Cash for Clunkers

As I said, I ordered my III + Nav today. The dealer was all over the new CARS law and are making sure they know what paperwork they will need and promising me that they will get with me as soon as they know what documentation I will have to have and the procedures I will need to follow to get a voucher.

They assume (as do I) that if I use the voucher I will have to pay sales tax on the entire purchase price (not just the price minus trade in) since the state will not get sales tax on the trade-in car given it can't be sold.

I've jumped on this, but its still a very bad law.

Nice to here dealer perspectives on the law. I too wonder how it will affect used car values at least in the short run.

 

I'd look into this. I took it that the voucher reduces the price and you pay sales tax on the balance. Good point though.

 

I know the bill states the program run between July 1 and November 1 BUT do we have to wait until the U.S. Department of Transportation begins to implement the program? According to Edmunds (Cash for Clunkers Car Buying Stimulus Bill) the customer can only take advantage between early August and October. The clunker bill (http://www.cars.gov/files/CARS-Law.pdf) states July 1 consumer can take advantage. If the program has not been implemented yet how can consumers take advantage of this bill in early July? Once again Edmunds states this government will transfer the money as a down payment. This to me means consumers who purchase in early July before implementation will not be able to come back for a check. (Would the government really hand out $4,500 checks to people without them proving the citizen will put the money on the loan?)
My car is in but I have convinced my dealer to wait until the 2nd of July. Fingers crossed I can get the $4,500. Any thoughts??

 

Not when it has 170k miles on it, needs a good bit of AC work, new cooling system, tires, and may need a transmission in about 30k more miles. KBB/Edmunds shows it at about 2k and that's being generous.

 

I'm interested to see if I am even required to prove that I am a US citizen. I wonder...

I know the program is still being built but I don't see anything about citizenship on the website yet.

 

Why would you want to scrap an RX-7? Even if it was on its last leg, I would still stick it in the garage and put a car cover over it - especially if it was a Gen3 RX-7.

 

There are still lots of people with lots of money in this very wealthy country. Now how many of them have clunkers still on the road is another question.

This is a very small and limited program. I think that it will be oversubscribed for the first 3-month installment.

 

Probably not if you're in California

 

These are my understandings as well. We're going forward on the assumption that buyers will be starting to bring their vehicles in soon after July 1st. So they'll want answers.

Some questions like the value of the scrapped vehicle are not at all clear yet. Another is, how does a dealer 'qualify' a legitimate junk yard/scrapper. Another is, is the dealer 'responsible' to the Feds to ensure that the vehicle is actually scrapped by said legitimate junk yard/scrapper.

But this is just another challenge in the daily routine of doing business. It will sort itself out. New challenges are also new opportunities to make money.

 

For what it's intended to do it's a very smartly written bill. While the details still have to be ironed out, and they will, it will bring buyers out of their homes and generate a boost to the broader automotive segment from clean up people to sales people to truckers to auto workers to steel makers to clerks at all these places while generating more tax revenue for the states.

It's going to be about a 10% boost in sales if fully subscribed. That 10% extra everything across the entire transaction sequence. Since I suspect that it will be over subscribed I see it being extended quarter by quarter for the next year.

But we shall see. BTW, the administration has little or nothing to do with this except as cheerleader. It's essentially a copy of the German program which the vehicle makers here saw work very well initially so the auto industry rounded up their Senators and House members and had the law written.

 

If it's meant to simply get clunkers off the road then it's an environmental bill. Give me a stimulus for purchaseing a green vehicle and parking my gas hog.

If it's meant to get people to buy fuel effecient cars then give me a stimulus and I'll trade my car even though it's only 2 years old. I put a better used vehicle on the market and tricke down effect is someone ends up getting rid of a clunker and in that chain perhaps 2 or 3 car deals are made instead of one.

What is it? If it's both then make the stimulus available to a broader part of the population so everyone who wants to step up can participate (like the tax credits that ran out because Toyota was successful , and now Ford). That was supposed to be an environmental project I thought but it appears simply to be an automotive purchase stimulus bill since they shut if off for those makes that are successful.

I'm just tired of paying more and more in taxes and then small groups (well in some cases largegroups) get handouts.

I don't consume more government products than people who make less than me so why do I pay not only a disproportinate portion of the bill but a larger percentage of my income as well??? It's a shame I'm honest. I know why people seek tax shelters, even to the point of being borderline (or over) illegal.

 

It always has been an auto stimulus bill written by the auto industry itself. The fact that the 'clunker' provision was added was to bring the environmentalists on board; the fact that it uses a rebate mechanism brings the buying public on board.

It's very well conceived and written. I don't get any benefit from this since all my vehicles are well above the standard for 'clunker'. But IMO it's good for the country because it gets people out and about again shopping, spending and generating business which generates more business and begins to break the sense of malaise throughout the country.

