Cash for Clunkers

[mikeyb]

http://www.blogcdn.com/www.autoblog.com/media/2009/06/88031015-580op.jpg (http://www.google.com/hostednews/ap/article/ALeqM5i_J2CDMBIZhobnHhGIYFCzqvR52wD98NDD900)

The U.S. House approved the "cash for clunkers" legislation earlier today, paving the way for consumers to snag up to $4,500 for trading in their older vehicles for new, more fuel efficient transport.

The bill, which passed 298-119, drew overwhelming support from automakers, local business groups and dealers who claimed the passage could boost sales – further aiding GM and Chrysler's "reinvention" – during the economic downturn.

Although politicians and pundits are sure to weigh-in on the merits of the bill, the specifics appear clear: if your car gets 18 mpg or less and you trade in for a new vehicle the achieves at least 22 mpg, you receive a $3,500 voucher, or $4,500 if the mileage of the new vehicle is 10 mpg higher than your previous heap. SUV, pickup truck and minivan buyers are eligible for a $3,500 voucher if their vehicle gets at least two mpg higher than their trade-in and $4,500 if the vehicle gets five mpg more than their older model. The vehicle has to have been insured for the last year and there is no trade-in value beyond the voucher. The program is also available for leases. Dealers are required to provide proof that the vehicle (1984 MY or later) has been crushed or shredded, and the government estimates that around 25 million vehicles are eligible.

[bgibb68]

i hope that bill sticks around....i'ld love to trade my dakota in for a new truck in about a year.....BAD ASS

[my3needsaname]

Hell yea! Something that finally benefits the consumer directly! 5K on a trade in AND an extra $3,500 bones at minimum from the gov't might be enough to get my dad's old 99 Volvo outta here and him into some new car!
(this may be the only time in my life I say this...) THANKS OBAMA RUN GOVERNMENT!

[Dermen]

Hell yea! Something that finally benefits the consumer directly! 5K on a trade in AND an extra $3,500 bones at minimum from the gov't might be enough to get my dad's old 99 Volvo outta here and him into some new car!
(this may be the only time in my life I say this...) THANKS OBAMA RUN GOVERNMENT!

You get nothing for your trade, only the voucher amount of 3500 or 4500.

[sam1]

I think it's a horrible idea. It's essentially trying to throw the supply v demand economic model out the window and 'manufacture' demand, so to speak, which will never work. It may stimulate car sales to some extent, but what is the cost to the taxpayers going to be? All this 'stimulus' is starting to get obsurd.

[mazdadude]

You will see alot of older cars dying tragic deaths!

The bad thing to me is that the vehicles will be scrapped, crushed, and destroyed, and none of the individual parts will be recycled.(nuts)

[Rogue]

I think it's a horrible idea. It's essentially trying to throw the supply v demand economic model out the window and 'manufacture' demand, so to speak, which will never work. It may stimulate car sales to some extent, but what is the cost to the taxpayers going to be? All this 'stimulus' is starting to get obsurd.agreed. where is the government going to get the funds to pay those vouchers? Taxes...

[my3needsaname]

You get nothing for your trade, only the voucher amount of 3500 or 4500.
WHAT?!?!?!??!?!?!?!?? THAT'S SOME BULLSH*T!!!!! I withdraw my original statement of thanks obama run government.

[sam1]

agreed. where is the government going to get the funds to pay those vouchers? Taxes...

not only that, but when this 'artificial demand' wears off, whats gonna happen? we'll be back in the same place we are now. and we'll continue to dump money into shitty companies and before you know it gm will stand for government motors. and heck, while we're at it, we might as well sell the health insurance industry to the govt as well. the USA is teetering awfully close to socialism

[aMaff]

not only that, but when this 'artificial demand' wears off, whats gonna happen? we'll be back in the same place we are now. and we'll continue to dump money into shitty companies and before you know it gm will stand for government motors. and heck, while we're at it, we might as well sell the health insurance industry to the govt as well. the USA is teetering awfully close to socialism

Ding ding ding! We have a winner.

[coolmazda5]

not only that, but when this 'artificial demand' wears off, whats gonna happen? we'll be back in the same place we are now.

Not sure, GM and Chrysler are still going bankrupt, they will stop producing many types of low MPG cars they produce today and they've been mandated very strict objectives to transform themselves and build more efficient cars thanks to the new emission rules which need to be achieved by 2016, so to me this is temporary to offload all the excess of inventory, start improving MPG in general and get ride of crappy MPG cars, so there is no going back to the same place where they were IMO.

If the government would have put this incentive yet let GM and Chrysler keep on producing the same gas guzzlers at the same level of production without firing anyone, then that would very very bad.

[sam1]

Not sure, GM and Chrysler are still going bankrupt, they will stop producing many types of low MPG cars they produce today and they've been mandated very strict objectives to transform themselves and build more efficient cars thanks to the new emission rules which need to be achieved by 2016, so to me this is temporary to offload all the excess of inventory, start improving MPG in general and get ride of crappy MPG cars, so there is no going back to the same place where they were IMO.

