution saved is the big deal, and new trucks hardly are any better than the old ones. The whole have to trade a truck for a truck part was also sheer idiocy.
As for why take a 25 Civic off the road? Well, a 15 year old or so Civic is a polluting heap that's on its way out most likely. I see a lot of old commuter boxes like that that are falling apart - but they didn't qualify, either. Shoot, I wonder how many Neon owners would toss those things if they could.... probably every last one of them.
Or do people who drive more tend to choose cars that get better mpg?
No he'd drive the same distance more efficiently and pocket the savings to spend on something else.
I love that idea, brilliant.
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Hey I'll take it. If and when the "CARS" 2010 kicks in, it shouldn't be a Cash For Clunkers deal but based on MPG improvements. Say 10mpg better as you noted but the old vehicle can be "traded" as in any other deal. Yes the credit may be lower but talk about getting millions of people into dealerships next spring? This thing could sell 2 million cars in a month if allowed.
If "CARS" 2010 averaged $2K per vehicle and $4 billion was allotted to it, dealerships would run out of paper to print contracts on! I realize used car dealers would be livid but offer one month only then - March 2010.
And here's the best deal:
"Golf Cart Man is referring to his offer in which you can buy the cart for $8,000, get a $5,300 tax credit off your 2009 income tax, lease it back for $100 a month for 27 months, at which point Golf Cart Man will buy back the cart for $2,000. "This means you own a free Golf Cart or made $2,000 cash doing absolutely nothing!!!"
Cash for Clubbers (WSJ)
The only catch is you have to buy one that's street legal.
http://www.sdstreetlegalgolfcars.com/3.html
What got me to thinking was the passionate defense of the program by some who try to justify the taxpayer expense by all sorts of examples. Energy saved here, jobs saved there, getting off of foreign oil, cleaning the air, etc., etc. I think gagrice once remarked on the amount of energy it takes to build a Prius or any other car for that matter. Just think how much energy Cuba is saving by recycling old cars!
What is most striking is the casual way we are spending Billions of dollars without batting an eye. Many posters have suggested ways to improve the CFC program, and they are good ideas. Could not the dept of energy (with 60,000 employees and a $26 Billion budget for 2010) have provided some input. Incidentally, the dept, which was created in 1977 with the express purpose of getting us off of foreign energy has not had much effect.
My main point is that CFC was bad simply because the government injected taxpayer money into a program that they did not think through, did not execute (remember dealers waiting for $ and the paperwork burden) and which distorted the free market, the consequences of which we have yet to see. Car dealers were caught flat footed and ran out of cars, junkyards don't have time to properly harvest parts and of course some government money was stolen.
And of course the $3 Billion is all borrowed money and at 3% per annum over 60 months our cars payment would be $53,906,071,99. (Interest of $234,264,319.40) Heck, that's only about .78 for every man woman and child in the US. I guess CFC wasn't so bad after all.
Regards, DQ
This was stimulus money as part of the $787 Billion allocated to stimulate the economy. It was authorized by Congress for exactly this purpose. It's working as the economy turns around. It worked too fast and too quickly.
The throught behind it and the depth of the benefits is far more than your cursory summary. It was in the works for 8 months. It simply worked too well too fast.
http://www.gogreenmobility.com/new/E-Cars/models.php
There's going to be a golf car version of SEMA one of these years. :shades:
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By next spring Stimulus Bill I will be winding down and we are already talking about Stimulus Bill II. It won't take too much lobbying for a 2010 "CARS" bill to pass. We've already got $100 billion in GM & Chrysler and GM is going to need a lot more help to get through 2010.
As opposed to handing GM another multi-billion dollar "payment", we might as well do CARS 2010 with more liberal rules that do not require the "trade-ins" be destroyed; just assure the purchased vehicle gets 10 mpg better than the old one.
Americans can't pass up a perceived bargain. Open the thing up to anybody who wants to trade for a much more efficient vehicle and people will be coming out of the woodwork.
http://www.freeelectriccar.com/?gclid=CNT8rLLS9Z0CFSQNDQodnXy0pg
Well, maybe they could have some kind of mileage threshold and condition standard, whereby if a car is efficient enough, and would still pass smog tests, it can be re-sold?
From what I've seen, usually some extenuating circumstance happens that requires more driving, and then that forces the buyer into a more efficient car. For instance, if you moved further from your job, or your job relocated further from your home. Or if something happened that you suddenly had to start driving more, such as to regularly check in on a sick/elderly relative. Or you took a job that just required a lot of driving, like delivering pizzas, courier, etc.
When gas prices go up, people with guzzlers might start cutting out some unnecessary driving. I'm sure some people with more fuel efficient cars do, as well. However, when prices go down, or people get into a more efficient car and start driving more again, I don't look at that as driving more, in the strictest sense of the word. It's more like returning to normal. If I drove 10,000 miles per year when gas was cheap, but cut back to 8,000 miles per year, then I might return to 10,000 per year if gas got cheap again or I got a more efficient car. But that's not to say I'd suddenly jump to, say, 15,000 per year just for the hell of it.
Who ever thought up this cash for clunkers deserves the "purple finger of fait" Our nation needs a huge turn around and quit rewarding those who are so nonresponsible.
I wonder how many dead beats with junky credit got a new vehicle because the banks saw a big down payment? It seems to me there just might be a huge repo rate of returns.
TO SUM IT UP THIS WAS ONE HECK OF A SCREWED UP PROGRAM THAT FOREIGN MADE VEHICLE MAKERS MADE OUT LIKE A BANDIT!
