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My old car, a 2000 Toyota Sienna, doesn't qualify anyway....
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?
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.
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.
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.
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?
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.")
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, 2013 Ford F-150, 2000 Chrysler Sebring convertible
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.
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 ????
I bet you'll get results.
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.
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
They are just following in the goverments lead. Everything they have said has been prettty meaningless up to this point
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.
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
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.
Now why would that matter if the goal is to sell more cars and get the smoggers off the road ?
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
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.
The Acura is a solid car and works fine, but just too expensive to maintain. Also, the safety features are not up to date.
Thanks BMW
"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. "
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?
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.
The factory rebate may fall into a different category, though.
"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:
Jakes5
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.
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.