If the government would have put this incentive yet let GM and Chrysler keep on producing the same gas guzzlers at the same level of production without firing anyone, then that would very very bad.

The product line-up may have drastically changed by that time, but that's not what I'm saying. When this falsified demand they're tying to create finally wanes, less people are going to buy because there won't be an incentive to buy. And to add to that, the majority of the population is most likely going to be feeling the sting of this recession for years to come(wait til interest rates skyrocket-already starting), which will keep demand low as there will be less people wanting to (or able to) finance new vehicles.

so when demand drops off the cliff again, where is gm and chrysler going to turn to? And since the govt has already invested so heavily in shoddy companies making shoddy products, they're not going to want to see that money go down the drain, so they'll send them another check. And as proof of this, look back into chryslers history and you'll see that this is not the first bailout they've received. This is a recurring problem. And infact, the closer you look into that company's past, you'll see that the 2008/2009 bailout of chrysler was due to nearly identical circumstances to the 1979 bailout. Gas prices were extraordinarily high, they were selling gas guzzlers nobody wanted, couldn't change their lineup quick enough, and ran the company into the ground. And rest assured, this won't be the last time, either, as long as the company is run by morons and the govt is willing to send them checks, they'll be in line for a handout any time its available.

[sam1]

And on that note, what I think needs to happen is the general population needs to wake up, get some common sense, and demand that this nonsense be put to an end. There is no fiscally responsible way, nor is there any reason, for the government to own an auto company, insurance company, or any company for that matter. Dumping it's (our?) money into a nonperforming company is one of the worst ideas these beaurocrats have ever come up with.

[coolmazda5]

Valid points, but if IIRC Chrysler repaid all the government loans made to them in 1979 and actually the government made money out of those loans.

Yet I agree, I don't see this happening this time around, the situations seem far worse than in that year (and there is no Iacocca this time, LOL)

Yet, on the other side, while I understand that the government should not become the daddy of big loser corporations, in the case of the American automakers, there seems to be a moral obligation to "pay back" by giving them a shot of cash and a less painful death or another chance to make it through, especially as GM (and to some degree Chrysler) were vital pillars of the industrial power and a symbol of the global manufacturing prestige that put the US economy to where it is today (before they started f&^%ng things up of course)

Oh well, too much (blah), LOL

[Cataphract_40]

OMFG

http://www.bloomberg.com/apps/news?pid=20601087&sid=aWKYBKED5EKI

Apparently the entire $1 billion allocated for this program was burned through in only six days.

[tunersteve]

OMFG

http://www.bloomberg.com/apps/news?pid=20601087&sid=aWKYBKED5EKI

Apparently the entire $1 billion allocated for this program was burned through in only six days.

I highly doubt we blew a billion on that in 6 days. Seems to me like they have to catch up, or beef up the system to more readily accomodate the huge movement that this has become.

On the other hand, I don't think destroying the motors of these cars is the right solution for the situation. I think there are plenty of people who are out there and trying to make an honest living and own a car that may need a motor or trans from a 'clunker'. By trashing the motors, you force them to buy a part that in the end will cost them more money, simply because you're trying to get inefficient cars off the roads.

I think moving these cars to scrap yards, giving them the option to pull the pertinent parts off, then keeping said car for an allotted time (6 months works), then scrapping the car for good is a good idea.

People need to remember we're in a recession/depression. Not everyone has the expendable income to go buy a new car, regardless of incentives. I'm sure there are people who could swing a $500 motor payment, but not a $250/month car payment, plus the inflated insurance that comes with it.

[TinmanMS6]

About five seconds after I first heard about the Cash-for-Clunkers program, I wondered how long it would take before the politicians in Washington decided that if this is such a great temporary idea, how much better it will be when it becomes permanent.

Well, that hasn't happened yet, but it has been announced that the response on the part of buyers has been so over-whelming - more than $850 million of the $1 billion made available was spoken for in a mere four days! - that the program is being suspended.

Don't be surprised if Congress and President Obama use this temporary reprise and the public response to the program as the occasion to make it a permanent federal entitlement as part of government's anti-global warming effort.

Here are three reasons why you can bet this will happen:
First, anytime Congress and the White House see an opportunity to take tax dollars and give them to somebody who can vote, they will do it. In a $3.4 trillion annual federal budget, the $1 billion for Cash-for-Clunkers might seem like a drop in the bucket. The politicians have a billion reasons for why that is the wrong way to look at it.

Second, Washington cash always comes wth strings. Just look at the 15 pages of regulations telling dealers how they must dispose of the trade-ins. And don't forget NHTSA has to approve each and every deal. Right there, the government is telling the buyer and the seller what to do. That's an irresistible opportunity for the Washington politicians and bureaucrats to expand their power and perogatives over the rest of us.

Third, the timing is perfect. The economy is in a recession. The auto industry is in a depression. People are hungry for positive economic news. In just four days, Cash-for-Clunkers has given new life to the whole idea that government spending is the way to stimulate the economy. People are more receptive now than they will ever be to the idea of making a temporary measure permanent.

