Cash For Clunkers: Federal Rebate Revs Up Buyers

FirefightnRick · July 30, 2009

http://www.startribune.com/business/519439...?page=1&c=y

But dealers reported problems with the government's online system to get the transactions approved by the National Highway Traffic Safety Administration (NHTSA), which is running the program.
Scott Lambert, vice president of the Minnesota Auto Dealers Association, said he was "astounded" to learn at a meeting Tuesday representing about 150 Minnesota dealers that not one has had a deal approved.
"We had dealers representing 1,500 to 2,000 transactions," he said. "We asked how many had a deal approved yet, and not one hand went up."

.

.Cash for Clunkers: 136 Pages of Rules and Regs; How Many Pages for Government Health Care?

How does the dealer know if the transaction qualifies? The government rules, requirements and procedures are outlined in this 136-page government document, whose title is enough to make your head spin:
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Parts 512 and 599
[ Docket No. NHTSA-2009-0120 ]
RIN 2127-AK53
Requirements and Procedures for Consumer Assistance to Recycle and Save Program
Here's an excerpt of just one part of one of the 136 pages:
As set forth in section 599.200©, dealers that have been contacted by mail by the agency and that wish to participate must register to do so electronically, using the authorization code and following the instructions provided in the mailing, and fill out an electronic screen providing, among other things, name and contact information and bank account and routing data for receiving payment under the program. The agency will review this information to ensure completeness, and verify that the dealer has a still active franchise agreement (based on the continuously updated list provided by OEMs).

Rick

FirefightnRick · August 1, 2009

New York Times: Dealers race to get their clunkers crushed.

“There is absolute frustration across the board,” Alex Kurkin, a lawyer based in Miami who represents several car dealerships, tells The Lede today. “As of this morning, they’re not really confident about any deals, and no one can give them advice about what they should be telling their customers.”

Rick

H-towngreen · August 1, 2009

Along the same lines I wonder if they are planning on extending the first time home buyers credit?

UNTflyer · August 1, 2009

Should be called "Cash for SUVs" because pretty much only SUVs and large pick-ups will qualify.

FirefightnRick · August 1, 2009

Should be called "Cash for SUVs" because pretty much only SUVs and large pick-ups will qualify.

As long as they get less than 18 miles per gallon.

Rick

hickoryhouse · August 2, 2009

Less that 18 according g to EPA estimates. My crap Taurus gets a out 15 on avg but the govt thinks it gets 21. Not eligible.

meangreenacct · August 3, 2009

Less that 18 according g to EPA estimates. My crap Taurus gets a out 15 on avg but the govt thinks it gets 21. Not eligible.

I definitely think the mileage for the program should be based on the actual mpg the vehicle gets. So take the EPA estimate and knock of 3-5 mpg. I don't know all the details of the program, but it would be nice if the program also had an age clause like the one for Texas did. Something like under 18 mpg or 10 years or older would be nice. Stimulate the economy while getting some of the vehicles that tend to be high polluters off the road.

yyz28 · August 3, 2009

There should be no Cash for Clunkers program. No handouts. Jesus...

If you want a new car - GO BUY THE F$%KING THING YOURSELF!!!!!! ...and if you can't afford it or have s$&^ty credit, TOUGH.

Damn, when are we going to stop this crap in this country. I'm putting "Cash For Clunkers" in my back pocket so everytime one of my liberal friends claim we don't have any room to cut programs I can whip it out on them.

Edited August 3, 2009 by yyz28

oldguystudent · August 3, 2009

There should be no Cash for Clunkers program. No handouts. Jesus...

I think the idea was genius, but the product was wrong. If they'd do this for spouses...

KRAM1 · August 3, 2009

I think the idea was genius, but the product was wrong. If they'd do this for spouses...

I'm thinking your wife has the same idea... :lol: :lol:

Just another gov't handout that the taxpayer will pay for with their hard earned money. I just love the idea that I am now helping folks buy new cars...already helping folks pay for homes they couldn't afford...now it's cars and they are working on having the taxpayer pay for health care for EVERYONE whether they earn a dime or not....man, why should some of these folks work...Uncle Sugar will take care of it for you. Nice.

FirefightnRick · August 3, 2009

There should be no Cash for Clunkers program. No handouts. Jesus...
If you want a new car - GO BUY THE F$%KING THING YOURSELF!!!!!! ...and if you can't afford it or have s$&^ty credit, TOUGH.
Damn, when are we going to stop this crap in this country. I'm putting "Cash For Clunkers" in my back pocket so everytime one of my liberal friends claim we don't have any room to cut programs I can whip it out on them.

Absolutely! Just say no to........................

