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Cash for Clunkers - Does it Work for You?

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Comments

  • nvbankernvbanker Posts: 7,285
    You've obviously never had a VW before.......get the Honda.
  • xhe518xhe518 Posts: 107
    Seems to me, without knowing a lot of details, it will end up like one of those "guaranteed minimum" push-pull-tow trade-in deals as described above (post 254) where you end up paying full sticker and it isn't really all that great of a deal....maybe for some people who have an old junker that really is only worth $500 bucks it would be worth looking into....

    My old car, a 2000 Toyota Sienna, doesn't qualify anyway....
  • cyclone83cyclone83 Posts: 60
    Cars.gov says this:

    The program requires the scrapping of your eligible trade-in vehicle, and that the dealer disclose to you an estimate of the scrap value of your trade-in. The scrap value, however minimal, will be in addition to the rebate, and not in place of the rebate.

    So if you participate in this program, do you get something for the scrap value?
  • volvomaxvolvomax Posts: 5,238
    If that is true, count us out. What a monumental pain in the [non-permissible content removed].
  • xhe518xhe518 Posts: 107
    Yep, the more I read about this, the less enticing it is. I originally thought the $3500 or $4500 was in addtion to making your best deal, not replacing the trade-in value of the old car. That isn't much of a great deal at all, IMO. Wouldn't be enough to get me to trade my Sienna, even if it did qualify.

    Also, I think the person trading in an old car that's only worth $500 probably isn't shopping for a brand new car anyway.
  • maryh3maryh3 Posts: 263
    I think a lot of us are ones who have an extra clunker. We have it because typically it is very high mileage. When a car gets mileages over 150,000 the dealers don't want to give you anything for the trade in -- so you just keep it. It doesn't cost much to insure - you usually drop collision on it. It is great to have for those snowy days, to haul stuff, in case your other vehicle isn't working, for your kids to beat, to keep the mileage down on your new car so it will be under warranty longer etc. You keep telling yourself, "when the next major repair comes I'm getting rid of it", but nothing major happens instead it nickle and dimes you.

    When a program like this comes around it is the chance to reshuffle the autos. Your good car becomes your future beater, and the current beater brings you $4500 towards a new good car with 3 years warranty, upgraded safety features, and a car more suited to your current needs.
  • rprossilrprossil Posts: 62
    I agree - they put too many conditions on the program for it to be effective. You're right - the person with the $500 car probably isnt shopping new, and the having to have the car registered and insured for a year will eliminate some potential sales. Without that rule, the possiblities would open up greatly - for example:
    The person with the $500 car could sell it to someone, get their cash, and use it to upgrade or for other needs ( they are now happy). The person who wants to buy new buys the $500 car and trades it under the program (they get some extra $$ off their new car, the dealer sells a new car, and the guzzler is off the road - buyer is happy, dealer and automaker are happy, environmental people are happy, government is happy). This way car sales go up and more people are happy and satisfied. Right now, the owners of the $500 cars likely still own them.
    Just my $.02. The political process sure can get in the way of common sense.
  • greanpea68greanpea68 Posts: 1,996
    Just my $.02. The political process sure can get in the way of common sense.


    RPR,

    In theory you are correct.... but let me explain why it will not work that way....

    These govt rebates/ vouchures are coming from tax money. The govt (and I agree with this) only wants to reward people who have been paying taxes on said property (the clunker).... Everyone pays tax on vehicles... so why would/should the govt hand out money to people who haven't been paying taxes on there vehicle?

    Does that make sense to you?
  • stephen987stephen987 Posts: 1,994
    I agree with your position--only registered, in-use vehicles should be eligible--but not your reasoning.

    The federal government does not collect vehicle taxes. State and local governments do. State vehicle taxes vary widely--some states use an ad valorem calculation (basically a property tax based on the value of the vehicle) and others use a flat rate (essentially an annual "tag fee.")
  • oldfarmer50oldfarmer50 Posts: 17,255
    I have a question which has been rattling around in my head ever since the CFC program was announced. Will the program help the poor?

    I asked myself who is most likely to have been driving a clunker for a least a year? Of course the answer is usually someone who can't afford anything better. Next I asked myself what is the likely credit status of someone who can't afford a better car? Probably not tier 1.

    So how are the dealers preparing for what may be a flood of credit challenged people bringing their smoking clunkers into the store? Will there be financing for them in this tough market. Will they be able to use rebates and clunker money in place of a substantial down payment?

