Cash For Clunkers: Federal Rebate Revs Up Buyers

GreenMachine · September 15, 2009

You too my small post and ran with it.. ignoring what I said.
700k vehicles were sold. Who sold them? Oh, people sold them. Did those people do it for free? No, they made commission. So, they pay federal taxes on their income? ... Yep, that is what I said. 700k additional cars sold does pay back the government some money.
You are right about the "created or saved" statement. I read it as created. I do think you can measure saved jobs though. My company said last Feb that they would shed 4500 positions by the end of Q4. If there was some fire sale and generated business, and they didn't can those 4500.. I would say they were saved. Just my take. Certainly, as with all stats, they are bended and twisted for both sides.

a lot of times when a number is given, in this case 4500 positions, it also include open hiring reqs. I know last year we were going to let go almost 10K but really only rif'ed 2K and closed 8K open hiring reqs.

UNTFan23 · September 15, 2009

a lot of times when a number is given, in this case 4500 positions, it also include open hiring reqs. I know last year we were going to let go almost 10K but really only rif'ed 2K and closed 8K open hiring reqs.

I'm my company's case, the 800 jobs lost were 800 actual jobs. We saw the open reqs suddenly disappear around the holidays (we had been hiring at a clip of about 100 per quarter in my division) and then the rumors started flying. In my area alone we saw about 18 people cut (out of 110) and 4 on my team (out of 20).

yyz28 · September 15, 2009

What about this do you not get? The 3 Billion has already been repaid and by that try about 10x over! This was a huge success and the treasury has already reaped benefits from all the outshoot taxes generated from the program. The economy works when money is being spent and changes hands. Oh by the way no one mentioned all the economic activity that lenders received. 700,000 cars x $25000 per car...there is a lender making commision in there. And guess what the program is over and guess what is worked now move on with your life and admit that some programs do exceed expectations. It was no big deal. 3 billion. The War on terror cost about 1 trillion. And guess what the War on Terror does stimulate the economy as well until it lasts too long.

The difference between you and I is that I can acutally back up my conclusion with facts. Lenders make less comission than the sales people do, so that doesn't hold any water, and financial people in the dealerships don't make a comission on deals financed through the auto companies. ...so that's a fail. How do you figure the 3 billion has been repaid 10X over. I'm looking for numbers... ACTUAL FACTS to back up your claims.

...the sign of someone who has lost an argument is when they whip a straw man that has NOTHING to do with the debate, in this case the war on terror, in an effort to show comparison where there is none.

Saying that something is a success doesn't make it so. The facts have to back up that claim. In this case the FACTS do not back up this claim. Even publications like the New York Times have run pieces on how this program failed to meet any of the measurable benchmarks set when the program was started.

3 billion IS a big deal. 3 billion is a LOT of money.

Eagle1855 · September 15, 2009

and financial people in the dealerships don't make a comission on deals financed through the auto companies. ...so that's a fail.

As I'm sure you know, FM's make money based on how much they make 'per copy', which is how much over the cost of the car they add to the final bill, which includes warranties, interest, aftermarket parts, etc- all of which are easier to sell when you're cutting 8k off the price of the car. Which is how my friend made 20k last month, thanks in part to the business brought in with the clunker deal.

forevereagle · September 15, 2009

As I'm sure you know, FM's make money based on how much they make 'per copy', which is how much over the cost of the car they add to the final bill, which includes warranties, interest, aftermarket parts, etc- all of which are easier to sell when you're cutting 8k off the price of the car. Which is how my friend made 20k last month, thanks in part to the business brought in with the clunker deal.

No, the program had no benefits. Stop countering and only speak about how bad it was.

yyz28 · September 15, 2009

As I'm sure you know, FM's make money based on how much they make 'per copy', which is how much over the cost of the car they add to the final bill, which includes warranties, interest, aftermarket parts, etc- all of which are easier to sell when you're cutting 8k off the price of the car. Which is how my friend made 20k last month, thanks in part to the business brought in with the clunker deal.

