Cash for Clunkers

There is a huge flaw. Like the stimulus, house mortgage bailouts and other handouts all I do is pay and never receive. None of it has been fair so far and I don't expect it to change. I'll be paying for many of my fellow citizens to have health care soon too.

Part of this is about mpg's and energy independance. Part of it is about clean air and part of it is about helping the automakers.

If they are going to offer the program I wish you could get the voucher, but as a taxpayer, I really don't want to see my money going for someone trading a Honda for a Japanese Toyota or one economy car for another, but better one.

I will have 2 Japanese vehicles when my Prius comes but I don't expect taxpayer money to support that choice.

There are too many handouts going on; period. This is a stupid law targeting a small segment of the population.

I have found that there are some frugal people here on PC that have the opportunity to trade in some really old cars. In most cases it appears they could afford to do this without the voucher. For those really needing the voucher to be able to make this purchase then I'm guessing they still won't be able to afford it. Thus the law will never approach accomplishing what it set out to do. Many of the people so far here on PC talk abosut simply trading in the old truck or spare SUV that they drive once in a while. Chances are they will pick up another one if they trade because the purposes they have them for will never be fulfilled by a new Prius. I still don't believe that the people (for the most part) that are driving aroud a 20 year old SUV as a daily driver will make up the majority of the people taking advantage of this.

The administration will tout this as a victory when we see how many were given away. I just wish there were statistic they keep and share that shows data on income, other vehicles (and what type) are in the household. We'll never see really how wasteful this turns out to be.

 

I feel like a heel but I'm definitely going to try to use this program. We have a 2000 Nissan Xterra that is an excellent upgrade choice. It's my wife's daily driver while I drive the Highlander 80 miles a day to and from work. The reality is, I would have traded it in eventually on a Prius but the eventually in this statement would be sometime in the next few years (on the order of 1-3 years). With the "Cash for Clunkers" program, I am looking to make the purchase now.

With my case as a guide, I can see the benefit of this program in the short term. It will provide a shot in the arm to a troubled economic segment. My case doesn't help Detroit but what can I say... I just want my Prius. I've had my eye on one for years and now seems like the perfect time to make a purchase. I see the dollar on the slide (increasing the cost of foreign cars), interest rates on the climb (further decreasing my purchasing power), gas prices on the rise (increasing the operating cost of the old car), tax credits for car purchases, and a voucher to increase the value of the older car. I would have to be a complete moron to not jump at a new car right now.

I can only hope that the program proves to be enough to help avoid more catastrophic economic problems. I'm probably not the only person seeing the writing about future car purchases. I expect a lot of people to be front-loading their purchases now. I just hope we can avoide the obvious trade off against mid-near term car sales.

 

I just bought a used 2008 Prius (which my wife and I love). I have a 92 Plymouth voyager that gets about 13 mpg and would like to trade for a small car that gets at least double the mpg to drive to work.

 

Excellent! That is the intent of the (still stupid IMHO) law.

 

Don't feel that way. I take advantage of every tax loop hole I can find and still pay more taxes than my daughter the school teacher makes. It's the American way (and expectation). Laws are to be followed Don't feel guilty.

Even though I don't agree with it, I would use it if I could. That's the only way to highlight stupid laws. I also don't like wasting money so if I can reduce my taxes and then give it to my kids, a charity, or simply pay the groceries then I would much rather do that.

 

Wouldn't a 2000 Xterra be worth more than $4500? For the most part, that is a better vehicle than many on the road. Being pretty modern, I would assume it at least has better technology than many. Most of the "clunkers" that will be taken off the road will be vehicles with little resale value

 

I'm planning to use it! I have a 2001 Ford Explorer Sport Trac truck with 120k miles and is rated at 15mpg (but gets about 12). It needs a manifold gasket, upper and lower ball joints, 4x4 repair, new belts, suspension and an all around good tune up. I figure I need to spend about 5k to get it in good condition. In that good condition, the trade in value books at about $3k.

I was already planning to trade it in for a Prius a few weeks ago before I even heard of the Clunkers bill. But now I'm waiting until it is finalized and they start rolling out the program to the dealers and then I'm buying a 2010 Prius. I'll take the free money. I pay way too much in taxes as it is, I may as well take advantage of this and get some of it back and then go buy a japanese car so that I can help" our failed auto industry. This is a very well thought out program. I wonder if they actually read this one? Their stupidity, my gain. I'm so pumped about getting a new Prius though that the wait is killing me.

Hope and Change.

 

Cash for Clunkers will be the death of fixer upper cars.

 

Only for those rated 18 mpg or less. Those of us who already valued fuel efficiency 10-25 years ago can't turn in our old ones for this deal, so we still get to sell them on the fixer-upper market.

