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Cash for Clunkers - Does it Work for You?

Kirstie_HKirstie_H Posts: 11,077
The Savvy Shopper: Cash for Clunkers - Is it for you?

Do you have questions or comments about how this program will work? Here's the place to ask.

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  • bhill2bhill2 Posts: 2,086
    The list of clunkers given in the article starts as 1990. I am sure that this is for space reasons, but is there a limit on how old the clunker can be or how many miles it can have? I have a 1985 Mercedes 380 SE that still runs great, but has 250,000+ miles and is getting a little worn out. Would it qualify? Oh and yeah, how do I find out what the EPA gas mileage figure is on it?

    2009 BMW 335i, 2003 Corvette cnv. (RIP 2001 Jaguar XK8 cnv and 1985 MB 380SE [the best of the lot])

  • tidestertidester Posts: 10,059
    I don't believe there is any limit on the age of the car. The EPA estimates for the '85 380 SE are 14 mpg city, 17 mpg highway and 15 mpg combined.

    tidester, host
    SUVs and Smart Shopper
  • andre1969andre1969 Posts: 23,656
    my understanding is that the age range is 1984-2001, and for fuel economy, it has to score 18 mpg or below on the combined rating, using those new numbers they came out with in 2007.

    Fuel economy ratings are available at http://www.fueleconomy.gov. However, one thing that confuses me is 1984 model cars. As far as I know, only the raw laboratory numbers are available for them, and these numbers are much more generous than the numbers they used for 1985-2007, or the even more dumbed-down numbers they use now.

    Just doing a quick scan through those raw 1984 numbers, the only domestic cars I see that would qualify would be ex-police cars. The Gran Fury/Diplomat and Crown Vic are rated 17 combined, while the Caprice is rated 18. On the foreign front, about the only cars that would qualify as guzzlers would be exotic stuff like Ferraris, Lamborghinis, Rolls Royces, etc.
  • lemkolemko Philadelphia, PAPosts: 15,306
    Wouldn't have helped me apparently. My '88 Park Ave was too fuel-efficient. Would've been nice if I could've got $4,500 towards a 2010 LaCrosse!
  • tidestertidester Posts: 10,059
    my understanding is that the age range is 1984-2001

    The bill has no specific age provisioning. The 1984 model year stipulation only has to do with how the gas mileage is figured. From 1984 onward, the official EPA gas mileage estimates are to be used while gas mileage for model years from 1978 to 1984 will be determined by "the secretary" somehow making use of EPA and NHTSA data (the formula is not prescribed). From what I can tell, "the secretary" will determine eligibility for earlier model.

    tidester, host
    SUVs and Smart Shopper
  • bhill2bhill2 Posts: 2,086
    Thank you for all who provided information on this. In fact, I found a web site, http://www.cars.gov/ that gives the information that I was requesting; both age limits and gas mileage values. It states that the car must be less than 25 years old at trade in. That makes MY 1985 cars the oldest that qualify, and those only until the end of the year.

    2009 BMW 335i, 2003 Corvette cnv. (RIP 2001 Jaguar XK8 cnv and 1985 MB 380SE [the best of the lot])

  • I've had my eye on this bill for a few months now, but the final language may exclude me. I am 25 and still drive the 1994 Jeep Grand Cherokee that I learned to drive in when I was 16. It was registered and titled in my parents name for all those years, even though I started paying insurance on it in October 2008. The title was transfered to my name and it was registered in my name January 2009.

    My question is: This October 2009, will providing documentation showing insurance for 1 year, and the continuation of ownership from my parents to me allow me to qualify for the program?
    We've had this car forever and it would seem very out-of-spirit of the law to disqualify me for what appears now to be a very poorly timed title transfer.

    Any thoughts? Is there anyone I can contact about this? Any way to have an exception made?
  • joel0622joel0622 Posts: 3,302
    Well I see it is business as usual for the goverment. They were so excited to say look at us we did something that they have this thing so confusing it isn't even funny. They also have the cart before the horse. The dealers still have no idea how to sign up, we don't know what to do with the cars, we don't know who is going to pay to have them scrapped, who pays to get them to the scrap yard, etc,etc, etc, etc.

