Here’s an excerpt from the CARS.GOV website, spotted by one our eagle-eyed readers:
Do I get any money for my trade in vehicle in addition to the CARS credit?
YES. The law requires your trade-in vehicle be destroyed. The dealer must disclose to you the scrap value of your vehicle. The dealer is entitled to keep up to $50 of the scrap value for administrative fees. You are entitled to negotiate about who keeps the remaining scrap value. For example, you may use that money toward the price of your new car separate from the CARS credit.
How many customers received this federally-mandate disclosure from their dealer? Not many, I’d wager. TTAC writer and used car guru Steve Lang reckons the average clunker was worth between $300 and $350 in scrap. So let’s call it $250 per car. Multiply that by the estimated 700,000 crushed clunkers and you’re looking at some $175,000,000 that may have been left on the table. Oops! Our tipster reckons that money should have gone back to taxpayers, anyway. I reckon he’s right.
I am not at all sure that the scrap value is modest. Given the pace at which old cars have disappeared around here, regardless of how accessible (or not) they were, they must be worth something worthwhile. Where the hell is Stephen Lang, he should know.
Also, what if as an owner you put some new tires or so on, and then the cash for clunkers came along and you decided to trash it? The dealer is going to reuse them (for sure) so why shouldn’t the customer be entitled to a couple hundred bucks extra off their purchase?
You’re expecting competency from a government-run program?
Uhhmn, what d’you expect a buncha liberal arts grads cum bureaucrats to know about junkin’ cars?
Far be it from me to defend the gummint, but, I think yer reachin’ this time.
What is the scrap metal value of a $4500 clunker, especially after transport to the wreckers? $10? $20? $50 tops??? Let the dealers have a BBQ and a beer from the scrap metal social fund.
I’m not going to defend the program, which had three or four different conflicting goals and spent a few billion not accomplishing any of them terribly effectively. But given that one of those goals was to stimulate transactions and another to pump money into the dealerships (and thence into the rest of the industry), it actually makes sense for the scrappage money to go to the consumer (as an incentive) or the dealer (as a stimulus).
If the concern was that the government not waste money, then simply not passing the bill would have been a far simpler option. Trying to recapture the scrap value would have just generated (still more) overhead to get back a small fraction of the outlay, while further degrading the presumed point.
The program was flawed from the start.Good enough idea but it was thrown together way to fast and too narrow a focus. Any 6th grade class project team would have ask the question, “Where’s the scrap, $?”
I’m assuming that some NADA lobbyist probably knew about this (or pushed for this loophole) before C4C became law.
This is what lobbyists are paid to do– collect nickels and dimes from the bowels of legislation.
“Do I get any money for my trade in vehicle in addition to the CARS credit?”
I don’t understand this. “Trade in” value is the amount the dealer is willing to give you for a car, not some hard number of its worth. Surely most dealers will say C4C vehicles have zero value even if they get some money for scrap.
I too am curious as to the location of the “pretzel moneys.”
But I’m not as worried about the government not claiming it… they threw it out with the law they wrote.
I want to know how many people actually got the additional $250 off of their car purchase. For some reason, I suspect that many (most, possibly all) dealers kept quiet on that kickback and pocketed the additional money.
Imagine a corrupt clueless moron. Then imagine a Congressperson. Is there a difference? I fail to see it.
Scrapping 700,000 perfectly good cars disproportionally hurts the working poor, who can only afford this kind and price range of vehicle.
Scrapping them also destroys, conservatively at $3,000 per vehicle, $2,100,000,000.00 of PROPERTY…
Also, remember the tale of the hoodlum (rumor is he is a US Senator from the Northeast) who broke a $250 baker’s window. SOme morons were happy that the glass people will have an extra $250 of business. OF course, thhe morons forgot that the Baker could have spent that $250 to buy a new suit, to go out 3 times for dinner with the wife, or otherwise, all equally stimulative to the economy! NOW he has to find the stupid $250 to pay for the unnecessarily broken glass.