I do know that's how it works, but 20K isn't an average. That's 5% comission (which is common on that type of sale in the auto industry) on 400,000 in add-on sales. ...or 10% on 200,000 in ADD ON sales. Not in car sales, but in ADD ON sales. Think about that for a moment, and then come back and tell me if you think that is realistic. Let's say that the comission rate is 10% on those add ons, and then let's assume the addons are 10% of the cost of each car. (3000 in add ons for a 30000 car)

...Now, lets assume your friend's base salary is $60,000 per month. It isn't, if he's a finance guy at a car dealer, but let's just say it is, and take 5K off the top. So now we have to account for 15K that he made. that means that your "friend" was responsible for selling (at the 10% comission level) $150,000 in add on product. That means he ran the financing and addons on 1.65 million dollars worth of product. Or, if we're still going with the 30,000 per unit number, 55 cars in a month. Figure that he works 6 days a week, that's 2.2 cars run through with a perfect record of getting 10% add on sales on 2.2 cars per work day in the month of August. That's a LOOOOOOOOOOOOOOOOOT of paperwork. ...but now let's say it's true.

...and let's say that 700,000 cars were sold at 30,000 per unit. ...and now lets say that every finance guy was as badass as your buddy and had a perfect record selling 10% addons and made 10% comission on his/her sales. Tha'ts $210 Million dollars in comission. Taxed at 25%, which is $52 Million in Federal Tax Revenue off of the finance people. Add that with the $262 Million and were up to $310 million in new tax reveunes to the Treasury for a program that cost tax payers $3 billion. Barely 10% return on the investment.

...the math doesn't lie, folks. I'm not saying several people didn't make out like bandits. ...but the general population didn't benefit from this program, it didn't meet its stated goals (this is a fact, it can't be disputed using ANY factual information) and absolutely cost more than it brought back into the treasury. ...Had the program met its stated goals but still was a net loss in terms of dollars, I might not agree with it, but I'd at least admit that "I didn't agree with the program, but it did what they said it would do." ...but that's not that happened. The American Tax Payer should not have their money spent to the benefit of a single industry.

Your friend enjoyed a taxpayer funded winfall. Good for him, and he has nothing to be ashamed of - he did his job. ...but his awesome month isn't worth 3 billion dollars of taxpayer money.

forevereagle, don't put words in my mouth. I didn't say there weren't benefits. I didn't say that lots of folks made lots of money as a result of the program. What I'm saying is that it wasn't worth the cost to the rank and file individual who's out here busting his ass to make ends meet and being taxed to death to provide a winfall for a very few, that will have very little to zero effect on the economy. During the month that this program was going on and all of this awesome economic activity was going on that eeally and other keep talking about, 270,000 more people lost their jobs.

Eagle1855 · September 15, 2009

Im not sure what I did to receive your overly dickish tone. I didn't say it was an average, I said it was due to the fact that they had a spike in business because of the program. I also never said it was good for America, I merely said it was good for a friend (or buddy, as you put it). And they DO make money on the back end from financing, I don't know where you're coming up with this "FMs dont make money from financed deals". They make no money on the back end of cash deals, but they most certainly make money on deals they finance. This guy may be a GSM. I don't remember. I had several other friends in Houston that worked in the industry that absolutely were FMs, however, and it was not uncommon for them to have 10k months (which I realize is "outlandish" and "absurd"). I would assume they experienced a similar uptick thanks to the program.

Anyways, I'm 100% bored of this conversation and the related math. Clearly you're an expert and clearly I am the beneficiary of only part of the full story or, truth.

Edited September 15, 2009 by Eagle1855

BeanCounterGrad'03 · September 15, 2009

Anyways, I'm 100% bored of this conversation and the related math. Clearly you're an expert and clearly I am the beneficiary of only part of the full story or, truth.