FAROUT
Well, at least you're one data point to offset that other dude here on Edmunds who's always griping about his 1994 Neon! :P I agree though, it would have been nice if they had made a concession to people with higher-mileage cars, to encourage them to get something newer and more economical. FWIW, a Neon from that era (I'm guessing you meant "1996", and one finger just got ahead of the other when typing) is rated at 25 combined with the automatic, 28 with the stick. Not horrible numbers for the time (and considering the Neon only had a 3-speed automatic) but it wouldn't be hard to find a new equivalent car that did better.
However, this bill was written mainly to benefit the dealers and manufacturers, to move stock off the sales lots. Another intended benefit was to cut dependence on oil. And by targeting the biggest guzzlers, that's where the biggest fuel savings are. If you get someone out of a 15 mpg vehicle and into a 16, you save as much fuel as getting someone out of a 25 mpg vehicle and into a 28. If someone has a 35 mpg vehicle, you'd have to get them into a 41 mpg vehicle.
This bill was also intended to get money moving in the economy again. By giving people $3500-4500 to trade in a qualifying vehicle, they've gotten those same people to turn around and sign up for loans of $10K, $15K, $20K, what have you, up to whatever the MSRP limit that the gov't set. Local governments have benefitted in the form of taxes for titling and registration. Insurance companies have benefitted as liability-only clunkers are replaced by full-coverage vehicles. Lending companies have benefitted.
And with this extra money going into people's pockets, theoretically they're going to spend more, so local businesses and such are benefitting. However, that one might be a double-edged sword. While buyers are putting money back into the economy in the form of car payments, titling taxes and such, it's also reducing their disposable income. That $200, 300, whatever per month is now tied up in a car loan, rather than being used for other types of consumption.
This bill wasn't really written with the car buyer in mind, though. Sure, we benefitted from it if we had a qualifying "clunker" and traded on a qualifying new vehicle. But We The People were never intended to be the primary beneficiaries of this; at least, not at the point-of-sale.
Would that the government display the ingenuity of the golf cart people!
Regards, DQ
This $3 Billion is a tiny part of the overall stimulus package. This one helped one limited sector. Other parts of the stimulus help other sectors and do nothing for the auto industry. This $3 Billion is 0.38% of the overall package.
Some respected economists like Paul Krugman believe that the stimulus will fail simply because it wasn't big enough!!! They believe that it should have been 50% larger at $1,200 Billion ( $1.2 Trillion ). We'll have to wait and see on this one.
So there's another "supplier" enjoying trickle-down benefits. As do Sirius's "suppliers".
Cash-for-clunkers boosts Stream client Sirius (Eye on Business)
i never would have selected it as an option, but i just ended up renewing for 2 years.
weren't reported new vehicle sales up in October?
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99.9% of the time this is true. Unfortunately we're in the other 0.1% now.
I don't like the idea of spending money we don't have in hopes of getting some of it back through increased economic activity, but when Stimulus Bill I runs dry next summer we'll still be in a world of hurt.
I believe we'll see a slightly smaller "Stimulus Bill II" along with "CARS II" by Spring 2010. Hopefully CARS II it will be opened up to anyone willing to buy a significantly more efficient vehicle and not another C4C deal that requires the trade in to be destroyed.
That was very farsighted of you. Most people didn't buy Neons until they actually came out, in January 1995. Congratulations on your brilliant decision!
I'd like to sum up my opinion of the CFC program and all the other government giveaways by offering the following quotation:
" You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else.
When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend is about the end of any nation. You cannot multiply wealth by dividing it."
Dr Adrian Rogers (1931 -2006)
Regards, DQ
it's unfortunate because many of those not working would like to.
Yes, and the Nobel prize wasn't awarded to some deserving candidates. For example, Ghandi never received the Peace Prize.
The Keynesian cures:
* Inflation to force real wage rates down
* A central bank to lower interest rates, which reduces savings.
* Governments using fiscal stimulus, even running deficits, to stimulate current consumption.
Read the book
This debate further exemplifies just how divided this country is.
Even your reference implies that deficit spending is OK in order to stimulate the economy, just not a continuous stimulus.
Re: "You cannot pump-prime an economy perpetually, stimulate consumption, and not suffer any negative consequences," a statement with which I happen to agree.
Again every major economy in the world is employing Keynsian methods right now...even as late as this week. As reported by the NYT today....
http://www.nytimes.com/2009/11/10/business/10markets.html?_r=1&ref=business
quote:
Shares on all three continents rose after finance ministers said over the weekend that they would push ahead with efforts to revive economic growth through interest rates and increased government spending. The Dow Jones industrial average ended the day more than 200 points higher
unquote:
That's a majority. You remain in a small ineffective minority notwithstanding any support you might muster for your viewpoint.
Because there is a total lack of confidence in the US dollar and our ability to stabilize our economy.
“A lot of it is sentiment-driven and there the dollar is getting a vote of no confidence,” Mr. Dolan said. “The massive borrowing by the U.S. government is undermining confidence in the longer-term outlook for the dollar.”
I have no faith that this Congress and Administration will do anything to correct the problems. We continue to lose jobs. Consumer confidence has not risen. The stimulus is not doing as it was hoped for. So if they are using Keynesian principles they don't seem to be working. The deficit this year alone will surpass the total of the last 10 years. I have to assume you have no children or grandchildren that will be buried under this load of debt.