    My understanding is that there is an age restriction. The cars can be no older the 25 years.

    Allot of good info on the official site

    cars.gov

    Your trade-in vehicle must

    have been manufactured less than 25 years before the date you trade it in
    have a “new” combined city/highway fuel economy of 18 miles per gallon or less
    be in drivable condition
    be continuously insured and registered to the same owner for the full year preceding the trade-in
    Note that work trucks (i.e., very large pickup trucks and cargo vans) have different requirements.
  • I'm trying to purchase a Honda Accord LX-P. I was wondering if anyone could advise me on whether to wait for this bill to go into effect for my SUV that qualifies for $4500, and lose the Honda incentives, or go ahead and buy the accord, and later try to sell my SUV (I know I wont get $4500 for it if I sold it).
  • volvomaxvolvomax Posts: 5,274
    How much are the Honda incentives and how much could you get for your SUV?
  • jeff71jeff71 Posts: 11
    I think that you are probably excluded on this technicality, but you can hold out hope that the program will be extended beyond November and you will qualify in January.
  • I would qualify for $4500 with the bill. If I traded in my SUV right now, I would probably get $3500-$3700. The incentives are 3.9% APR and $1500 cash to dealership, which got me a quote for $19270. If I waited until after July 6th, which is when the incentives end, I would lose the $1500 reduction in price. Do you know if Honda offers incentives more than once in a year?
  • volvomaxvolvomax Posts: 5,274
    like everyone else, Honda probably offers some kind of incentives all the time.
    Doing the deal now might cost you a grand, waiting might cost you more.
  • oldfarmer50oldfarmer50 Posts: 14,431
    "...waiting might cost you more..."

    Especially if the car companies cut back on incentives because Uncle Sam is providing them. ;)

    2019 Kia Soul+, 2015 Mustang GT, 2004 Chevy Van, 2000 Chrysler Sebring convertible

  • greanpea68greanpea68 Posts: 1,996
    Doing the deal now might cost you a grand, waiting might cost you more.

    Replies to this message:


    Nope doing the deal would cost him $3000 right now.... What you were reading is what he thought he could get for a trade in.... but did he have his vehicle appraised? And it is my understanding he would get sale price... trade in.... incentives rfrom manufacturer.... than minus the (bail out) $4500 gov. rebate.... Go ahead and wait.... I can't wait to see how this one plays out.... As I and Joel have said, Who is responsible for the cash ($3500 or $4500) who is responsible for paying of the disposal of the vehicle???

    Awesome.... Now we get to add another fee tothe contract... $1195 for disposal fee :P

    Can't wait to see how this unfolds.... not enough things in place for it tohappen right now :surprise:

    GP
  • volvomaxvolvomax Posts: 5,274
    Obviously, I'm assuming his trade is really worth $3500. It may or may not be.
    Deal now would be car minus current incentives minus $3500 trade.
    Deal future would be car, minus future incentives(which can go up or down) minus $4500 gov't cheese.
    Disposing of the trade wouldn't be tough. Call a wrecking yard,have car hauled away, get receipt from the wrecking yard that the car was scrapped.
    IF his trade is worth $3500, the most he would gain by waiting is $1000.
    In the grand scheme of things,may not be worth waiting for. Trade could take a dump, Honda incentives could go down. Just a roll of the dice.
  • Thanks for all your insight in weighing this out with me. My SUV has a trade-in value of $3600 according to Kelly BB. I went in to the Honda dealership today and basically told him that I would trade in and buy a car TODAY if he would give me something close to the "cheese" that the govt would ($4500). So he gave me $4300 for the trade!! I asked him then to also absorb title and registration fees which was another $267. So I guess I didn't risk waiting, rather took the Honda incentives & special APR. When I punched the #s in, it was more lucrative to take these while they were being offered, than getting the $4500 from Uncle Sam and possibly losing out on the incentives, not to mention the salesman's struggle to somehow sell before June 30th. I am a "she" by the way :) Thanks again.
  • After poring over the bill for hours and calling the CARS hotline, I finally figured out how the bill works. First the dealer has to register to participate in the CARS program. If the traded-in vehicle fits the criteria of the bill, the govt gives the dealer a voucher for either $3500 or $4500 (which ever applies). The dealer can only apply for vouchers after he registers and cannot apply them retroactively. The dealer is then responsible for scrapping the trade-in - not YOU or ME!!!. We'd never get to see the voucher the dealer gets for the trade-in..the amount simply gets subtracted from the sale price of the new vehicle. Hope this helps!
  • greanpea68greanpea68 Posts: 1,996
    The dealer is then responsible for scrapping the trade-in - not YOU or ME!!!.