.

Have you seen this poster?

.

Have you seen this poster?
Apparently, it's beginning to appear in odd places in Los Angeles, but nobody seems to know who's responsible for it.

Rick

Edited August 3, 2009 by FirefightnRick

Green Mean · August 4, 2009

What is the big deal? It is just an incentive the government is giving to the public. No one is putting a gun to their head making them do it.

UNTflyer · August 4, 2009

What is the big deal? It is just an incentive the government is giving to the public. No one is putting a gun to their head making them do it.

Giving away $1 billion, and it seems like more to come, so people can buy cars.

Where's my pony?!?!

Censored by Laurie · August 4, 2009

Giving away $1 billion, and it seems like more to come, so people can buy cars.
Where's my pony?!?!

I'm feeling more and more that as children that many of you set up only two dominos before you grew impatient and knocked them onto each other...never fully realizing that using many dominos would be much cooler.

Or you grew up in a bubble, unaware that life occurs outside it...

NT03 · August 4, 2009

I'm feeling more and more that as children that many of you set up only two dominos before you grew impatient and knocked them onto each other...never fully realizing that using many dominos would be much cooler.
Or you grew up in a bubble, unaware that life occurs outside it...

2 fantasy football teams would be much cooler than your 1

yyz28 · August 4, 2009

I'm feeling more and more that as children that many of you set up only two dominos before you grew impatient and knocked them onto each other...never fully realizing that using many dominos would be much cooler.
Or you grew up in a bubble, unaware that life occurs outside it...

Demanding that our governement function within the confines of the Constitution and not take my hard earned tax dollars and hand them out to someone else makes those of us who disagree with this policy uncreative children? Wow, that's a jump of logic. ...but not unexpected coming from you, my friend...

Censored by Laurie · August 4, 2009

Demanding that our governement function within the confines of the Constitution and not take my hard earned tax dollars and hand them out to someone else makes those of us who disagree with this policy uncreative children? Wow, that's a jump of logic. ...but not unexpected coming from you, my friend...

Wow...analogies just fly right over your head. The point is that everybody is complaining about the immediate effects of some of these programs, the first step...maybe second, while ignoring or just not thinking through the down the road benefits. The same thing happened with the inane ham thread.

So...a half-ass flow chart for you...I'll find pictures if needed:

- Man has 2002 Ford F-150 that gets 17mpg.

- Man wants new, smarter vehicle...but doesn't find it economically feasible

- "Cash for Clunkers"

- Man now has incentive to buy that 2009 Ford F-150 that gets 22mpg

- Man trades in old car:

- gets "cash"

- gets less efficient vehicle off the road

-child doesn't die of emphysema

- Man gets new car

- saves money on gas

-spends saved money on ham

- Ford sells more vehicles

- creates jobs

- workers spend money on ham, maybe even "cash in their clunkers"

- generates revenue

- Government taxes Ford

- makes back money spent on "cash for clunkers"

LongJim · August 4, 2009

Wow...analogies just fly right over your head. The point is that everybody is complaining about the immediate effects of some of these programs, the first step...maybe second, while ignoring or just not thinking through the down the road benefits. The same thing happened with the inane ham thread.
So...a half-ass flow chart for you...I'll find pictures if needed:
- Man has 2002 Ford F-150 that gets 17mpg.
- Man wants new, smarter vehicle...but doesn't find it economically feasible

How about this flow chart? Some of the same ends can be achieved:

Man keeps 02 F-150, and pockets extra $350-$400 he would be paying in new truck payments. Repairs truck when needed. Stimulates local economy. Buys stuff with money saved. Economy reaps increased tax collection from his extra cash. Creates jobs. Possibly saves something extra in his 401K or mutual fund. Learns to live within his means.

or

Man sells 02 F-150 locally. Makes more than $4500. Possibly 5 or 6 grand. Puts down payment on new truck at his leisure, or perhaps purchases a 'newer' used one. Helps his neighbor, or Ford in the process. Stimulates himself in celebration. Eats ham.

Government stays the hell out of it.

My wallet doesn't get picked against my will.