Fourth, Washington money is like crack cocaine. Smoke it once and odds are you are hooked. Desperate dealers are already lobbying their congressmen to keep the Cash-for-Clunkers going a little while longer. That's just putting off the inevitable agony of withdrawal. Congressman Pusherman will say, "Here, let's make you feel better for good."

Finally, the media won't tell the whole story of Cash-for-Clunkers. Reporting on it will emphasize two things - Happy dealers and buyers getting new cars and trucks, and worried dealers wondering what will happen when the program ends.

What won't be reported will be the actual cost of the program to the taxpayers, the transitory economic stimulus it provides, and how the most severe consequences will be felt among low-inomes people who must depend on used cars and trucks for their transportation.

[TinmanMS6]

more than $850 million of the $1 billion made available was spoken for in a mere four days!
One thing worth noting regarding the above:
Dealers started pushing the program before the federal government officially rolled it out, so we're talking about weeks, not days.

[coololddude]

The program will last forever if they include wives!!

[1sty]

The Hyundai dealer I purchased my Genesis from said this last Saturday was the best sales day the dealership has ever had because of that program.

[TinmanMS6]

Yes, but will continuing the program indefinitely maintain those sales? I think not. People are rushing out to take advantage of what they see as a limited time offer. They're pulling sales ahead and cannibalizing sales in the coming months.

Oh, yeah, and the American taxpayer is paying $4500 to scrap a 1987 Ford Econoline.

[evilmonkeyMSP]

I dont think it should be permanent. It will lose its luster pretty quickly if people dont realize they need to act now to take advantage of it which will make its intended effects prettymuch nil.

[RacerXGirl]

MiaTurbo posted something about this on his FB, where he did the math on fuel costs, maintenance, etc. on the "clunker" car versus fuel costs, maintenance, car note, etc. on the new car...it was ridiculous how long it would take for you to realize the cost benefit savings of having traded in the clunker for the new car.

Yeesh...I'll stick with our two paid off cars that get decently good fuel mileage...

[GoFast]

Oh, yeah, and the American taxpayer is paying $4500 to scrap a 1987 Ford Econoline.

That is exactly right

[1sty]

Yes, but will continuing the program indefinitely maintain those sales? I think not. People are rushing out to take advantage of what they see as a limited time offer. They're pulling sales ahead and cannibalizing sales in the coming months.

Oh, yeah, and the American taxpayer is paying $4500 to scrap a 1987 Ford Econoline.

Didn't say it would.
To me this is another fantastically bad idea of the Obama administration to avoid having to address any real problem with the economy and just kick the can down the road further.
The REAL issue is that Americans have been living in unmanageable debt and we KEPT BUYING MORE. Suddenly we all got scared enough to stop being idiots which made the economy come back to reality instead of being over inflated on bad debts.
So the governments amazing answer is to help us get into MORE DEBT so the economy keeps trucking.
They want banks to lend more, to people that already cant pay their bills and no.

I just cant wait for the College/higher education bubble to break when my generation has kids and encourages them to only go to college once they know what they want instead of the 80% of my friends that still live at home with a completely worthless education in sociology, liberal arts, or basic business. And if you think I am nuts here, consider Harvard University just laid off 200 people.

[tunersteve]

The problem I have with this is that although it stimulates the auto industry, it still hurts a certain portion of the American public. Right now, we're still in a recession, and unemployment is at a high point, and we're worried about selling cars...What happens to the family who can't afford a new car, but needs parts to keep their 'clunker' running safely? Can't save a motor from these and let the scrap yards recoup some money and benefit as well, instead we destroy the motors and the cars are worth only $2-300 at the end?

I think the idea is novel, but the execution was flawed. I sincerely hope that this is a short lived program, so that they can focus on more important tasks, and some car buyers can get a steal of a deal while the money is there.

[1sty]

IDEA!
How about instead of cash for clunkers, they have cash for POS!
Basically you can trade in any "American" that was built outside of this country for an "import" that is actually build here.

That would have been great to help me get out from the worthless Pontiac my wife had.

[Cataphract_40]

In a surprisingly quick move, the House has now authorized an additional $2 billion for the program:

http://www.bloomberg.com/apps/news?pid=20603037&sid=aZQsGa9XbZGY

[TinmanMS6]

OMFG

http://www.bloomberg.com/apps/news?pid=20601087&sid=aWKYBKED5EKI

Apparently the entire $1 billion allocated for this program was burned through in only six days.

Hyundai's been taking Clunkers for this program for weeks before the gov't finalized the program, and others followed suit. It's really been a few weeks, and right now they're shitting their pants because they have no idea how many deals are in the pipeline, and everything's so screwed up they have no way to find out.