    For the record I work for a dealer..... You are correct but, the concern is how long will it take before the dealer recieves his money from the government

    GP
  • joel0622joel0622 Posts: 3,302
    GP, the cars.gov site says within 10 days. My question is who pays to scrap the cars? Can we sell them to a junk yard? do we have to pull the tranny and block?
  • greanpea68greanpea68 Posts: 1,996
    My question is who pays to scrap the cars? Can we sell them to a junk yard? do we have to pull the tranny and block?

    That is some of the questions we have here also... Who is going to pay for the disposal of the vehicle.... My understanding is that we need proof that the vehicle had been completely destoyed to recieve payment from the government... What about the transport fee to the junk yard.... It appears to me that these services will be included in the Vouchure of $3500 or $4500 , I don't believe Obama will pay for the tow, and the destuction of these vehicles :surprise:

    GP
  • The dealer is responsible for the towing, and annihilation of the clunker.
  • joel0622joel0622 Posts: 3,302
    Found out two things yesterday. One is that any dealer caught not executing the program properly will be fined $15K per violation. Also learned that the dealer will recieve a $50 admin fee for each transaction. So that means if you are due $4500 from Uncle Obama you will get $4550.

    We called the DOT and they are as clueless on it as we are. They still don't have anything iron clad yet. The major scrap yard in the area has also been trying to get info and they have nothing for them either.
  • dtownfbdtownfb Posts: 2,918
    To be fair Joel, it was just signed last week and will not go into affect for a few more weeks so that things like this can be resolved.

    I think it's good that you all are asking these questions (and answering them) in a public forum like this so we all learn.
  • kdhspyderkdhspyder Posts: 7,160
    As with all dealers we are setting up the procedures and increaing our understanding of how the program might work. Yes it appears that the dealer gets an additional fee for the administrative work but the towing cost ( usually nominal ) will be the expense of the dealer or the scrapper.

    A buyer could strip all the good parts from the trade before bringing it in....and he should if he has the interest and wherewithall to do so ... as long as the vehicle is drivable. Or, the dealer could strip out everything except the engine which must be crushed ( but most dealers don't want that junk hanging around ). Or, the junkyard/scrapper could strip off the good parts ( most likely scenario ) and keep them for future usage.

    A $1500 'junker' probably has about $500 to $1000 worth of useful parts excluding the engine. This is a bit of windfall for the junkyards. They're getting these vehicles and parts essentially free of charge except for the cost to go get them from the local dealers. Then after they crush the vehicles they sell the scrap steel and iron at the going market rate to overseas buyers and to the new steel mini-mills which use scrap metal as the primary feedstock for the furnaces.
  • kernickkernick Posts: 4,072
    I can see the dealer being held responsible for making sure the vehicle gets moved and signed over to a junkyard, but how is the dealer sure or responsible that the clunker will get crushed, or get crushed in a timely manner?

    How does the dealer know that the junkyard doesn't resell the drivetrain to be rebuilt? Or what if the junkyard simply has a backlog, or wants to remove more parts, and doesn't crush the vehicle for 4 months? Is the dealer responsible for that? Does the dealer get the voucher, or get fined if any of these things happen at the junkyard?

    If I were a dealer, particularly not entry-level vehicles I might avoid this clunker-program, and not signup for it.
  • dtownfbdtownfb Posts: 2,918
    "If I were a dealer, particularly not entry-level vehicles I might avoid this clunker-program, and not signup for it."

    It would be foolish for a dealer to not participate in this program. No upfront fees to join and no telling how many sales you may be able to get from it. In today's market, you can't afford to exclude yourself from this program.

    it will be interesting to see the advertising from the dealer's once this bill goes into affect.
  • Call NHTSA...that's who I called and the person that answered the hotline seemed to know what he was talking about. Toll-Free: 1-888-327-4236
  • kernickkernick Posts: 4,072
    It would be foolish for a dealer to not participate in this program.