DoubleEagle · August 4, 2009

Wow...analogies just fly right over your head. The point is that everybody is complaining about the immediate effects of some of these programs, the first step...maybe second, while ignoring or just not thinking through the down the road benefits. The same thing happened with the inane ham thread.
So...a half-ass flow chart for you...I'll find pictures if needed:
- Man has 2002 Ford F-150 that gets 17mpg.
- Man wants new, smarter vehicle...but doesn't find it economically feasible
- "Cash for Clunkers"
- Man now has incentive to buy that 2009 Ford F-150 that gets 22mpg
- Man trades in old car:
- gets "cash"
- gets less efficient vehicle off the road
-child doesn't die of emphysema
- Man gets new car
- saves money on gas
-spends saved money on ham
- Ford sells more vehicles
- creates jobs
- workers spend money on ham, maybe even "cash in their clunkers"
- generates revenue
- Government taxes Ford
- makes back money spent on "cash for clunkers"

How about this:

The government gives the tax receipts used to fund the "cash for clunkers" program back to the 40% of Americans who actually pay taxes. Those Americans then buy or invest at their discretion. Government then taxes the resulting incremental economic activity via corporate/individual income tax or capital gains tax.

Our savings rate is around 5% at the moment, therefore approximately 95% of the returned tax receipts would end up back in the economy, with the benefit being spread to all sectors of the economy, not just an industry hand picked by the U.S. Government.

Censored by Laurie · August 4, 2009

How about this flow chart? Some of the same ends can be achieved:
Man keeps 02 F-150, and pockets extra $350-$400 he would be paying in new truck payments. Repairs truck when needed. Stimulates local economy. Buys stuff with money saved. Economy reaps increased tax collection from his extra cash. Creates jobs. Possibly saves something extra in his 401K or mutual fund. Learns to live within his means.
or
Man sells 02 F-150 locally. Makes more than $4500. Possibly 5 or 6 grand. Puts down payment on new truck at his leisure, or perhaps purchases a 'newer' used one. Helps his neighbor, or Ford in the process. Stimulates himself in celebration. Eats ham.
Government stays the hell out of it.
My wallet doesn't get picked against my will.

1. Thank you for the emboldened sentences.

2. How are either of your solutions working out for Ford right now?

yyz28 · August 4, 2009

Wow...analogies just fly right over your head. The point is that everybody is complaining about the immediate effects of some of these programs, the first step...maybe second, while ignoring or just not thinking through the down the road benefits. The same thing happened with the inane ham thread.

The analogy is a. flawed, b. not very good, and c. irrelevant.

- Man has 2002 Ford F-150 that gets 17mpg.

Under what article and section of the constitution is the man's Old F150 a concern of the federal government's? I'm not sure, mabye I'm being obtuse and stopping at step one, so I'll keep reading...

- Man wants new, smarter vehicle...but doesn't find it economically feasible

Still trying to find why the Government should be involved at all here. If the man wants a new car, he should either figure out how to do it on his own, or do without. This is just how life is. If you can't afford it, do without. I'm still looking for the Constitutional authority under which "Cash for Clunkers" falls.

- "Cash for Clunkers"

Cash for Clunkers - a wealth redistribution program, based on one group behaving in a way the Government desires, despite the legal freedoms of every US Citizen to make another choice the Government not like as much. Our tax dollars are being spent to allow people who can't afford a new car (or, more likely, CAN afford to get a new car without the tax advantage, but are going to take the handout because it is there) when we can't keep Social Security solvent. This points to extremely flawed priorities.

- Man now has incentive to buy that 2009 Ford F-150 that gets 22mpg

If wealth redistribution is required to gain an incentive, then there is no real business case for more economical cars. If there was a good business case, this would be happening in the free market without the (totally unconstitutional) government intervention.

- Man trades in old car:
- gets "cash"
- gets less efficient vehicle off the road
-child doesn't die of emphysema

If the benefit of the more efficient vehicle made a good economic sense to the consumer it would happen without a government program. There is no consideration about the fact that the energy needed to build the new car is greater than the environmental impact of 4-5 MPG over the lifetime of the vehicle in terms of (so called) greenhouse gasses. The child not dying of some respritory disorder is a straw man and a non sequitor.

- Man gets new car
- saves money on gas
- spends saved money on ham

The man could have had no car payment and paid slightly more for gas, and had plenty left over to still buy the ham. Do you know how much gas you can buy for the cost of a car payment?

- Ford sells more vehicles
- creates jobs
- workers spend money on ham, maybe even "cash in their clunkers"
- generates revenue

No doubt this is a winfall for Ford, GM and the other car makers. I object in the same manner I objectected to the bailout of GM. It isn't the place of the Government to mess with the free market. These companies should rise and fall on their own merits and products.

- Government taxes Ford
- makes back money spent on "cash for clunkers"

...and there is the biggest fallacy in your argument. There is no way that the federal government's tax take on each vehicle is greater than the Cash for clunker's rebate. The ONLY way your argument be true is for the FEDERAL government to get more than $3500 tax revenue per the average vehicle sold under this program in the form of tax revenue from Ford, which, I think we all know, isn't going to happen.

