Our good friends at The Department of Transportation report the latest C.A.R.S. (Cars Allowance Rebate System) or Cash-for-Clunkers clunker stats as of right . . . now.
Total Vehicles Sold: 16,351
Funded to Date: $68,923,000
Passenger Cars Due for Euthanization: 10,114
Trucks Headed for the Crusher: 6237
Meanwhile, we intercepted this communication from a dealer: “I wish you would let us opt out of the cash for clunkers deal. Three dealers on the conference call stated that they were not fucking with this bullshit. You wouldn’t believe the bullshit involved in this. I don’t see this costing us any significant sales. We will waste more time fucking with this than it will ever be worth. The rebates are in place to subsidize the deal. Collecting our money will be a full time job.”
And to think, a bunch of those are probably decent vehicles or at least have some good parts left. I still say the wrong cars are going to the crusher. Why the hell didn’t this bill have some sort sort of emissions requirement? Basing it on fuel mileage alone is not really attacking the environmental issue.
Because it’s an economic stimulus with a bit greenwashing added. If it was an environmental plan, it would have to be funded for a lot longer.
Interesting about dealers griping. My take would be, either they don’t like not being able to finesss trades (a big money-spinner), or they are worried about leaving a paper trail. Most of the local “hard sell” dealers are really pushing it which means the second might not be it..
Because it’s an economic stimulus with a bit greenwashing added. If it was an environmental plan, it would have to be funded for a lot longer.
Yup, exactly. It is a shot in the arm for the economy.
$68 million spent.
Therefore consumer debt has probably gone up by 1x to 2x that much, depending on the vehicle purchased.
And taxpayer debt has increased $68 million.
This is how “spreading the wealth” works, folks.
You can’t finess much of any out of most of the vehicles that are being clunked regardless. A 200000 mile fifteen year old vehicle is worth maybe $500 to begin with.
The paperwork that dealers have to complete for the program is ridiculous, it is clear the government wants no chance of a scam. I wouldn’t be surprised if the total sold under the program wasn’t two or three times as high as the figure being reported. Many dealers are still chasing down the required documents such as titles, registrations, and proof of insurance Which many customers forget to bring along when they come to buy.
“We’ve actually been doing some cash for clunker deals already,” says Fred Emich IV, general manager of Emich Volkswagen in Denver. Emich says customers came in asking about the program, and he didn’t want to risk losing sales to other dealerships.
Emich was surprised to learn that most of the customers were middle-class folks with good credit ratings — usually thrifty people who kept their cars for a long time.
“I was expecting low-income, poor credit,” says Emich. “It has been the complete opposite.” He says a few of the customers paid cash for their new cars.
http://www.npr.org/templates/story/story.php?storyId=106936163
The credit requirements are still in place. If you have crappy credit, in this economy you’re not going to get a loan now regardless of CFC. What it is doing is getting people with good credit scores and a high savings rate who are scared of spending money to spend. And consumer spending is how you get out of a recession.
Does this mean that if a customer owns / wants to trade a car on the list that the dealer is required by federal law to participate in the program? Man, that would suck.
If a dealer wants to just give a $4500 (or more) allowance out of their own pocket on a ‘clunker’ without going through the hassle of the program, they can’t do it?
Imagine if a ‘clunker’ is in pristine shape with low mileage and it’s worth more than $4500. I guess the dealer can allow more than $4500, but this ‘clunker’ is still going to get the lethal injection and be sent to the scrap yard. Now that’s messed up.
Actually, we can buy the car if we want to. If it’s worth more than $4500, we just run it as a regular trade-in.
Car clunkers outnumber truck clunkers nearly 2-1? What are all these cars being traded in? I know for a fact that virtually all Ford Panther cars since 92 are not eligible. I have to wonder if every registered Roadmaster and Cad Fleetwood/Brougham is being turned in under this program to get these kind of numbers.
After being completely against this whole thing, I decided ‘why not get something out of this’; maybe a nice 3-4K plus incentives & ultra low loan rate!
I contacted a local Mazda dealer to see how much my 12-year-old Dodge Neon sedan would get me toward a Mazda6…. I was informed that (paraphrased) ‘it doesn’t matter how badly the current MPGs are, your car clocks in at 30MPG… no soup for you’, but did you want to buy something anyway?’. I was poised to buy tomorrow afternoon. SOLD!
I don’t blame the dealer obviously. Penalising people with MPG ratings a car got when brand new? did they think of all the jing the dealer would make off me over the term of a loan? Must not want economic recovery they don’t control.
Where’s that ledge?
Having the government take money from person A in order to subsidize person B’s purchase of a new car doesn’t stimulate anything. It’s a zero-sum gain because now person A has less money to spend.