    I know people who are driving $500 cars out of necessity who could swing a couple hundred a month. On something cheap like a base Hyundai Accent with a $1500 rebate and $4500 for their big old gas guzzler they would only have to finance about $7K. Usually their credit is crap.

    Would such people have a shot?

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

  • indecisionindecision Posts: 22
    Our second family car is a clunker. Our first car is coming off lease so we need to buy or lease 2 cars right now. We are shopping new for at least one of the cars and the 3500 or 4500 will make a huge difference for us right now.
  • stephen987stephen987 Posts: 1,994
    They'd have a shot, yes. But it probably wouldn't be a good choice, because if they have lousy credit they'll still wind up paying through the nose in interest.

    When I was selling cars back in the mid-'90s we could usually get almost ANY customer a loan if the loan-to-value ratio was sweet enough. I'd guess we're talking about 50% LTV here on an Accent.
  • We are professional, frugal parents of 2 young, (and messy) children. Having new cars is not a priority...having a nice home and building equity is. We haven't had a car payment in 8 years. However, if we can trade in our Town and Country and get $4500 when it's worth about $1500, that's a deal we can't refuse. We're buying a Mazda5 to replace our gas guzzling minivan. The CARS program works for us and it's working for a few of our friends. I think we'll see many just like us who will be able to take advantage of this offer. I just wish the rules were not so strict so more of our guzzling minivan friends could cash in. Maybe in the next rollout...
  • ldislerldisler Posts: 83
    Just put a deposit on a new car, but the dealer is treating the CFC money as
    a rebate ( therefore I would have pay sales tax on it), if it's considered trade
    value then it's not taxable. I live in NJ. Any ideas ????
  • stephen987stephen987 Posts: 1,994
    Show the dealer the printout of the FAQs from the www.cars.gov official site. See what he says. Then mention the $15k fine for fraud.

    I bet you'll get results.
  • joel0622joel0622 Posts: 3,299
    He is doing that because no one knows for sure how to treat it yet. The TN Automoblie Commision has been trying to get an answer to that very question. Hope they tell us by Friday. LOL I think the dealer is doing a little CYA. It would be easier to tell you Friday you do get the tax credit and the OTD goes down then to have to tell you sorry the price is going up.
  • joel0622joel0622 Posts: 3,299
    For those of you who were positive the manufactures would cut there programs during the CFC event think again. it usually only takes one to do something and the rest follow,

    Chrysler Group is offering consumers $4,500 on most of its 2009 models, doubling the cash-for-guzzlers incentive offered by the federal government.

    “Double Ca$h for Your Old Car,” offers up to $4,500 cash or 0 percent financing for 72 months on qualifying new vehicles, even if the consumer’s trade-in doesn’t qualify for the federal incentive.

    The program starts tomorrow and runs through August, Chrysler announced this morning.

    “We didn’t want consumers without qualifying vehicles to feel left out, so we are offering up to $4,500 to everyone,” said Steven Beahm, Chrysler’s vice president for sales operations.

    Chrysler emerged from six weeks of Chapter 11 reorganization on June 10, and now is controlled by Italian automaker Fiat S.p.A. Through the first half of the year, Chrysler’s U.S. sales plummeted 45.7 percent to 471,197 vehicles.

    The cash-for-guzzlers legislation, designed to help lift U.S. light-vehicle sales from 27-year lows, provides vouchers of $3,500 to $4,500 to consumers who trade in their rides for new vehicles that are more fuel-efficient. Congress allocated $1 billion to fund the program, which expires Nov. 1.

    New cars eligible for the federal incentive must have combined highway and city fuel economy of at least 22 mpg, and small light trucks must have combined fuel economy of at least 18 mpg. New vehicles must have a suggested retail price of $45,000 or less.

    Trade-ins eligible for “cash for guzzlers” must be drivable, less than 25 years old and have combined fuel economy of 18 mpg or less. They must have been continuously insured and registered to their owners for at least one year.

    Vehicles not included in Chrysler’s offer are the Jeep Wrangler, Dodge Challenger and Sprinter and all SRT products.

    Chrysler had told dealers that its current incentives would last through July. But some dealers had said they believed customers were holding out in hopes of getting more money for their old vehicles under the cash for guzzlers program.