socialist

eeally · September 15, 2009

I do know that's how it works, but 20K isn't an average. That's 5% comission (which is common on that type of sale in the auto industry) on 400,000 in add-on sales. ...or 10% on 200,000 in ADD ON sales. Not in car sales, but in ADD ON sales. Think about that for a moment, and then come back and tell me if you think that is realistic. Let's say that the comission rate is 10% on those add ons, and then let's assume the addons are 10% of the cost of each car. (3000 in add ons for a 30000 car)
...Now, lets assume your friend's base salary is $60,000 per month. It isn't, if he's a finance guy at a car dealer, but let's just say it is, and take 5K off the top. So now we have to account for 15K that he made. that means that your "friend" was responsible for selling (at the 10% comission level) $150,000 in add on product. That means he ran the financing and addons on 1.65 million dollars worth of product. Or, if we're still going with the 30,000 per unit number, 55 cars in a month. Figure that he works 6 days a week, that's 2.2 cars run through with a perfect record of getting 10% add on sales on 2.2 cars per work day in the month of August. That's a LOOOOOOOOOOOOOOOOOT of paperwork. ...but now let's say it's true.
...and let's say that 700,000 cars were sold at 30,000 per unit. ...and now lets say that every finance guy was as badass as your buddy and had a perfect record selling 10% addons and made 10% comission on his/her sales. Tha'ts $210 Million dollars in comission. Taxed at 25%, which is $52 Million in Federal Tax Revenue off of the finance people. Add that with the $262 Million and were up to $310 million in new tax reveunes to the Treasury for a program that cost tax payers $3 billion. Barely 10% return on the investment.
...the math doesn't lie, folks. I'm not saying several people didn't make out like bandits. ...but the general population didn't benefit from this program, it didn't meet its stated goals (this is a fact, it can't be disputed using ANY factual information) and absolutely cost more than it brought back into the treasury. ...Had the program met its stated goals but still was a net loss in terms of dollars, I might not agree with it, but I'd at least admit that "I didn't agree with the program, but it did what they said it would do." ...but that's not that happened. The American Tax Payer should not have their money spent to the benefit of a single industry.
Your friend enjoyed a taxpayer funded winfall. Good for him, and he has nothing to be ashamed of - he did his job. ...but his awesome month isn't worth 3 billion dollars of taxpayer money.
forevereagle, don't put words in my mouth. I didn't say there weren't benefits. I didn't say that lots of folks made lots of money as a result of the program. What I'm saying is that it wasn't worth the cost to the rank and file individual who's out here busting his ass to make ends meet and being taxed to death to provide a winfall for a very few, that will have very little to zero effect on the economy. During the month that this program was going on and all of this awesome economic activity was going on that eeally and other keep talking about, 270,000 more people lost their jobs.

Ok, what would you do to improve the economy? How would you save 270,000 jobs? Let's hear the great plan? By the way AIG paid 6 billion in bonuses last year. Maybe they could have paid for the Cash for Clunkers program.

hickoryhouse · September 16, 2009

...the math doesn't lie, folks. I'm not saying several people didn't make out like bandits. ...but the general population didn't benefit from this program, it didn't meet its stated goals (this is a fact, it can't be disputed using ANY factual information) and absolutely cost more than it brought back into the treasury. ...Had the program met its stated goals but still was a net loss in terms of dollars, I might not agree with it, but I'd at least admit that "I didn't agree with the program, but it did what they said it would do." ...but that's not that happened. The American Tax Payer should not have their money spent to the benefit of a single industry.

Not that I am aproving of this thread, but since you have brought it up so many times and I am to lazy to look it up, what are the "stated goals of this program"?

UNTBill · September 16, 2009

Ok, what would you do to improve the economy? How would you save 270,000 jobs? Let's hear the great plan? By the way AIG paid 6 billion in bonuses last year. Maybe they could have paid for the Cash for Clunkers program.

So saving (270,000) jobs is now a benchmark for an improved economy. How do you measure that?? Sounds like the status quo to me.

What ever happened to an economy that created jobs. An administration that saves jobs, WOW sounds like think speak to me.

Edited September 16, 2009 by UNTBill

Censored by Laurie · September 16, 2009

socialist

No joke...the dude is even censoring my facebook comments.

You know who would never censor a facebook comment? Ronald Reagan, thats who.

Eagle1855 · September 16, 2009

No joke...the dude is even censoring my facebook comments.
You know who would never censor a facebook comment? Ronald Reagan, thats who.