 

Just a quick question to clarify. I know one can't get both. The CARS website is a little unclear relative to trade-in value.

Say my vehicle qualifies under CARS.
If my vehicle is valued at 12K as a trade-in and I wanted to purchase a new 2010 Prius for 25K using CARS, would you give the 12K reduction toward the Prius and then the dealership would submit a refund request for the $4,500?

 

Since your trade in would have to be crushed, you would be better doing it as a regular trade-in. The Dealer cannot resell your car. It must go to the junkyard. No exceptions. So they will be unable to give you true market value of your trade.

If you wanted to turn it in based on the CARS, you would only get $4500.00, not $12000.00. It's really designed for older cars that aren't worth that much.

Hope that makes sense.

 

I understand all that! I guess I should have used smaller numbers to ask the question. Yes, it's not logical to scape a 12k vehicle and only get $4,500.

 

HAHAHA! Well, I'm sure someone out there (but I'm sure not on this forum ) might have had that question and hopefully it is a little clearer.

 

I've posted on this earlier, but if the forum would be kind enough to let me further vent.

I simply think this bill while well intentioned is completely unfair. Perhaps their is some prejudice as I am a car consumer near the point of buying a new vehicle and looking at trading in a older vehicle. But once again, here's my problem with the whole thing...

6 years ago, my economic situation was that I just wanted to get a comfortable automobile and not spend a fortune. I was buying used. I ended up with a 93 Honda Accord. Honestly, it's been great. Relatively economic, comfortable, and up until recently, very reliable. But my economic situation has improved, and the automobile is now 16+ model years old, and showing signs of the "nickel and dime" disease. So I'm in the market for a new auto. What really doesn't seem fair, is that my car can be a "clunker" in every sense of the definition because of age, and mechanical deteriation BUT because it get's better than 18 MPG's I don't qualify for the program. Sour Grapes? Maybe but my contention is that the program as it stands is penalizing people with economic limitiations that have TRIED to be economic and maintain a decent older car, while it is rewarding people that are driving beat up wrecks and haven't really given a damn.

6 years ago, I could of said, I don't give a damn about gas mileage or air quality, I'm buying a 1990 Chrysler LeBaron (just using as an example, don't get upset LeBaron fans) and I could of been driving it around getting 17 MPG's and billowing smoke for the past 6 years, and now when "magically" the Government program allows me to trade it in now that it basicly worthless and get 4,500, I suddenly get an economic and ecological concious when I see that I can trade it in now and get MORE than it is worth.

Meanwhile, perhaps my Accord is from a Kelly Blue Book POV very much near the same value as many "Clunkers". At 16 years old it doesn't hold much monetary value BUT it's engine does get better gas mileages so it becomes..."Sorry, your clunker doesn't qualify, you've been getting 6 MPG better these past few years, so good luck trading it in and/or selling it..."

I don't know but that seems supremely unfair to me. I feel like I'm being penalized for not chosing to drive a less economical older car. Because to me, the definition of "clunker" is NOT just gas mileage, or even age. My Honda is very much becoming a "Clunker" and in the on the street value, it is in the "Clunker" range.
The value of the cars themselves will keep people from trading cars in for the "Clunker" value. Obviously if your car is worth more than $4,500 you wouldn't want the deal because you'd lose money. But for those who's cars are worth less, then why are we rewarding only those that have chosen to drive not only older cars, but cars that have gotten bad gas mileage. Making the choice to chose an older but economical car shouldn't end up being something that penalizes you.

The way it is written you could trade in a smoke billowing, piece of garbage that only got 12 MPG and you wouldn't really even have to necessarily trade it in on anything too much better, it just requires it be on a new car lease or buy with an improvement in gas mileage. There's a small bonus for difference in gas efficiency between the vehicles but it's not much.

Sorry, but the governments been throwing tons of money at big banks and corporate interests, some money to help the average citizen would be nice. This bill comes so close, but IMO is still so far.

Last time I'll rant on this...worst case scenario I bid farewell to my Accord which has served me well, knowing I got good value for the life of the car, just hope someone doesn't come in the same time I'm buying with a 1976 NOVA to trade in on a Toyota Tacoma because I'm going to wonder why they rate a big government bonus towards the value of their car, while I'm going to have to just hope I can basicly get anything for my trusty Honda.

 

Does this work in turning in a lease?

 

No, because in a lease you have a residual. So you must either payoff the residual or turn the car back in. The Leasing company ownes the car until it is paid in full. If you use the CARS, it will be crushed and the Leasing company will not be paid since no cash is given, just a credit for a new car.

So in short, no.

 

someone please correct me if I am wrong but this program will end once $1,000,000,000 has been spent (divided by $4,500 per = 222,222 people have taken advantage of this) or November 1, 2009 ....whichever comes first?