    Said Kathy Graham, Chrysler spokeswoman: “We were hearing from a lot of people who thought they could buy with cash-for-clunkers. But then realized for one reason or another their car didn’t qualify. We looked at putting an incentive package together that appealed to everybody.”

    The National Highway Traffic Safety Administration is drawing up rules for the cash-for-guzzlers program and is scheduled to release them by the end of the week.
  • rprossilrprossil Posts: 62
    I understand your point of view, however, I believe one needs to look at the bigger picture here - one of the goals of this program is to SELL NEW CARS to help get the economy moving. Yes, you are correct that the "clunker" owner has been paying some form of tax on the vehicle, but so is the person buying the new car, and even more so. I view this program as an incentive to get the economy moving, not just to get people in older cars into newer ones. As one of the other posters mentioned, there are likely numerous reasons that people have clunkers, and if they wished to sell it to upgrade their vehicle to a newer one (but perhaps not brand new), doesn't that help the big picture as well? I'm just saying there are lots of ways to look at this, but I feel the underlying goal is to help stimulate the economy via increased car sales.
  • jeffyscottjeffyscott Posts: 3,855
    Did you notice that Chrysler said "we are offering up to $4,500 to everyone"... that is a meaningless statement.
  • maryh3maryh3 Posts: 263
    Just came from the dealer. Basically Chrysler is giving a $4500 or $3500 rebate on almost all of their 09's. This would be in addition to C4C money. A few are excepted, like the Jeep Wrangler.
  • greanpea68greanpea68 Posts: 1,996
    Friday you do get the tax credit and the OTD goes down then to have to tell you sorry the price is going up.


    I agree with Joel 100%... We recieved our letter yesterday stating that we are registered with the program.... but, the only thing we know is that we are registered. We don't know what to do with a tax credit.... last I heard is you would not recieve a tax credit.... And CAR.COM.GOV.... what ever it is can be changed tonight.... heck this bill has already been changed a couple times....

    I really enjoy reading the posts about the consumers who want money for the scrap rate..... there car is worth $500 .... they get lets say $3500... and they just want more..... Mean while they would be bull sh$t if anyone asked them to lower there prices or annualy salary.... No wonder this country has some economic troubles :surprise:

    GP
  • joel0622joel0622 Posts: 3,299
    Did you notice that Chrysler said "we are offering up to $4,500 to everyone"... that is a meaningless statement. .

    They are just following in the goverments lead. Everything they have said has been prettty meaningless up to this point
  • seldenselden Posts: 22
    I'm one of those people who keeps a car until it is worn out, not because I can't afford to buy a new car, but because I don't want to. By sheer, dumb luck, I've got a 1996 Nissan Quest that started to fall apart this spring. I plan to replace it with a Honda Fit, paying cash. I find it hard to believe that there are not thousands of people like me. The CARS bill isn't intended to help poor people, it's intended to get old cars off the road and to jump start new car sales. One can argue that CARS is not aggressive enough, but this country is already looking at humungous deficits, and CARS in its current form is the result of political compromises necessary to get it passed into law.

    That said, it wouldn't surprise me that, if the initial $1 billion looks likely to run out before November, there will be a supplemental appropriation to extend the program. If, as some are arguing, few people are in a position to take advantage of CARS, then the money won't run out, and there will be no need for supplemental funding. On the other hand, if CARS is a runaway success, new car sales will have gotten a shot in the arm, and further funding may well be justified.
  • steverstever Posts: 52,457
    That's me, except my Quest is a '99 and it's still running ok, at least for around town.

    btw, a dealer last weekend offered me $100 "scrap value" for the van on top of the voucher and I didn't even ask. Of course, their opening volley was $4,000 more than TMV so I never got around to the dickering part. :shades:

    Anyone here with a big honking SUV or pickup having trouble figuring out what category their rig falls into?

    Steve, visiting host
  • stephen987stephen987 Posts: 1,994
    Anyone here with a big honking SUV or pickup having trouble figuring out what category their rig falls into?

    Well, I'm not sure if my Ram 1500 pickup is Category 1 or 2. It's a shortbed version, so it might be Cat1 instead of Cat2. But I don't think it matters, since I'm planning to replace it with a compact car.
  • sportfitsportfit Posts: 4
    I've got a different problem on a 85 GMC Suburban, just the clunker that works. Trouble is, I put it on non-operational status with DMV and cancelled the insurance for the first half of the year. According to the rules, I am disqualified from the program because it has to be registered and insured for a year.