    Let me better define "not entry-level vehicles" for you and give some reasoning. There is quite a list of Makes that do not sell entry-level vehicles: the obvious are Mercedes, Jaguar, Cadillac, Lincoln, Lexus, BMW, Infiniti, Acura, Buick, Land Rover, and maybe a few others.

    Now while there will always be a few millionaires driving around in the '88 Ford Bronco, there really are very, very few, who all of a sudden are going to say "gee, I'm going to trade in the ol' Bronc for an Infiniti G37 coupe". The typical person with a clunker a) can not afford the payments on a new $25K+ non-entry-level vehicle, and b) probably couldn't get financing.

    Secondly there are not many people driving clunkers who are going to come in the dealership looking like they work a decent job. All that marketing money and the $ spent to make the dealerships look really nice and shiny - all to create an atmosphere - can be brought down by having the '88 Bronc in the customers' spot, and the customer wearing the Walmart happy-face shirt.

    Appearances and atmosphere are very important to many businesses. Show up looking like a bum, and it doesn't matter if you can squeak by with the $; they don't want you in.
  • joel0622joel0622 Posts: 3,302
    Call NHTSA...that's who I called and the person that answered the hotline seemed to know what he was talking about. Toll-Free: 1-888-327-4236

    We called 3 different times asking the same question and got 3 different answers.

    The best advice for now is for everyone to sit tight, ignore everything you have heard, and wait for the final word on it to come out
  • kdhspyderkdhspyder Posts: 7,160
    Sorry this presumes that certain people's money is not green enough. Nothing is farther from the truth....for a lot of reasons.

    The typical person with a clunker a) can not afford the payments on a new $25K+ non-entry-level vehicle, and b) probably couldn't get financing

    From daily experience this is simply not true....and why does the new vehicle have to be $25K+. I'll go out on a limb and guess that most of these clunkers traded in by the buyers on the edge will result in the new owner driving off in a $17000 vehicle that cost less than $13000....or lower.
  • volvomaxvolvomax Posts: 5,274
    From my experience,there is usually a financial reason why people drive clunkers or older cars. Even with the gov't cheese I think the vast majority of them would be unable or unwilling to take on a new car loan.

    Remember, in order for this program to make sense you have to be driving a broken down,nasty, POS. Most older used cars are worth more than $3500.
    The people driving them aren't coming in the door as it is.
  • kernickkernick Posts: 4,072
    I'll go out on a limb and guess that most of these clunkers traded in by the buyers on the edge will result in the new owner driving off in a $17000 vehicle that cost less than $13000....or lower.

    That's what I was saying. Higher end brands will be lucky to see 1 or 2 customers over many months who are trading in a clunker. So why would one of these higher end brands want to have to deal with getting at least their administration and finance people up-to-speed on the many pages of what this bill entails.

    If I run a BMW dealership, I say let the 1 or 2 customers I might get, go down the street and bug the Lexus dealer, and park some junk out front on a Sat. afternoon. I wouldn't want the oil-stains in my driveway.
  • kernickkernick Posts: 4,072
    Exactly. The vast majority of people driving clunkers are either living check-to-check and have poor credit, make minimum or near minimum wage, are very cheap, or don't really care what they drive. I don't want them in my dealership. Let them go down the street to the Kia dealer. I wouldn't want my salespeople wasting time and then finding out the people have $100 deposit, and a credit score of 400.
  • ldislerldisler Posts: 83
    I think your under estimating a lot of people who drive older vehicles. I'm turning
    in my 99 Mercury Villager thats worth $1000-2000 in trade. I bought this car new
    and it's in good shape (not a clunker). I have great credit, but it doesn't matter
    because I'll be paying CASH. I don't think I'm alone.
  • gagricegagrice Pahrump, NevadaPosts: 31,450
    I would also pay cash. I think we are a VERY SMALL minority in this country in debt to the eyeballs. Are you getting a car that gets 28 MPG combined so that you get the $4500?
  • joegiantjoegiant Posts: 90
    Geez I hope you're right, kernick. Will definitely make my shopping experience that much better knowing that all these fellow clunker owners only make minimum wage, live check-to-check and have poor credit and therefore won't "qualify" for a loan thus NOT driving up the demand for vehicles. ;)
  • ldislerldisler Posts: 83
    I'm looking to get a Mazda5 which gets 23mpg. Since I'm going from minivan to minivan I should be eligeble for the $4500.
  • dtownfbdtownfb Posts: 2,918
    kernick: what brand cars do you sell? I'll have to show up in my tuxedo so you don't get the wrong impression of me. it's pretty scary the generalizations you make.