I think the genius who came up with this idea (umm, Keynes?) is the same guy came up with the idea that you can make your sailboat go faster by putting a big fan on the stern.
Cicero, so we should spend less money during an economic contraction? That’s going to bring about a recovery?
Do you realize that makes no sense whatsoever?
@jpcavanaugh:
The 1997 Lincoln Town Car I am taking in tomorrow gets 18 – a Panther chassis.
The program is so complicated it is unreal. The Toyota dealer next door quit the program after today because of all the paperwork, and a Hyundai dealer we trade with got zapped for $3500 so far by delivering cars that ended up not qualifying, and we have our first customer on the clunker program have their money cut to $3500 by the changing EPA numbers. Is it over yet?
When the “clunkers” the taxpayers overpaid for are seen on the streets of Mexicali, then what?
“Clawback”?
Cicero – Obama has said that 95% of the population won’t see a tax increase under his plans, while time will tell if that happens or not, I’m not going to give up hope just yet. In the grand scheme of things, another billion added to our national debt is a drop in the ocean.
Plus, I like C4C because it is a government program I finally benefit from. I have never been on welfare, never used food stamps, never lived in section 8 housing, pay for my own health insurance, and will probably never see a dime of the money I pay into social security. If my taxes are paying for the poor and the current retirees I might as well enjoy the fact that some tax revenue is helping me out now.
NulloModo,
I am with you, but let’s remember roads, schools, state universities,student loans, hospitals, Fire departments, police departments, airports, sewers, parks, garbage pick-up, snow plowing, medicare, and the like are all government programs: we just do not think of them that way.
The foul mouthed dealer quoted above looks like he is in a distinct minority group amongst his peers.
Today’s Wall Street Journal is reporting dealer’s concerns that the program might run out of funding as soon as a month from now thanks to the brisk acceptance of it by customers:
http://online.wsj.com/article/SB124891744373492335.html
“As of Wednesday the agency said it received 22,782 rebate requests totaling $95.9 million, not including administrative costs. Mr. Tyson wouldn’t comment on whether the money will last until Nov. 1.”
Thus nearly 10% of the allocated funds have already been scooped up. Not exactly the “epic failure” some pundits had forecast.
“Chrysler Group LLC said its dealers saw a two-year-high in traffic last weekend, though only some one-third of those who came in for the clunkers program had vehicles that qualified.”
Once people get into a buying mood, many will continue to go through with a deal even if they don’t have a qualifying clunker. Foot traffic is the first order of business for any car dealer.
ruckover – Fair enough, I realize that my taxes pay for a number of things that I actually use, such as roads, national security via our armed forces, domestic security via our police and emergency workers, etc. Garbage and sewer I have to pay the city and the water company for respectively, but I realize that varies by jurisdiction, and I’d personally gladly trade some ‘safety’ for the incredible hassle that flying out of a US airport has become. But, you do make some points.
At the same time there are plenty of Federal programs in place to help everything from first time home buyers to small business owners. No program is going to be applicable to everyone, but when designed well they do help stimulate the economy in some way. Cash for clunkers is giving a boost, however big or small, to the struggling US auto industry, helping the environment to a degree, and in general encouraging a number of people to go out and spend who might not have otherwise, and as that is the only way out of the recession, it’s a win win win in my book.
All of the fuzzy math for the CARS program is by design. The whole point is for the Govt to run it like Medicaid. Make it sound easy for the dealer (physician) to provide the service to the buyer (patient). Then deny 20% of the cars (claims) for no good reason after the sale (medical care). Delay the other 80% of payments endlessly. Force the dealer (physician) to resubmit paperwork over and over again in hope that the dealer (physician) eventually gives up. Once payment is made, intentionally underpay the dealer (physician) and force them to jump through an impossible series of hoops trying to recover the difference. Deny at least 20% of paperwork resubmissions. Keep lowering the fund meter based on claims received rather than payments made so it looks like dealers are being paid money that never leaves the Govt fund. Repeat the cycle over and over until certain deadlines pass and all further claims are denied. Finally, launder the huge remaining fund balance for political favors.
BDB :
July 29th, 2009 at 8:26 pm
Cicero, so we should spend less money during an economic contraction? That’s going to bring about a recovery?
Do you realize that makes no sense whatsoever?
Nope, the “small government” types haven’t figured that one out yet. Perhaps they secretly pine for a barter economy?
So, if the program is flopping, shouldn’t that make the Galt wannabees HAPPY?
My neighbor works at a dealership. He tells me quite a few SUVs have been done on the C4C deal. He says they have to drain the oil, pour an acid solution in the engine, and run it until it seizes. There are lots of restrictions on what happens next to the vehicle, where it goes from there. It cannot even be driven off the lot, the USG owns it at that point.