[aMaff]

Hyundai's been taking Clunkers for this program for weeks before the gov't finalized the program, and others followed suit. It's really been a few weeks, and right now they're shitting their pants because they have no idea how many deals are in the pipeline, and everything's so screwed up they have no way to find out.

that's a well thought out and executed plan if I've ever seen one!









http://img2.pict.com/1f/99/e3/a99c8ffc8fad631c877e6de585/0nPzy/truckoffail.jpg


Don't even get me started on government subsidized cell phones...(doughpoke

[Hughes412]

You better hope it don't last. They just offered 2 BILLION more for the program. WHO PAYS FOR THAT? This program is a joke. It's only for early 90 models. All of those cars have better emmissions and better MPG then the 70-80s models. Why not take the older cars first. This is just another screwed up waist of tax payers money. Thank you Mr O!(jerkit)

[GoFast]

You better hope it don't last. They just offered 2 BILLION more for the program. WHO PAYS FOR THAT? This program is a joke. It's only for early 90 models. All of those cars have better emmissions and better MPG then the 70-80s models. Why not take the older cars first. This is just another screwed up waist of tax payers money. Thank you Mr O!(jerkit)


Just? They offered that last week....

[stdntDrvr]

they're hurting the auto industry just like gm/chrysler/ford hurt themselves a few years ago with the 'employee pricing' program. sure, business was freaking amazing during that program...but afterwards, it sucked...i know first hand. what they did was to get people out of their normal trade cycles. There were customers who bought cars who would have normally waited a year or two just to get the deal...so, what happens? Those customers you could rely on like clockwork had already bought...so you had little to no business in the years following. It was one of those things where the dealers were happy at first...but once we realized what this did to the future of the business, we were stuck. Business was horrible...and i do mean horrible...in the months following. you had those that you would have expected to see in the coming months/years that would now be 'out of the game' for a longer period of time...and those who said 'i'm not buying...they're going to bring that program back.'

same situation, different day. way to go, obama. the problem with the manufacturers would have worked itself out...but now you threw another wrench into it.

[TinmanMS6]

The autoblogosphere is abuzz with debate over the Department of Transportation’s (DOT) list of the top ten Cash for Clunking vehicles. To say the least. Edmunds [via CNN] reports that the DOT counted vehicles EPA-style, tallying differing powertrain or drive wheel combinations separately. For example, the DOT rates a Ford Escape with two wheel-drive as a distinct model from a Ford Escape with all wheel-drive. If you’re Edmunds (or any one else with an ounce of common sense), you combine all the model variants’ sales totals into one stat. And if you do that, you get a horse of a different color. The implication making the rounds: the DOT manipulated the data to hide the fact that a brace of SUVs and pickup trucks made the top ten; the Cash for Clunkers program is supposed to be about saving the environment. Yes, well, high margin pickup trucks offer the best chance of saving the domestics. So, let’s compare the DOT list (as of August 7) with Edumunds’ take . . .


DOT-----------------------------------------------------------Edmunds

1. Toyota Corolla----------------------------------------------Ford Escape

2. Ford Focus-------------------------------------------------Ford Focus

3. Honda Civic------------------------------------------------Jeep Patriot

4. Toyota Prius-----------------------------------------------Dodge Caliber

5. Toyota Camry----------------------------------------------Ford F-150

6. Hyundai Elantra--------------------------------------------Honda Civic

7. Ford Escape (FWD)----------------------------------------Chevrolet Silverado

8. Dodge Caliber----------------------------------------------Chevrolet Cobalt

9. Honda Fit--------------------------------------------------Toyota Corolla

10. Chevrolet Cobalt------------------------------------------Ford Fusion

[skylar2ups]

I'm confused on what I'm looking at... could someone dumb it down?

[TinmanMS6]

When the DOT reported their top 10 cars that people were trading in their clunkers for, they counted 2WD/AWD/4WD separately, as the EPA does, rather than together, as somebody with a brain might. Therefore, a bunch of SUVs and trucks with multiple drivetrain layouts jumped up when those were added together.

For example, the FWD Escape was #7 on the DOT's list by itself. Once the 4WD Escapes are added to that number, it jumps to #1.

[soccom2005]

hmmm... thats not right.... youre saying ford escapes, all variant, are the number 1 vehicle that people are getting for their trade in...

[neox.286]

it gets good gas mileage
http://www.fueleconomy.gov/Feg/noframes/25622.shtml

[dmention7]

Just to set the record straight here... Cash for Clunkers is not an environmental program; it's purely a financial stimulus with a few hand-waving arguments to make it appear like an environmentally-friendly bill that's killing two birds with one stone.

In all but a relatively small number of cases of said "clunkers" being in a state of severe disrepair, destroying a car and building a replacement requires more energy, raw materials, and emissions than keeping a less efficient car on the road. If it had anything to do with environmental policies the trade-in requirements would be based on the "clunker"'s current state of operation, and the entire car would be made available for recycling.