    Now why would that matter if the goal is to sell more cars and get the smoggers off the road ?
  • tidestertidester Posts: 10,059
    Mean while they would be bull **** if anyone asked them to lower [their] prices or [annual] salary...

    Reluctantly or willingly, they are subject to the very same market forces as the car companies. When the market doesn't work the way you want then you moan. Otherwise, you smile.

    tidester, host
    SUVs and Smart Shopper
  • gagricegagrice Pahrump, NevadaPosts: 31,450
    Now why would that matter if the goal is to sell more cars and get the smoggers off the road ?

    You took your smogger off the road and saved the tax payers $4500. Just the way it goes sometimes. How about the guy that lets his insurance lapse for a month and is disqualified. I would say to go ahead and register and insure. Chances are if they have another such plan they will change the rules and you could be wasting your money.
  • kdhspyderkdhspyder Posts: 7,160
    There are tens of thousands of people like you. Maybe hundreds of thousands of people like you. In this country there are ~250 million units on the road today. a good 50 million of these units are big V8 trucks and SUVs not to mention the TownCars, minivans, etc that might qualify. To assume that all these owners are the 'driving poor' is not realistic. Many I've seen are in the same position you're in with your Quest; frugal and responsible people that last bought a vehicle in the 90s and now the time is here to renew the daily driver.
  • lemkolemko Philadelphia, PAPosts: 15,306
    That's like saying, "You can make up to a million dollars selling Amway products!" Then again you can make nothing or lose money! :P
  • jeffyscottjeffyscott Posts: 3,855
    Yep, my favorite is when I see something like "save up to 50%, or more". Could be 0%, could be 100%...who knows.
  • 94gs94gs Posts: 59
    I am excited about trading in my '94 Acura to get a new xB this weekend. I am allergic to debt so I only buy cars using cash. If I cannot afford a new one, I buy a used one. And, I drive the car till it dies or is too expensive to repair. ;)

    The Acura is a solid car and works fine, but just too expensive to maintain. Also, the safety features are not up to date.
  • lemkolemko Philadelphia, PAPosts: 15,306
    Which Acura? Those old Legends were pretty solid cars.
  • andre1969andre1969 Posts: 24,376
    Uh-oh...now that i think about it, I have a bad feelingg that I may NOT have already won the Publisher's Clearinghouse Sweepstakes. :P
  • 94gs94gs Posts: 59
    It's a '94 Legend GS, which I can still drive 90+ MPH on NJ turnpike (don't try this when cops are around; there are many cops there.). :blush:
  • BMW540BMW540 Posts: 33
    At first I was told, 4500.00, now 3500.00. After looking at the rules in the boxed sections I thought 3500.00 and then after scrolling down, possibly 4500.00. I have a 96 straight 6 2 wheel drive Grand Cherokee Laredo with 120000 miles on it.Purchasing a 2010 Mazda 3 Sport Hatchback. 16 mpg vs. 25 mpg, what do you think?
    Thanks BMW
  • andre1969andre1969 Posts: 24,376
    If you're getting a car, doesn't it have to get 10 mpg or more better than what you're getting rid of to get the $4500? If that's the case, then you need to find something that gets 26 mpg combined or better. Looks like the Mazda just misses it.
  • seldenselden Posts: 22
    See the table at the end of Federal Register /Vol. 74, No. 126 /Thursday, July 2, 2009 / Proposed Rules.

    "If the vehicle to be traded in is a passenger car or category 1 or 2 truck, and if the difference in combined MPG between the new vehicle and the trade-in vehicle is 4-9 MPG, the incentive is $3500. "
  • seldenselden Posts: 22
    The CARS credit is also "up to $4500." Until proven otherwise, I'm interpreting Chrysler's offer as matching the CARS credit dollar for dollar. Having some experience with two different Chrysler vehicles, I wouldn't buy one at any price, but that's another matter.
  • volvomaxvolvomax Posts: 5,238
    I'm one of those people who keeps a car until it is worn out, not because I can't afford to buy a new car, but because I don't want to. By sheer, dumb luck, I've got a 1996 Nissan Quest that started to fall apart this spring. I plan to replace it with a Honda Fit, paying cash. I find it hard to believe that there are not thousands of people like me. The CARS bill isn't intended to help poor people, it's intended to get old cars off the road and to jump start new car sales

