The Department of Transportation (DOT) has fired-up its Cash4Clunkers website. I would have thought the bill’s nickname would have been ideal for the job, but then I’m not a public servant. And so the feds present its brand new website with a new name: CARS (Car Allowance Rebate System). Definitely a case of not leaving well enough alone. To wit: a button on cars.gov asking “How will CARS work”. Apropos of nothing, the site also has a strange FAQ: “I don’t drive an American car but I would like to trade in my old car for a newer, more fuel efficient one. Is this program only for American cars?” Now why would anyone think that? More CARS after the jump.
According to Congressional Budget Office estimates, some 77 million vehicles built between 1990 and 2006 qualify for 250,000 vouchers. Automotive Alliance rep Charles Territo welcomes the program on behalf of his clients, who hope this is only the beginning of the fed’s new car market stimuli. Not to say that Charlie thinks CARS is (are?) idea. “There are lots of way to pick holes in this program,” Territo admitted to TTAC. “But we didn’t want the perfect to be the enemy of the good.” Don’t you just hate it when that happens?
Fortunately, the DOT wants to make sure that the perfidious aren’t the enemy of the good. Automotive News [sub] reports that the feds admit that “its biggest challenge will be devising a fraud prevention program in the next month or so.” Or so? That’s not what I’d call a promising start. It gets better/worse, in that “I just spent four hours at the DMV and all I got was this lousy form” kinda way . . .
Consumers who come into dealerships to swap their vehicles for new, more fuel-efficient cars and trucks while collecting a credit of $3,500 to $4,500 will have to wait while the government verifies that the transaction qualifies under the new law, said Rae Tyson, a spokesman for the National Highway Traffic Safety Administration.
NHTSA doesn’t know yet how long the approval process will take or whether the customer will have to return a second time to the dealer to get confirmation, he said.
By law, the DOT has thirty days to launch the program after the President signs it into existence. Even that’s not going all that smoothly.
Barack Obama has indicated he soon will sign the bill. But in one sign of the confusion about the new legislation, NHTSA posted a new cash-for-guzzlers Web site over the weekend [Note: who told Automotive News they could re-nickname this program?] that stated incorrectly that the president had signed the bill Friday.
“That’s what we were told,” Tyson said . . .
By whom? If this is how CARS starts, could the program collapse under its (their?) own weight, or devolve into widespread fraud? As you know, we here at TTAC always look on the sunny side of life. So, no, that can’t happen. Still, we’re in uncharted waters, filled with what some people call sharks (a.k.a. stealerships). Even the feds seem a bit, well, jumpy about the whole thing.
The government will have to hire dozens of new staff members, recruit contractors and prepare new software to manage dealer applications and government payments, Tyson said.
“NHTSA has never had to administer a program of this size or type,” he said. “It’s a complex undertaking.”
If this isn’t the biggest fraud bait I’ve ever seen, I don’t know what is. They’re in such a hurry to screw over American consumers, they don’t even have enough time to hire the people to properly do it.
From the site:
Does the program apply if I want to lease a vehicle, or must I purchase a vehicle?
Under the program, you may purchase a new vehicle or lease a new vehicle, provided the lease period for the new vehicle is at least five years.
-> Who leases for 5 years?!?
In addition to the credit, will I get the full value of my trade-in vehicle?
No. The law requires your trade-in vehicle to be destroyed. Therefore, the value you negotiate with the dealer for your trade-in vehicle is not likely to exceed its scrap value. The law requires the dealer to disclose to you an estimate of the scrap value of your trade-in vehicle.
-> Destroyed?!? Your trade is automatically consider “scrap”. So in other words your “trade” is worth $200 regardless of its year or condition? This is all kinds of insane.
JMII : So in other words your “trade” is worth $200 regardless of its year or condition? This is all kinds of insane.
Makes perfect sense if you’re the government. Besides, now that our car problems are all solved, I can’t wait for the gov to hop on health care, and see what can be done with that. And while they’re at it, how about the “quick fix” for Social Security, too. Sure feels good to be an American, these days…
In addition to my new hip, will the government pay to have it installed?
No, the government health care program (HiCuP) only covers the cost of artificial limbs, joints, etc. Having the artificial hip installed will be your responsibility.
Reading stuff like this and working within the belly of the beast leads me to believe that I should no longer cite coutries like Canada and Great Britain as examples of some of the problems we will face if we nationalize health care. The reality will be much worse. The worst tale of waiting for cancer treatment, eye surgery, etc. will pale in comparison to what our government can do when they take over this service.
correction to the article “cars.gov” not “cars.org”
-> Destroyed?!? Your trade is automatically consider “scrap”. So in other words your “trade” is worth $200 regardless of its year or condition? This is all kinds of insane.
Yup. If your 95′ Dodge Dakota is on it’s last legs you can get $4500 from the gov’t if you agree to let them crush it and buy a more efficient vehicle. If you sold it private party you’d only get about $2k.
Obviously it doesn’t make sense if you’re trying to unload your ’07 Camry.
It does however mean that your typical $500 “beater” is going to be somewhat rare for a while.
I see a glut of perfectly good functional,vehicles
heading to the scrap yard prematurly.The good news is there will be a flood of good used parts on the market.
Or think of it this way. Your driving around in a ’94 Dakota/Ranger. You could trade it in for a Hyundia Accent CS Automatic for —-
11,777 – 2500 cash back – 4500 cash for clunkers for a total price off the lot of $4,777 for a brand new decently equiped car.