[bazooka joe]

it gets good gas mileage
http://www.fueleconomy.gov/Feg/noframes/25622.shtml
thats the hybrid

[neox.286]

I know, that's my point

edmunds list does not specify which models are which, it is classifying all of the models as 'ford escape'...the OTHER list is separating it

thus that is more than likely why the ford escape is number 1 on edmund's list

[TinmanMS6]

The other list separates by FWD and 4WD, but does not specify 4-cyl, 6-cyl, or hybrid.

[neox.286]

ah, I assumed it did, I was mistaken

[Hughes412]

On top of that, just think what this is going to do to the auto parts industry. The majority of the parts sold now are for mid 90s cars and trucks. If you take these cars off the streets then there is no need for parts. Now parts stores will have more parts sitting on their selves. This program is going to hurt alot of people.

[stdntDrvr]

...this administration needs to learn to see the 'big picture' instead of just trying to please certain sectors...seriously, enough is enough.

[TinmanMS6]

At Central Avenue Nissan in Yonkers, N.Y., they love "cash for clunkers."
At Downtown Ford Lincoln Mercury in Canton, Ohio, they love it, too. Lots of cash deals; few cases of bad credit; gross profit per vehicle up "a couple of hundred dollars."

At the Grand Blanc-based Serra Automotive Group, with 38 franchises at 21 locations in six states, the boss appreciates that the controversial federal incentive program has consumers thinking cars after a year of mostly doing anything but.

Sales are booming. Inventory is thin. Customers are swarming showrooms, hungry for sweet, stackable deals (cash back from the automakers plus a cash-for-clunkers rebate of as much as $4,500) that can cut the price of some eligible vehicles in half.

All good, except for one thing: Many dealers still aren't getting paid. The bureaucratic maze is ridiculous: 156 pages of regulations governing 13 pages of forms are mated to a computer system that mostly is failing to accommodate demand from dealers across the country.

Brad Black, general manager of Downtown Ford, told me Monday his dealership has delivered 73 vehicles under the federal program but has received reimbursement for just one car.

"We've got a lot of money hanging out there," he says, "a lot" being roughly $330,000. "Every time you sell a car you reach into your pocket for $3,500 or $4,500. That's a lot of money and it comes right out of working capital."
Not that they'd understand such a simple business principle -- cash flow is the lifeblood of small businesses like car dealers -- in Congress or the Department of Transportation. Which is the problem, whatever your philosophical take on the simple fact that public money is being used to spur sales for a (mostly) private industry and its dealers.

"We've gotten paid nothing at this point, absolutely nothing," says Jonathan Grant, principal of Central Avenue Nissan, Central Avenue Chrysler Jeep and two other dealerships in Westchester County north of New York City. Altogether, Grant has about $800,000 on the line.

"It's blind faith at this point that we're going to get the money. We're trying to input stuff today and they can't get in. The computers are overwhelmed. It's a great program for the manufacturers, a great program for the consumers. For dealers, it's been an administrative nightmare."

And the Obama administration and its allies in Congress propose to overhaul (and potentially run) health care for more than 300 million Americans? Let's just say cash-for-clunkers doesn't inspire much confidence in Washington's bureaucratic acumen. Or its speed. Or its feel for a functioning market, the demands and expectations.
Serra Automotive has booked 650 cash-for-clunker deals, but as of Monday morning only 8 percent -- about 50 vehicles -- had been approved for payment by the government, says Joe Serra, president of Serra Automotive. Meaning he's taking a $2.6 million cash hit while his customers already are driving their new vehicles.

"If that doesn't happen, we've got issues," he says. "That will crumble me. We just don't have that kind of cash lying around these businesses, especially after the year we just went through."

Will the dealers get paid? Probably, because failure to do so would be a PR disaster of epic proportions. Will the program prove to be the jumpstart languishing auto sales need? Debatable, though depleted inventories already are forcing increased production schedules across the industry.

The more important question, it seems to me, is what the obvious administrative failures of cash for clunkers say about the federal government's capability to manage programs more typically run by the private sector. And, secondly, why is there a clamor for more of the same?

Auto dealers are in business to make money selling cars and trucks, not to serve as conduits for federal transfer payments. If nothing else, cash for clunkers proved Americans still love good deals -- and that their government cannot process them.

[Rogue]

LOL. Hooray for government!!!

[StealthWyvern]

wow i knew it was bad but not that bad.

[MAZDA_SPEED]

Wow!!! X2

[Kymerik]

government at its finest right there...

i listen to 700wlw everyday at work and they had a dealer owner on (chevrolet) and he said he sold something like 368 cars under this cash for clunkers program and hes been paid for just under 20 of them.

Why wont govt just go out and hang themselves in hotel closets...

[MazdaSpeeder]

This is awful. I hope we don't have dealers getting their bottom line seriously hurt by the end of this thing. I think the note in the article is right...do we really want a government that can't run a simple reimbursement plan well controlling our healthcare?(strike)

[CTt3P5]

This is awful. I hope we don't have dealers getting their bottom line seriously hurt by the end of this thing. I think the note in the article is right...do we really want a government that can't run a simple reimbursement plan well controlling our healthcare?(strike)

Ding Ding Ding.....I am thinking the same thing. Also waiting to see what happens with the USPS. Supposedly they will run out of money next month????