    I'm starting to feel pretty inferior for driving my 2000 Intrigue with 178k miles (few dents and a rust spot by the fuel tank). all this time i thought I was saving money by not having a car payment. In reality, I have poor credit, make minimum wage, and can't afford a $25k car loan. I better find the guy who's life I'm living.

    Kidding aside, I do tend to agree but not from the point of view that people that drive "clunkers" somehow can't afford a new car. But from the POV that people that can afford a car payment and drive a clunker do so because they are cheap and don't think buying a new car is a good use of their money (myself included). Even if they could get $3500-$4500 for their car, they would still find the remaining amount too expensive. But then you will have those who will use this opportunity to buy something new and drive it into the ground. You just don't know! Which is why any dealer that sells a car that is less than $45k should register. Remember there 300 million people in this country and about 150 million are eligible drivers (guessing).

    The banks and lending companies will take care of finding those that qualify. If the dealer sees a pattern of people not getting qualifiedy a person, why not discuss financing upfront like real estate agents do? I can see that being a royal pain dealing with people who you can't get financed. Lots of time wasted.

    BTW, I just replaced my Intrigue with a 2006 Camry. I buy used cars for myself, new for my family. I regularly drive my cars over 120k miles.
  • banditboybanditboy Posts: 54
    My 2000 ford tauras has front suspension shot has a big dent and 120k miles .Its probabily worth 500$ but the new combined mileage is 20 mpg so i get nothing.

    I take the train to work and also own a 2007 camry which my wife/family car.i can afford only 1 payment so i drive the clunker.if this was avialable i would have picked a jetta or something in a lease .

    I do not like the generalization . last year i put 1000 miles on my clunker and 8000 miles on my motorcycle living in NE. I take the train to work and the camry is the family vehicle[avg 12-13k a year as wife is a stay at home mom].
  • andre1969andre1969 Posts: 23,656
    Let me better define "not entry-level vehicles" for you and give some reasoning. There is quite a list of Makes that do not sell entry-level vehicles: the obvious are Mercedes, Jaguar, Cadillac, Lincoln, Lexus, BMW, Infiniti, Acura, Buick, Land Rover, and maybe a few others.

    Our local Cadillac dealer sells an entry level vehicle, for the time being at least. It's called a "G3". :P

    Also, a lot of people who buy BMW 1 and 3 series, Mercedes C-series, etc, are people who are really stretching to afford them. They only care about the perceived status that comes from the name. Now granted, chances are that these people are already driving around in a used BMW or Benz that they really can't afford, and want to get into another one they really can't afford, so I'd guess that not too many of them are driving vehicles that would qualify under this clunker bill.
  • lemkolemko Philadelphia, PAPosts: 15,306
    The guys who truly can afford a BMW or Mercedes typically buy at least a 5-Series or E-Class. Too many poseurs in the lesser models.
  • volvomaxvolvomax Posts: 5,274
    I think your under estimating a lot of people who drive older vehicles

    I don't think we are. We do this for a living. We see far more people in this business than you do. As an individual, you may have a different reason for driving an older, cheaper car. But, please do not mistake your individual experience for the market at large. You ARE pretty much alone.
  • volvomaxvolvomax Posts: 5,274
    it's pretty scary the generalizations you make

    I think they are accurate. I've been doing this for 20 yrs.

    I do tend to agree but not from the point of view that people that drive "clunkers" somehow can't afford a new car. But from the POV that people that can afford a car payment and drive a clunker do so because they are cheap and don't think buying a new car is a good use of their money (myself included).