Moreover, when you get past the headlines, it becomes clear that your brilliantly flowcharted scenario... Isn't what is really happening -

‘Cash for Clunkers,’ By the Numbers

By Ken Belson - Wheels Section, New York Times - August 4th, 2009

The “cash for clunkers” program introduced last week appears to have been a success, at least based on the tens of thousands of consumers who streamed into their local car dealers to swap their beaters for new, more fuel-efficient replacements.

According to a survey of car dealerships and 2,200 consumers by CNW Research, the average fuel economy of vehicles traded in last week was 16.3 miles per than the 18 m.p.g. needed to qualify for a government rebate of $3,500.

The relatively small differential suggests that consumers have not been turning in the oldest, dirtiest and least fuel-efficient cars, but instead have been getting rid of their second and third cars, according to Art Spinella, who ran the survey.

“These are third cars used for kids in school,” Mr. Spinella said.

The vehicles that consumers bought with their credits had average fuel efficiency ratings of 24.8 miles a gallon, he said.

Lawmakers hoped the “cash for clunkers” program, formally known as the Car Allowance Rebate System, would reduce America’s dependence on imported oil. But the early results of the program suggest that may not happen. The vehicles turned in were driven about 6,000 miles a year, he said. If the new vehicles are driven about 12,000 miles a year, the rough annual average, then consumers will actually use more fuel, not less.

“The energy independence argument did not ring true, at least so far,” Mr. Spinella said.

He added that the average annual income of those who bought cars with their rebates was $57,700, just under the $61,000 for all new car buyers these days. That suggests that consumers with the lowest incomes who, in theory, need the rebates most, are not benefiting from the program.

One of the problems, Mr. Spinella said, is that even a $4,500 rebate may not be enough to persuade consumers to turn in their cars, particularly if they are unable to borrow from cautious auto dealers.

“Some of the folks who drive a beater all the time are unlikely to get a new car loan,” he said. “That’s one of the problems with the program.”

...I may have missed your analogy at first, but at least I actually know something about this program. It is NOT doing what is intended. It is NOT doing what you so expertly layed out. ...and it is CERTAINLY not within the Constitutional authority of the congress to create and administer such a program.

KRAM1 · August 4, 2009

2. How are either of your solutions working out for Ford right now?

Don't know how Ford would have done without the additional taxpayer funded "bailout scheme"...the administration felt they needed to spend billions more of the taxpayers hard earned money on another hand out program before anyone could find out. How's that "job creation through stimulus money" working out? Oh, I forgot jobs were "saved" that would have been eliminated without the stimulus money from the taxpayers...and the administration knows that how? Merlin had nothing on these guys for "magic and slight of the hand"....

LongJim · August 4, 2009

1. Thank you for the emboldened sentences.

You're welcome. There has to be some levity in these threads.

2. How are either of your solutions working out for Ford right now?

~~Who cares?~~ Well, according to Ford:

"lan Mulally

Thank you, Bill, and good morning. While the second quarter remained very challenging for Ford and the entire auto industry as a result of the continued severe economic headwinds, I am very pleased with the progress we made on our transformational plan.

Consistent with our plan, we remain focused on four areas: aggressively restructuring the business; accelerating the development of new products our customers want and value; strengthening the balance sheet; and working together as one global team.

We made significant strides in each of those areas despite the prolonged and deep downturn. In the second quarter, Ford's pre-tax operating losses were $424 million; an improvement of $609 million from year-ago results, despite sharply lower industry volumes in most regions.

As a result of a large one-time gain associated with the debt reduction actions completed in April, Ford reported net income of about $2.3 billion. We sustained progress on improving our balance sheet in the second quarter.

We completed debt reduction actions totaling $10.1 billion, and we raised $1.6 billion by issuing new common stock. Automotive operating related cash flows in the second quarter were $1 billion, an improvement of $2.7 billion from the first quarter, and improvement of over $6 billion from each of the third and the fourth quarters of 2008.

We also reduced automotive structural costs by another $1.8 billion in the second quarter and remain on track to exceed the $4 billion structural cost reduction target we set at the beginning of this year."

Imagine that. Actually trying to run your business in a responsible manner, instead of going hat in hand to the government. Wait...

Here's the link.

Here's some interesting info on C4C:

Link

FirefightnRick · August 5, 2009

Lawmakers hoped the “cash for clunkers” program, formally known as the Car Allowance Rebate System, would reduce America’s dependence on imported oil. But the early results of the program suggest that may not happen. The vehicles turned in were driven about 6,000 miles a year, he said. If the new vehicles are driven about 12,000 miles a year, the rough annual average, then consumers will actually use more fuel, not less.

Classic!

Rick