With Hyundia’s 4.39% 60 month financing you’ll be only out $88 a month. With gas prices rising you may even end up spending less per month dirving a new car than you were on the old … depending on how much you drive per month.
Or think of it this way. Your driving around in a ‘94 Dakota/Ranger. You could trade it in for a Hyundia Accent CS Automatic for —-
11,777 – 2500 cash back – 4500 cash for clunkers for a total price off the lot of $4,777 for a brand new decently equiped car.
With Hyundia’s 4.39% 60 month financing you’ll be only out $88 a month. With gas prices rising you may even end up spend less per month dirving a new car than you were on the old … depending on how much you drive per month.
Of course, if you’re driving a ’94 Dakota you are either a bad credit stiff (which is unlikely since stiffs would never be seen in a Dakota, they only drive luxury cars) or you WANT to drive the Dakota, in which case you wouldn’t be happy with the Accent.
…and if by “decently equipped” you mean no air conditioning, radio, power windows and locks, ABS etc… Oh wait, the Dakota probably didn’t have any of that either.
An ’07 Camry wouldn’t qualify anyway as it gets more than 18 mpg, the maximum a “clunker” can achieve in order to qualify for this program.
Anyway, there are obviously a lot of issues with this program.
I do have a serious question, though. Isn’t there still some scrap value to the old junker? If the government gives the person turning it in the $3,500 or $4,500 and the car is then taken to a recycler, does he get it for nothing? Or does the scrap yard pay back the NHTSA for the scrap value to reduce taxpayer expenditures?
I read the the details of the law and apparently it includes a provision in which the dealer is only permitted to keep a maximum of $50 of the estimated scrappage value for themselves in exchange for administrative costs… so there is no incentive for them to charge the recycler anything more than $50 (above the table). Given that the administrative headaches appear to be pretty heinous, this is either a recipe for fraud or a bailout of the automotive dismantling industry.
The law goes on to say that there is nothing to preclude the sale of parts (other than the engine or drivetrain for some reason) or to keep the proceeds of such a sale. It says nothing about the proceeds going back to the government. So, the way I see this, the recycle yard gets to buy the old Dakota for $50 and keep any proceeds from the recycling or sale of parts from the truck. Hmmm, time to buy stock in auto recyling companies?
“if you’re driving a ‘94 Dakota you are either a bad credit stiff”
Well, if Hyundai Motor Credit is loaning you $4,770 on a $10,000 car (the gov’t is essentially offering a $4,500 down payment) I bet that is a risk they are willing to take.
the road to hell has a brand new good intention.
I have a ’92 Dakota that was given to me a few years ago by my father who wasn’t using it. It’s an extra vehicle my wife and I use a few times a month. This is the first truck we’ve ever owned and it’s been very handy to have around. When Cash for clunckers was first being devised we planned to trade it under the program for a Honda Ridgeline. We were also going to sell her 03 Accord and go from 3 cars down to 2. However between the House and the Senate the minimum mileage requirements for a new type 1 truck changed from a minimum of 17 to 18 MPG eliminating all the V6 trucks except the Toyata Tacoma. We like the Taco, but she really likes the Ridgeline. And since it would be her new car the deal is now off and we’ll stay the way we are. We may be the execption here, but I think there are a lot of old pick up truck owners who would have traded in for something new had the mpg restrictions not been 18 mpg for type one trucks.
The law goes on to say that there is nothing to preclude the sale of parts (other than the engine or drivetrain for some reason)
Remember, this is to help decrease our dependence on foriegn oil. We can’t allow those deadly inefficient engines to continue to threaten our nation’s existence. I’m surprised that they are allowing the scrap yards to dismantle the cars at all. That will just allow other “polluting” (CO2 is pollution now) cars of the same type to remain on the road, and we can’t have that.
I see this cash for clunkers screwing me over. I am looking for an old beater truck or SUV, you know something cheap that gets less than 18 mpg. Right about the time I get ready to buy it(I dont really need it until the end of summer) this stupidity is going to get started. All those running potential trucks I could have bought are going to be scrapped, less supply means higher prices for what’s left.
Typical government stupidity that hurts the poor person at the bottom.
I have 1994 Ford F150 which qualifies(15MPG)and is listed as a category 2 truck in the program. Can this vehicle be used to get the rebate on a new SUV or does it have to be another category 2 truck? Not many cat 2 trucks get very good MPG.
Vern
I am a new car dealer, people are asking questions I dont even know how to answer. They need to get the web site up and running. I just read that we might have to have the customers come back????? Are they nuts!!!! So they will have two week to back out of a car deal. We are good to our customers, not too worried about that. But…….. And then the deal with scraping them, we own a junk yard and yes you are right there will be more and more used parts out there cheaper. The problem is there will be a surplus, you know less of these cars on the road. What is the scrap value now, how about $0 the junk yard has to dispose of all liquids, and tires according to federal laws. That costs money and we have to pay a person or two to do that. Certain parts that are valuable have to be crushed with the vehicle according to the law. Junk yards make money over time sometimes it takes years to get money for vehicles. They need to get the dealer website up and running!!!!
Its as ahame that this is the second entry on Google results when you try to get information about this program.
The home page article is so full of bile, anti-government rhetoric and propaganda that you wonder who would write such misinformation.
Oh, that’s right. Republicans.