 

Yeah, there's no way I'm trading in my RX-7 for a discount on a new car.

 

From a dealer point of view, it is going to hurt..

1) A dealer has to sign up for the program in order to participate.
2) I must prove that the vehicle was junked.
3) I will no longer have any cars under $5k to sell to college kids. Or the person that just lost their job and needs a cheap set of wheels to get another one.
4) The sheer volume of people that don't understand the program is astonishing. I had a younger gentleman call me and ask if his 2006 F-150 qualified. I told him it does, but that he doesn't get the trade-in value PLUS $4,500. He gets one or the other. "You are F&^*&ng lying to me. I get both. You are just trying to cheat me." then hung up on me. Sigh.
5) It will kill the small dealer's cash flow. The dealer has to front the money. In the meantime, he has to find a junkyard authorized under the program. Have them come get it and sign off saying that they will junk it (presumably, nothing official yet). Once I get the form, I send it in to the government to get re-imbursed. How long that will take is anyone's guess. If it is 60 days, and you do 10 of them, that is an average of $40,000 out of the dealer's pocket. Big dealers won't be affected, but the small 20-30 car a month stores will be.

 

What happens if you don't sign up? Is it worth losing the business for the few people that want to buy new with C4C to not sign up?

 

Every dealer will sign up for it. No doubt about that. But, I'm just saying that some small dealers might have an issue. Especially ones that are barely making it now. Part of the coventant of most dealer agreements is that you have to keep $x worth of working, liquid cash in the bank at all times.

 

But how many people can actually afford a BRAND new car right now? As someone who drives a car that qualifies, I know I sure can't.

 

So Jabber, does this mean your dealership does not plan to participate? I would imagine the nearest dealer who does participate would appreciate it if you didn't. More sales for them from people with qualified "clunkers". There are four Toyota dealerships in my area. If any one of them does not participate, they wont be given a chance to sell me a brand new Prius in July. Is the hassle of the program more than the value of selling a new car and all the residual income that it will produce (dealer options, service, oil changes, financing, extended warranty, etc)

I have read the bill. It says the payment to the dealer will be paid within 10 days. (although this is the Govt we're talking about...I can completely understand your skepticism on this!! It also says the dealer may keep $50 to cover admin costs. However the $50 comes out of the estimated salvage value that the dealer must disclose to the customer. What was unclear in the bill is whether the dealer must simply disclose the estimated value of the salvage or whether they are required to also pay that to the customer in addition to the $3500-4500.

And I would be fully willing to let my dealer give me the $4500 out of their pocket to buy my trade in instead of using this program. My truck is only worth about 3k trade though, but if they want it to sell as a used vehicle they still can.

 

I assume you posted this response as I posted mine.

From my understanding, you get either $3,500 or $4,500, not one of those PLUS the value of your salvage. Although I could be wrong. Nothing is official yet from the NHTSA. My guess is that the government will pay the dealer $4,500 minus any value we get from the salvage company, i.e. car worth $750 to salvage company, dealer gets a check for $3,700 (taking into account the admin fee). Bottom line is nobody really knows how this will work yet.

And I don't believe dealers will give you $4,500 for a vehicle that is worth $3,000 just so they can sell it. By the time a dealer is done doing his inspections and reconditioning, he will own the car for over $5,000. And it is still only worth $3,000. Now he needs to add for profit. Easier to just call the junkyard and call it a day.

Just to be clear, my dealer has already asked for any and all paperwork necessary to participate in the program.

 

That is one of the things that we have discussed behind closed doors. How much of an impact will it really have? If you look at all the people that have qualifying vehicles, how many are currently in a position to purchase a new car. Our best guess (using darts and a blindfold) is that only the people that really loved their old cars and wanted to drive them into the ground will do this. The type of people that maximizes their auto dollars rather than people that like to trade every few years. Ok, the really frugal people. I said it

 

That's me! The cheap (frugal) part anyway. I tend to own my cars for a long time so a new Prius makes sense. I don't even like our old Explorer, but we had a boat for many years and needed the truck to tow it. I'll be dancing on tables (no photos!) when that thing is gone.

 

Why wouldn't people be able to? Not a whole lot has changed in the past year. Unemployment has gone up ~ 5%, the stock market and real estate markets have tanked. If you still have a job, your monthly cash flow should be about what it was a year ago. What has changed is that people are scared today and aren't spending money. This bill is intended to get those people to buy a car.

The bill only is funded for ~250,000 cars. Do you really think that 250,000 people don't have money for a car?

 

This should not cut the supply of cars rated 19mpg and higher, such as my very old Accord rated 24 mpg. Had there been any realistic chance of getting it qualified under this CFC bill, I would have delayed my Prius purchase.