    There are thousands of people like you, but people like you are far from the majority of clunker drivers. Most are people who drive clunkers because that is what they can afford to drive. For them,a new car is out of the question. For the rest, the question is will they take on the expense of a new car simply do to this offer? I have my doubts. People who CHOOSE to keep and drive an older car do so out of a philosophical or financial mindset. One that is usually impervious to incentives. Let's face it,during all the years of 0% APR's and easy credit,they STILL didn't buy a new car. Why would that change now?
  • krynskykrynsky Posts: 8
    Ford started honoring the rebates as of last week in my area (Seattle). They're giving you the credit but I have to go back sometime during the weekend to sign some paperwork once the program goes "live"

    I traded in my old 97 Ford Explorer AWD V8 (that got 12mph city / 17 mph hwy) for a new 2009 Ford Escape.

    Sticker on the car was just over $26,000

    Got the car for dealer price, a little over
    $24,000
    -$4,500 cash for clunkers
    - $2,500 ford rebates

    $17,500 plus tax

    BUT!!!!!! FYI that tax is charged on the purchase price of the vehicle BEFORE rebates are applied... I called two dealerships about this and they both confirmed it. That was kind of crappy as we have 10% sales tax in the state, so that's $700 extra in taxes paid.
  • stephen987stephen987 Posts: 1,994
    The C4C rebate is supposed to be treated as a substitute trade-in value, according to NHTSA. So if your state assesses sales tax on the full price rather than the trade difference, then the dealer acted correctly. In my state, the sales tax is assessed on the trade difference.

    The factory rebate may fall into a different category, though.
  • 94gs94gs Posts: 59
    According to the cars.gov FAQ:

    "Do I have to pay State or local sales tax on the amount of the CARS program credit?

    The question of whether a consumer must pay State or local sales tax on the amount of the CARS program credit would depend on the sales tax law of each State or locality. Consumer should review the law of their respective States or consult a tax advisor to answer this question."


    Does anyone know if NJ tax applies to the CARS credit? :confuse:
  • volvomaxvolvomax Posts: 5,238
    Hmm, dealers have been warned NOT to make any clunker deals until the final process has been unveiled.
  • jakes5jakes5 Posts: 1
    Does my 2001 Chevy Suburban qualify for the Cash for Clunkers program?

    Jakes5
  • kdhspyderkdhspyder Posts: 7,160
    You can look it up here....if you meet all the requirements here. GL
  • Well if we aren't the majority (frugal folks working toward an early retirement on a beach somewhere), then where are those that you're speaking of? They don't seem to be on this forum. If I look out the window of my middle class home on my middle class street, it is full of older model minivans and SUV's. I'm not saying we have a street full of beat up rusty pieces of junk, but certainly gas guzzlers that are paid for and working well for a family with young children (why have a nice car with sand and juice in the car!). I see an opportunity for me to trade in my 2001 T&C for a reliable Mazda 5, getting a nice penny for my T&C which needs a full exhaust system and as typical with these vans, starting to rust. I kind of think we are the majority. The few friends of mine who actually qualify are wisely cashing in on not only the CARS program, but the incentive of the tax being deductible on the purchase.
  • volvomaxvolvomax Posts: 5,238
    No, they aren't on this forum,they are too busy trying to get by.

    Nor do they live in your neighborhood.
    Why is it everyone here just assumes that everyone else is just like them?

    I've been doing this a long time. I've seen every kind of car buyer.
    You and people like you are in the minority of the clunker owning population.
  • tucsondontucsondon Posts: 4
    Like you, I traded in my clunker ('94 Mazda B4000) for a 2009 Ford Escape XLT.... $4500 C4C credit, since I had 17mpg on the old pickup, and 23mpg on the new Escape. Plus another $2500 in dealer incentives.

    However, I don't have the new vehicle yet. The dealer doesn't want to complete the transaction until they have all the details from the federal government. In the meantime, I put down a $1k deposit for them to hold the Escape for me. I'll go back in on Monday to sign all the paperwork and drive away in my new ride. :D
  • My family's company has an old "clunker" van that they said I could trade-in for the 4500; however from what I've read it seems you have to prove the car has been on the road and insured by you for a year. This car has been on the road but insured by our company, does anyone know if they will let me use it toward my new car??
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