[TinmanMS6]

WASHINGTON — The Cash for Clunkers buzz is starting to wear off and it seems that some buyers are having serious second thoughts about getting on that government-funded bandwagon, according to a new survey. In the meantime, the U.S. Department of Transportation said that dealers by Tuesday's deadline had submitted a final total of 690,114 Cash for Clunkers deals for $2.88 billion in rebates.

The total is just under the revised $3-billion budget for the four-week program.

The new survey by CNW Purchase Path, of Bandon, Oregon, finds that of nearly 1,000 Cash for Clunkers participants, 17 percent say they have some or serious doubts that they should have made the new-vehicle acquisition.

"Primary reason: They are now facing a $275-$350-per-month car payment that didn't exist prior to acquiring the car or truck," said the report. "That amount, they say, could negatively impact the total family budget more than expected prior to buying the new vehicle."

In contrast, buyers' remorse hits about 6-8 percent of new-vehicle buyers within a month, said CNW Purchase Path.

Inside Line says: You might not feel so good after you remove that Cash for Clunkers party hat. — Anita Lienert, Correspondent

[TinmanMS6]

No shit? Never would have guessed. :rolleyes:

[aMaff]

"Primary reason: They are now facing a $275-$350-per-month car payment that didn't exist prior to acquiring the car or truck," said the report. "That amount, they say, could negatively impact the total family budget more than expected prior to buying the new vehicle."


Wow. And just when I had built up a shred of hope for us. Em 'r purdy smawrt. Good job on your taxpayer (partially) funded purchases....

[Rogue]

A report from NPR says the reason dealerships aren't getting their rebates is that they're not filling out the forms correctly... I'll see if I can find the actual report. I'm sure it's just a way to spin it to make it look like it's not the government's fault.

[TinmanMS6]

A report from NPR says the reason dealerships aren't getting their rebates is that they're not filling out the forms correctly... I'll see if I can find the actual report. I'm sure it's just a way to spin it to make it look like it's not the government's fault.

That's part of the reason. According to Jenn, some are refusing to destroy the customer car until their payment is approved--crazy idea, I know.

[Rogue]

I just read that the gov't computers crashed on Monday when everyone was trying to send in their forms.

[evilmonkeyMSP]

What do you mean I have to pay for the car? I thought I got to trade in my clunker for a new car for freeeeeeeeeeeeeee!
"Primary reason: They are now facing a $275-$350-per-month car payment that didn't exist prior to acquiring the car or truck," said the report. "That amount, they say, could negatively impact the total family budget more than expected prior to buying the new vehicle."

[TinmanMS6]

I just read that the gov't computers crashed on Monday when everyone was trying to send in their forms.

Yeah, they've been crashing all the time. They've extended the deadline to get the deals in indefinitely because nobody can get them submitted because the computer system blows.

[MazdaSpeeder]

I just read that the gov't computers crashed on Monday when everyone was trying to send in their forms.

I heard this too...and I don't understand. Are they running commodore 64s over there? It's just processing forms. Geez.

And the buyer's remorse thing is something I was worried about from the beginning. Right now unemployment is up, people who are employed are taking pay cuts and mandatory work reductions, thousands are upside-down on their mortgages, and the economy isn't "recovering." So let's go buy a new car? It seems like the absolute WORST time to buy a car. Plus, almost no one got a true "deal" because dealers were refusing to go below MSRP because of the huge govt discount. So there are plenty of big payments floating around.

Plus, this isn't what the government is for anyway, but whatever.

[bazooka joe]

if the plan was to help out car dealers/manufactors and get "clunkers" off the raod, then i'd say it worked. my gas hog explorer with 180k is gone and i have a new tribute and got a total of 8.5k off the sticker...i never would have bought a new car if it wasn't for the plan. probably would have gone the used route again, something with 20k on it for the around the same money! so the plan worked out for me..

[Rogue]

Were you making payments on the explorer?

Which is greater:
1. Your new monthly car payment + gas + full coverage insurance on a new vehicle
or
2. No car payment + gas + insurance on your old vehicle

[CTt3P5]

Valid point Rogue but I think Mark and a lot of others who capatilized on the plan had older high mileage vechicles that while paid for were getting to the point of 'do I fix it if it breaks or trade it in for jack?'. Without the plan how much would Mark have gotten for his Exploer with 180k?

Don't get me wrong I know there are a lot out there too that didn't need to buy but did for the hell of it and most likely didn't look at the big picture. All they kept hearing was '$4500 for your trade' and thought 'wow I can get a new car that gets better mileage'. I wonder how many people actually figured out how many years it would take them to break even.

[skylar2ups]

Not everyone is hurting. My boyfriends father owns his own cabinetry and countertop company and business has taken off in the last couple months. Getting 75k+ on three kitchens in one day. His mother remodels closets and she made 80k+ on one closet. They have bought and sold lots of cars in the past year, they are looking to buy a new Camero (they have a Vette to go with it.)