I'm fairly certain YOU removed that one, not I, good sir.

yyz28 · September 16, 2009

Im not sure what I did to receive your overly dickish tone. I didn't say it was an average, I said it was due to the fact that they had a spike in business because of the program. I also never said it was good for America, I merely said it was good for a friend (or buddy, as you put it). And they DO make money on the back end from financing, I don't know where you're coming up with this "FMs dont make money from financed deals". They make no money on the back end of cash deals, but they most certainly make money on deals they finance. This guy may be a GSM. I don't remember. I had several other friends in Houston that worked in the industry that absolutely were FMs, however, and it was not uncommon for them to have 10k months (which I realize is "outlandish" and "absurd"). I would assume they experienced a similar uptick thanks to the program.
Anyways, I'm 100% bored of this conversation and the related math. Clearly you're an expert and clearly I am the beneficiary of only part of the full story or, truth.

Eagle,

I am simply debating a policy, I'm not trying to make this personal. I'm just showing another side to the story. I didn't mean to come off as dickish, and I certainly don't have any beef with you personally. As always, we're on this forum for a common reason.

FM's make a comission on addons and points, but the comission made on a financial deal (less any addons) going through the manufactur's credit agancey (GMAC, Ford Credit, etc) is a pittance. Certainly not the 10% I threw out there to come up with the number to have as an example.

I don't claim to be an expert, though I am familliar with this particular business, and I certainly never claimed you supported this program as good for America. The overall crux of this thread, however, is "was it worth it" and the math, as boring as it may be, doesn't seem to add up. The financial math doesn't add up. The fuel savings math doesn't add up. The "carbon footprint reduction" doesn't add up, none of it adds up.

I enjoy the debate, and I hope we can spar again in the future.

Eagle1855 · September 16, 2009

Eagle,
I am simply debating a policy, I'm not trying to make this personal. I'm just showing another side to the story. I didn't mean to come off as dickish, and I certainly don't have any beef with you personally. As always, we're on this forum for a common reason.
FM's make a comission on addons and points, but the comission made on a financial deal (less any addons) going through the manufactur's credit agancey (GMAC, Ford Credit, etc) is a pittance. Certainly not the 10% I threw out there to come up with the number to have as an example.
I don't claim to be an expert, though I am familliar with this particular business, and I certainly never claimed you supported this program as good for America. The overall crux of this thread, however, is "was it worth it" and the math, as boring as it may be, doesn't seem to add up. The financial math doesn't add up. The fuel savings math doesn't add up. The "carbon footprint reduction" doesn't add up, none of it adds up.
I enjoy the debate, and I hope we can spar again in the future.

agreed. ALL GOOD here, man.

Is it almost time for tailgating again?

UNT90 · September 16, 2009

As I'm sure you know, FM's make money based on how much they make 'per copy', which is how much over the cost of the car they add to the final bill, which includes warranties, interest, aftermarket parts, etc- all of which are easier to sell when you're cutting 8k off the price of the car. Which is how my friend made 20k last month, thanks in part to the business brought in with the clunker deal.

Surely a car salesman would never lie about how much money he was making.

Cue the Chris-Chris character from the ticket.

FirefightnRick · September 16, 2009

The financial math doesn't add up. The fuel savings math doesn't add up. The "carbon footprint reduction" doesn't add up, none of it adds up.

I suspected there were loopholes in this program as well that circumvented the overall purpose of getting more fuel efficient and cleaner burning vehicles on the road. Have you heard of the "Throw Down Car" or the "Throw away car" routine that was being used? I spoke to an FF from east Texas in which he stated one dealership out that way in particular was using a cheaper, smaller vehicle that a customer could purchase with the "Cash back" voucher, then go back in the financing office and turnaround and apply that amount for the truck they wanted in the first place? They said "there it was, some small, cheaper fuel efficient SUV that just sat there they called the "Throw Down Car" and it never moved". I don't see how that is legal, but they claim it is and that it was just as if you bought the exchange car then changed your mind. They applied the amount they gained towards the second purchase? I'm not saying I agree with this and I find it hard to believe they could legally get away with it as how it was told to me, but it wouldn't surprise me at all if it were true?

Rick