As far as that goes, they did address the issue of scrap value: the law “require[s] dealers to disclose to the person trading in an eligible trade-in vehicle the best estimate of the scrappage value of such vehicle and to permit the dealer to retain $50 of any amounts paid to the dealer for scrappage of the automobile as payment for any administrative costs to the dealer associated with participation in the Program;”
When we did our C4C deal near the end of July, I read that as saying that the consumer got the scrap value minus $50– not a negotiating ploy; it honestly didn’t occur to me that it would mean anything else– and the dealer didn’t contest that reading. (I’m pretty sure the FAQ above hadn’t gone up yet.)
On the other hand, I trusted the dealer’s scrappage estimate, so it’s certainly possible that they wound up getting a different number than they gave me. (Given the chaos during that first week after the regs were handed down, I’d give even odds that they were working from a very rough estimate themselves.)
And this, the scrap mess, is perhaps the tenth thing that is terrible about the stupid, thoughtless CFC program, with 9 other things that are far more egregious blunders!
Once there was a total retard, he did poorly in school, got thrown out of college for cheating on his exams. He is currently the US Senator from (insert your favorite state)
I was given $250 for scrap on my 540, all-aluminum engine and all.
If I’d trucked the heap to the scrapyard myself, I would’ve gotten $180. Lang needs to check his numbers. $350 wouldn’t happen (not in my Connecticut neck of the woods anyway).
But guess what: who cares? I already got an extra $2k for my car than I would have seen selling it myself. I’d estimate the percentage of CFC participants that fall into my way of thinking at, say, 99.999999%.
How many customers received this federally-mandate disclosure from their dealer?
Probably all of them. A better question may be how many people bothered to read it and/or care.
“Scrapping 700,000 perfectly good cars disproportionally hurts the working poor, who can only afford this kind and price range of vehicle.”
“Scrapping them also destroys, conservatively at $3,000 per vehicle . . .”
Yes, truly, these were all “perfectly good cars,” just the sort of cars that would have served the working poor especially well. And I know this because they were worth, on average, 3,000 dollars.
Please, hate the program all you want, but don’t just make stuff up.
Actually, the problem with CFC was that customers on average (who utilized CFC) were paying very close to the same transaction amount as before the CFC program. Customers who could not utilize CFC were paying much more versus the period before CFC.
So if net transaction amount is only slightly changed, guess where all that extra margin went to. Someone’s getting some fat bonuses for doing such a stellar job taking advantage of a government gift and turning it in their favor. The scrap dollars (after salvage parts were sold off) is peanuts.
Never mind…
If you do not buy my estimates, PROVIDE YOURS. Crticising my job is EASY, but DOING the job is not.
And this is only one of the TEN things that were terribly WRONG with the STUPID program. The worst of its kind in the entire world.
All those 1970s platform disco shoes which we all paid top dollar for are still worth $50 ea (gotta be – I say so). That’s millions $$$$ of PROPERTY just absolutely wasted, especially if unloved in the cupboard.
Seriously, is no-one familiar with the accounting concepts of “write-off” or “depreciation” these days???????
@ dingram01
Precisely.
Auction and COllector Lobbyists convinced the idiots in Congress to exclude pre-1984 vehicles from the CFC program, I believe.
“Also, what if as an owner you put some new tires or so on, and then the cash for clunkers came along and you decided to trash it? The dealer is going to reuse them (for sure) so why shouldn’t the customer be entitled to a couple hundred bucks extra off their purchase?”
If you left new tires on you C4C, knowing that it is going to the junkyard, then you are a moron.
A “friend” of mine took his car in for C4C and it didn’t have a radio, speakers or the air bags.
$80, after towing, was the top scrap price (from four calls) a co-worker in Chicago was offered for his 1994 BMW 525i. (No it doesn’t go or is it insured, so he couldn’t C4C it).