Likewise his grandfather goes out and trades in his cars every two years and gets two brand new cars.

Everyone is not hurting, but most are. There are still people out there that are better off then others and they might be the ones who are out buying... you can't bundle all of America in one bin.

[coolmazda5]

What do you mean I have to pay for the car? I thought I got to trade in my clunker for a new car for freeeeeeeeeeeeeee!

Once again I believe the buyer is being taken advantage of... (lol2)

[TinmanMS6]

And the buyer's remorse thing is something I was worried about from the beginning. Right now unemployment is up, people who are employed are taking pay cuts and mandatory work reductions, thousands are upside-down on their mortgages, and the economy isn't "recovering." So let's go buy a new car? It seems like the absolute WORST time to buy a car. Plus, almost no one got a true "deal" because dealers were refusing to go below MSRP because of the huge govt discount. So there are plenty of big payments floating around.

So now that they've given the auto industry this big "boost" (about one month's worth of new car sales in C4C, and how many were going to buy anyway?), sales will be in the shitter for the next 6-8 months because of all the sales they pulled forward, and all of these people who suddenly have a payment that they didn't have before might be screwing up their credit. Now, on top of that, what happens to used car prices now? We've just gotten close to a million of the cheapest used cars available off the road, decreasing supply and potentially pushing up the average used car transaction since people won't be able to find as many ~$2000 cars. This is going to prolong the pain for the auto industry and, I think, credit and lending for a couple years.

[TinmanMS6]

if the plan was to help out car dealers/manufactors and get "clunkers" off the raod, then i'd say it worked.

Good plan <> Good idea.


Once again I believe the buyer is being taken advantage of... (lol2)

Those damn dealerships are always out to screw us!

[TinmanMS6]

http://www.egmcartech.com/wp-content/uploads/2009/08/cash_for_clunkers_gm.jpg

While cash-for-clunkers gave great rebates to those who qualified, consumers are going to be feeling the economic pinch in the months to come. The program has depleted inventories, and during a time when car shopping is usually at its peak, the short supply will cause a price surge, many analysts believe.

While the program was certainly successful in driving traffic to dealerships, it came along a bit late to be maximally effective. Jeremy Anwyl, CEO of Edmunds.com, told CNN that the program would have seen much more benefit had it been launched in February, when inventories were high and sales were through the floor.

Anwyl said that auto sales will drop off 50 percent in the coming weeks. He said that prices will remain high for the next few months, but will then start to fall as inventory catches up with demand.

[TinmanMS6]

Hadn't thought of this, but yeah, that too.

[TinmanMS6]

Cash-for-clunkers has triggered what the White House says could be the biggest two-month spike in auto sales on record. A preliminary analysis submitted to Congress puts GDP estimates at 0.3 to 0.4 percentage points higher at annual rate when compared to what it would have been without the program, reports Automotive News.

This increase “will be sustained in the fourth quarter” because of increased auto production to replace dealer inventory, the White House said.

The need for dealers to replace inventory will stimulate the long-term economy, as 42,000 jobs are expected to be generated during the second half of 2009. Both GMand FoMoCo have announced plans for increased production during the second half of the year to replenish inventory depleted by clunkers.

The White House also predicts long term environmental benefits, as there will be more cars on the road with better emissions output ratings. The average fuel-economy of a new vehicle purchased was 24.9 mpg - a 58 percent improvement.

[TinmanMS6]

WTF? Yeah, i guess we might get a few people back to work until inventories come back up. Let's just hope they don't go overproducing and screwing themselves and dealerships like they did before. I'd guess keeping production right where it is will be fine, since nobody's going to be buying cars for months now.

Edit: 6 posts in a row FTL!

[stdntDrvr]

i'll stand by my original post. this was just as bad of an idea as employee pricing...but this time, we're all paying for it.

i really dislike this administration...and that's putting it lightly.

[bazooka joe]

Were you making payments on the explorer?

Which is greater:
1. Your new monthly car payment + gas + full coverage insurance on a new vehicle
or
2. No car payment + gas + insurance on your old vehicle

i owned the explorer..paid for it a long time ago
i bought the car with my equity loan, 2% and i'll get the balance paid off in 2 yrs or a little less

[Cataphract_40]

http://shop.cafepress.com/design/35238431

[bazooka joe]

(lol)

[tunersteve]

Nice shirt!

Joe what is that in your pic? Escape?

[bazooka joe]

Nice shirt!

Joe what is that in your pic? Escape?
WHAT??? a ford????..haha...it's bog brother...tribute

[TinmanMS6]

DETROIT/PARIS (Reuters) – U.S. auto sales boomed in August as $3 billion in government incentives drove sharp gains for Hyundai Motor Co and Ford Motor Co but failed to provide a boost for General Motors Co in its first full month outside bankruptcy.

Ford reported a 17 percent jump in monthly sales on Tuesday and the success of the U.S. government's "cash for clunkers" trade-in incentives pushed overall industry sales to the first year-on-year increase in 21 months.
Korea's Hyundai posted a 47 percent increase as sales of its Elantra sedan more than doubled.