I’m going to get a piece of this before the money runs out. They won’t soon do this again, after all 150 billion goes to AIG while we get a pittance.
Given the fact that only $1 billion is funding this program, its effects on sales will be minimal – perhaps boosting unit volume by 2% this year.
And although I am completely opposed to it in principle (see above), its effect on the taxpayer will also be minimal.
Oh well, call it a small “shove” to begin to turn the “USS Economy” in the right direction. I’m rooting for it to work.
ruckover:
“NulloModo,
I am with you, but let’s remember roads, schools, state universities,student loans, hospitals, Fire departments, police departments, airports, sewers, parks, garbage pick-up, snow plowing, medicare, and the like are all government programs: we just do not think of them that way.”
No they are not programs, they are services. There is a difference. You should realize this.
Fiscal conservatives, both Democrat and Republican are not opposed to necessary services and never have been. You are clouding the issue.
FreedMike:
“Nope, the “small government” types haven’t figured that one out yet. Perhaps they secretly pine for a barter economy?”
Yes we have. About 30 years ago. You stimulate economic investment and expansion for long term economic health. Programs that stimulate short demand are like those energy drinks. You go great guns for about 3-5 hours then you crash. I guess if it get’s them to election day it’s worked.
I’m also opposed to this program on principal. I have an ’89 Ford Club Wagon van, 5.0 V8, w/ 113,000 miles on it (some of it pretty hard miles towing a small livestock trailer, otherwise in good shape) that we no longer use and an ’03 Toyota Matrix with 166,000 (also in good shape). We absolutely need to have a reliable vehicle to get to work and back… 2 hr. round trip daily.
We are going to clunker the van and trade the Matrix for a small SUV. Stupidity in the program: the van is a category 2 truck, 14 combined mpg… if I clunker it for an ’09 Matrix AWD (around 28 mpg) President O gives me $3,500. If I buy a small SUV (RAV4, CRV, Forester, etc. 24-27 mpg range) which is a category 1 truck, I get $4,500. No brainer here folks what I’m getting. I replace an aging daily driver and get rid of a driveway queen. Win!
Like some of you I’ve paid my taxes, some years a whole lot, so I’m gonna get my piece of this pie while the dough is still there. I’m concerned the state DMV will be slow in getting the registration documentation if I need it and I’m sure the dealers are going to want to be firm on prices and availability will be less as this thing gets rolling (understand there are NO VW TDIs in Oh or Michigan now). Good thing is we have lots of brands to choose from in a major metro area with lots of dealers. Wish me luck!
rudiger:
“Imagine if a ‘clunker’ is in pristine shape with low mileage and it’s worth more than $4500. I guess the dealer can allow more than $4500, but this ‘clunker’ is still going to get the lethal injection and be sent to the scrap yard. Now that’s messed up.”
No, no, and no. Only a complete moron (both dealer and customer) would do that. Dealers make money on trades by re-selling or auctioning them for a price close to what they give the customer. Occasionally they’ll take a big hit to move a new car, but they can’t do that much and stay in business.
There may be some weird calculus where a dealer will “overpay” for a trade, get his guaranteed $4500 from the govt, and take a hit on the difference just to make the sale. But if the car is worth $4501 at auction, given all the grief a dealer has to go through to clunker it, he’s probably going to auction it.
This program will not in any way result in valuable, “pristine” classic or collectible cars being scrapped. So let’s just stop talking about that, OK?
I still don’t get it. You’re taking a segment of the population who are either 1) frugal or 2) don’t have lots of cash to spend.
Let’s assume #2 is the majority of people who would take advantage of this program. Now assume that they also don’t have 700+ FICO scores. You dangle an incentive in front of them to get them to buy a car. It “stimulates” the economy. It also straps that person to a monthly car payment at 6%+ interest.
A goverment may be able to spend their way out of debt, because they can manufacture ways to push expenses out 10,20,30 years. People cannot spend their way out of debt. Encouraging them to spend what they don’t have is what got us into this mess to begin with.
Cicero, so we should spend less money during an economic contraction? That’s going to bring about a recovery?
Do you realize that makes no sense whatsoever?
I know I realize it makes no sense, so you go ahead and spend your own money and I’ll go ahead and spend my own money. Deal?
No they are not programs, they are services. There is a difference. You should realize this.
Fiscal conservatives, both Democrat and Republican are not opposed to necessary services and never have been. You are clouding the issue.
There is no difference. Just because some people can’t see the upside of some kinds of programs is deficiency on their part.
Pay for roads you get transportation stimulus.
Pay for C4C you get economic stimulus.
—
Yes we have. About 30 years ago. You stimulate economic investment and expansion for long term economic health.
Most “conservatives” have no clue what volker did, similar to most things.