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Cash for Clunkers - Does it Work for You?
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.
Do you have questions or comments about how this program will work? Here's the place to ask.
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2009 BMW 335i, 2003 Corvette cnv. (RIP 2001 Jaguar XK8 cnv and 1985 MB 380SE [the best of the lot])
tidester, host
SUVs and Smart Shopper
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.
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
2009 BMW 335i, 2003 Corvette cnv. (RIP 2001 Jaguar XK8 cnv and 1985 MB 380SE [the best of the lot])
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?
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.
Doing the deal now might cost you a grand, 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, 2013 Ford F-150, 2000 Chrysler Sebring convertible
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
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.
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
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
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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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.
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.
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].
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.
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.
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.
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.
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.
EXACTLLLLYYYYYY!!!!!!!!!!!
Everyone is acting like a expert, it will be interesting to see how this all unfolds.
GP
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
GP
Nope things should be business as usual :surprise: :P
GP
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