The U.S. government incentive program also helped Honda post a 10 percent sales gain while Toyota Motor Corp sales were up 6 percent.

The two U.S. automakers to have emerged from government-sponsored bankruptcies -- GM and Chrysler -- lost market share during the August sales bonanza.

GM sales dropped 20 percent, while Chrysler was off 15 percent. Nissan Motor Co sales fell almost 3 percent from record levels of a year earlier.
Meanwhile, auto sales rose in France and Italy and stabilized in Spain on the success of similar government-backed sales incentives, data released on Tuesday showed.

The now-exhausted U.S. "clunkers" program, which was inspired by the programs in France and other European markets, drove a rush into dealerships in July and August.

More than 690,000 vehicles were scrapped in the United States for taxpayer-funded credits of up to $4,500 as consumers took advantage to drop gas-guzzling trucks and SUVs.

On an annualized basis, industry-wide U.S. sales topped 14 million units, according to Autodata.

That was up from 13.6 million a year earlier but still far below the 16 million range that had been seen as the bottom for the market until 2007.

WINNERS AND LOSERS
The winners in the U.S. incentive program were Asian automakers and Ford, which benefited from a stronger lineup of smaller cars and crossover vehicles, analysts said.

The result has been a more evenly matched battle for sales among the major automakers in the U.S. market that threatens to upset long-held market share rankings.

Hyundai and its affiliate Kia Motors Corp now command a combined 7.5 percent market share, making them larger on that basis than Nissan Motor Co.
GM, meanwhile, saw its share of sales of its core brands -- Chevrolet, Cadillac, Buick and GMC -- drop to 16.3 percent of the U.S. market in August. That lagged Toyota's U.S. market share of 17.8 percent for the month.
"I think perception hurt GM," said Jessica Caldwell, director of industry analysis at Edmunds.com. "People didn't really see GM as a place to turn to when they needed to buy a fuel-efficient vehicle."

GM sales chief Mark LaNeve said the U.S. incentive program had clearly benefited Asian automakers more than GM.

"If it would have been a cash for capable trucks (program), we would have killed them, but it wasn't," LaNeve told reporters and analysts. "It was designed for smaller cars and smaller crossovers and although we're gaining ground quick, they still have more volume in that area."

Chrysler, now under control of Italy's Fiat, said it had lost potential sales when dealers ran short on some models after it shut down all of its production during a bankruptcy process that ended in June.

Chrysler responded with a continued program of discounts of up to $4,500 in rebates on select models this month.

Meanwhile, Ford, the only U.S. automaker to avoid a federally sponsored bankruptcy, posted its second consecutive monthly sales gain and said signs of a recovery in pickup truck demand pointed toward a broader recovery in the economy.

GAUGING THE PAYBACK
Ford reported the first increase in sales of its market-leading F-Series pickup trucks in almost three years.

Trucks like Ford F-150 are widely used in the U.S. construction industry. Pickup sales have dropped sharply in recent years on a combination of high gas prices, tight credit and the slowdown in home building.

Although major automakers said they expected September U.S. sales to tumble in the wake of the "clunkers" boom, executives also said they were banking on improved demand in the fourth quarter and a rebound of 10 percent or more in 2010.

"We see some drop-off in September, but we are starting to see concrete signs of automotive recovery moving into the fourth quarter," said Bob Carter, Toyota's manager of its main brand in the United States.

BMW said it also expects U.S. sales to increase over the remainder of the year even without any further support from the Obama administration.
"I think they've done the experiment. It's worked. But I don't think it will be repeated," BMW North America President Jim O'Donnell told Reuters.
He added: "I think car sales will continue to steadily rise as we move out of the worst of the recession.

Elsewhere, auto sales in Canada fell for a 10th consecutive month.
But France saw a 7 percent gain in August car sales and the French government said it would continue to fund its equivalent of the "clunkers" program to encourage consumers to swap out of old cars into 2011.

Car registrations in Italy were up almost 9 percent in August.
Spanish car sales stabilized in August after 16 months of declines. Car sales for Germany, Europe's biggest market, are due on Wednesday.

[aMaff]

Ford reported a 17 percent jump in monthly sales...
Korea's Hyundai posted a 47 percent increase
Honda post a 10 percent sales gain
Toyota Motor Corp sales were up 6 percent.

The two U.S. automakers to have emerged from government-sponsored bankruptcies -- GM and Chrysler -- lost market share.

GM sales dropped 20 percent
Chrysler was off 15 percent.

I'd say that's pretty damn telling.

[coolmazda5]

http://www.egmcartech.com/wp-content/uploads/2009/08/cash_for_clunkers_gm.jpg




"I think perception hurt GM," said Jessica Caldwell, director of industry analysis at Edmunds.com. "People didn't really see GM as a place to turn to when they needed to buy a fuel-efficient vehicle."


Oh really? Would that picture tell us why that perception? :D