    There are SOME who do think that way yes. Mostly old Volvo drivers. :P
    However, it is the nature here in America to want as new a car as you can afford. Especially if it is the family car. Generally speaking(and that is all we can do here) there are financial reasons why people drive old cars.

    If the dealer sees a pattern of people not getting qualifiedy a person, why not discuss financing upfront like real estate agents do? I can see that being a royal pain dealing with people who you can't get financed. Lots of time wasted.

    Banks are getting harder and harder to deal with. Just the other day we had a customer who was trading in a car financed w/ Bank of America. Paid them perfectly. Was 60 days late on a dept store credit car with a high balance of $150!
    Dropped his score to 660. Best rate we could get him was in the 11's!. Needless to say, B of A turned him down flat. This was a person with good income and a pretty decent credit history. This guy, like a lot of people thought he had good credit. Imagine how tough it is right now for someone without good credit.

    BTW, I just replaced my Intrigue with a 2006 Camry. I buy used cars for myself, new for my family. I regularly drive my cars over 120k miles.

    Yep, most old car driving people buy used. This exercise in gov't cheese is useless for them.
  • dtownfbdtownfb Posts: 2,918
    I think they are accurate. I've been doing this for 20 yrs

    Which is why I like reading your advice as well as the other regular salesmen and finance managers that post here. I still think it's an over generalization but we still agree on the overall premise. We (kernick included) are just looking at "financial reasons" a bit differently. No biggie.

    Unfortunately, our obsession for shiny, new, good smelling things has controlled our society for the past several years. With the way the banks are acting (your example hits the nail on the head), we, the people, need to get our personal credit situations taken care of before buying big ticket items that require credit. I have a bad feeling that this is the new normal for banking/lending for the foreseeable future. Or until the housing market turns around. The big banks still have a lot of money invested in bad mortgages and aren't willing to take risks.

    Unfortunately, you all are the collateral damages of this housing crisis fiasco.
  • greanpea68greanpea68 Posts: 1,996
    Found out two things yesterday. One is that any dealer caught not executing the program properly will be fined $15K per violation. Also learned that the dealer will recieve a $50 admin fee for each transaction. So that means if you are due $4500 from Uncle Obama you will get $4550.


    Thanks Joel.... good info... I didn't have that yet. It seems to be all we are talking about here atthe store these days is this program.
  • greanpea68greanpea68 Posts: 1,996
    The best advice for now is for everyone to sit tight, ignore everything you have heard, and wait for the final word on it to come out


    EXACTLLLLYYYYYY!!!!!!!!!!!

    Everyone is acting like a expert, it will be interesting to see how this all unfolds.

    GP
  • greanpea68greanpea68 Posts: 1,996
    From my experience,there is usually a financial reason why people drive clunkers or older cars. Even with the gov't cheese I think the vast majority of them would be unable or unwilling to take on a new car loan.

    Remember, in order for this program to make sense you have to be driving a broken down,nasty, POS. Most older used cars are worth more than $3500.
    The people driving them aren't coming in the door as it is.


    I was just starting tothink about the same thing Volvo.... there is a reason these people drive these vehicles.... mainly they couldn't get approved for a new vehicle loan and were stuck with these vehicles... although the money down may help a little I am sure banks will be very wary of this also..... once again very interesting ;) stuff will be happening

    GP
  • greanpea68greanpea68 Posts: 1,996
    live check-to-check and have poor credit and therefore won't "qualify" for a loan thus NOT driving up the demand for vehicles

    Nope things should be business as usual :surprise: :P

    GP
  • greanpea68greanpea68 Posts: 1,996
    If the dealer sees a pattern of people not getting qualifiedy a person, why not discuss financing upfront like real estate agents do?

    I wish I could do that with everyone but that is just not the way to sell vehicles. You have to go through the sales process no matter what. If you don't and you start talking about numbers up front you are selling numbers and not being a sales person! You can't sell value by talking about numbers, which means you probably won't make profit and remember that is why dealerships exist :surprise:

    I know it is a dirty word "profit" but everyone else makes it. Why not dealers?

    Ya know what I love...... I love it when consumers say "oh, I want you to make a profit!" ....."I am just going to shop every dealer in town so I can get the best price" ;)

    That is like saying "Can I get a Big mac, Fries, and diet coke"

    GP
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