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Old 06-25-2009, 09:03 PM   #121
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Ford is now onboard with a handy dandy feature that tells you exactly which Ford vehicle your clunker can be traded for--
See ford.com
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Old 06-27-2009, 05:01 AM   #122
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Quote:
Originally Posted by JOHNNIE36 View Post
Think my daughter and SIL are going for this program. He has a 1999 Chevy Silverado 1500 pickup truck. About 100K miles on it. According to the requirements, it would qualify. They were not planning on buying but the other day the truck blew a plug right out of the head. Sounds like big problems. Now, all he has to do it get it running, go down and trade it in on a small fuel efficient car. They had just bought a new GMC diesel pickup so they don't need another truck. I think this program is just what the government ordered in their case.
Just curious does your daughter also have a car.
If so they would exactly fit the profile of who would benefit from the program. Upper middle class families with a an old pickup truck and two other vehicles.
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Old 06-27-2009, 05:07 AM   #123
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When this program was first announced I remembered a somewhat similar program in LA in the 80s/90s. Here is a letter to the editor in the WSJ, from guy who was involved. I remember thinking this was great idea when it happened.

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Your editorial "Cash From Lunkheads" (June 13) doesn't mention it, but those seeking to "bail out" Detroit with the cash-for-clunkers program are misusing a program that was hugely successful 19 years ago. Congress is going about it all wrong.
In 1990, California's South Coast Air Quality Management District (AQMD) proposed to close and ban all oil refineries (more than a dozen) from the Los Angeles basin. Unocal proposed to regulators that we run instead an experimental program of buying and destroying old cars (source of 60% of the pollution in the Los Angeles basin, as opposed to 5% from refineries). We at Unocal knew that the cost effectiveness of our proposal would far outstrip the AQMD's hideously costly and inefficient proposal.
The South Coast Recycled Auto Program (SCRAP) was hugely successful; its goals were clear and its economics powerful. The astounding environmental benefits to Los Angeles resulted in major regulatory and economic benefits to industry at no cost to the taxpayer.
Unocal paid $700 for locally registered, in-use, 20-year old vehicles. SCRAP crushed 8,376 pre-1971 vehicles between June 1 and Sept. 29, 1991. According to California Environmental Protection Agency and AQMD's testing and records, 12.8 million pounds of air pollution (hydrocarbons, carbon monoxide and nitrogen oxides) were removed from Los Angeles's air each year for the next (very conservatively estimated) three-year period. Hydrocarbon emissions from SCRAP vehicles were 99 times greater than from a then-new 1990 vehicle, and about 200 or more times greater than new cars today, nearly three times the pollution that Cal/EPA and the AQMD had projected. Even those figures are understated; they include tailpipe emissions only. Carbon monoxide emissions were more than 50 times greater.
We were not allowed to count CO2 emissions because at the time they were not "pollutants" (and greenhouse gas emissions were unheard of). The EPA, Cal/EPA and the AQMD changed the rules to allow mobile source credits against stationary source emissions.
Forty-six percent of the principal drivers bought another vehicle, 42% were using another vehicle, 4% were getting rides and 4% were using public transportation. Of the replacement vehicles, more than 80% were newer (1975 or later), less polluting cars. If you consider the last point, the seller of those replacement cars typically bought a replacement (newer vehicle), and so on; the average set of transactions is 4 to 8 purchases from that first 20-plus-year-old car to a new one.
So an updated SCRAP could eliminate much argument for a cap-and-trade system with all its government participation, and all "need" for taxpayer bailouts. It would result in cleaner air, more efficient vehicles on the road. It would help clean up greenhouse gases, and would help Detroit sell more cars.
It would do all that without a massive federal handout and more government interference, so Congress won't give it much thought. It should; we all should. It's the kind of approach that would be cost-effective, and that would eliminate a half-baked series of bailouts and cap-and-trade schemes.
John L. Rafuse
Alexandria, Va.
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Old 06-27-2009, 08:13 AM   #124
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Originally Posted by clifp View Post
Just curious does your daughter also have a car.
If so they would exactly fit the profile of who would benefit from the program. Upper middle class families with a an old pickup truck and two other vehicles.
Yes, she also has a Pontiac Vibe which her son drives most of the time. SIL drives the new GMC and she was tooling around in the Chevy truck when the plug blew out. Since #1 grandson goes to college, he is driving the Vibe so she is without a vehicle most times. Going to see her this morning for coffee and will find out about their plans. Still making payments on the Vibe and now the GMC and don't think they can afford another payment.
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Old 06-27-2009, 08:35 AM   #125
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Quote:
Originally Posted by JOHNNIE36 View Post
They had just bought a new GMC diesel pickup so they don't need another truck. I think this program is just what the government ordered in their case.
Quote:
Originally Posted by clifp View Post
Just curious does your daughter also have a car.
If so they would exactly fit the profile of who would benefit from the program. Upper middle class families with a an old pickup truck and two other vehicles.
clifp, you are right, that the JOHNNIE36 family might be able to benefit form the program, but I fail to see how the general public benefits (not a slight against the JOHNNIE family at all - they are playing the game by the rules as intended, the stupid legislation is my target). After all, they already replaced the truck with a truck, so the $ rebate they get really isn't motivating them to replace the truck with something more efficient, it is (we taxpayers are) subsidizing the new car they would be buying anyhow. Just bad, bad legislation.

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Originally Posted by clifp View Post
When this program was first announced I remembered a somewhat similar program in LA in the 80s/90s. Here is a letter to the editor in the WSJ, from guy who was involved. I remember thinking this was great idea when it happened.
Well, the big diff in that program, as stated in that letter, is that they were replacing pre-1971 vehicles, and EPA regs had tightened up a lot since then (~ 100~200x cleaner according to the writer). So environmental-wise, the math might indeed work in that situation. This new law targets much newer vehicles, and the differences simply are not that great.

Some great/sad comments from the WSJ article:

RE: the scrapping of a working vehicle: By the same logic, we could revive the housing market by paying everyone to burn down their houses to collect the insurance money and build new ones.

and... : According to Richard Filley, executive director of the GreenCARR Foundation, "The environmental costs of new parts manufacturing are far higher than the use of 'green' parts which are reused." Poor Mr. Filley doesn't understand that he is operating in the land of green gesture politics, where what matters is how a policy looks, not whether it actually helps the environment.

They also bring up the point I think I made earlier, that this will hurt poor people by raising the price of used vehicles - they also mention that from the used parts viewpoint, which I didn't think of (although I guess you can salvage some non-engine parts?).

and... : For most consumers, the subsidy won't make a major difference in their purchasing decision on a new car, either because they don't have a trade-in or because a new car is still out of reach even with the voucher.

I know some people in this exact situation. They have two cars which qualify (sold one a few months ago and are borrowing one from a family member) - but they cannot afford a new car, so this legislation won't help get those cars off the road. So not only is the law of dubious benefit, it doesn't even function well at executing its bone-headed intentions.

Quote:
Under the House version sponsored by Ohio Democrat Betty Sutton,
well, at least we know who to blame. I'm going to do some more reading on this later.


My real concern is that I do think we need some govt involvement in health care - but I'm afraid that this is the kind of "help" the govt will trot out. After all, in Congress "what matters is how a policy looks, not whether it actually helps".

We are doomed.


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Old 06-27-2009, 12:47 PM   #126
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The basic premise is right on. But the math doesn't necessarily add up to the extent they claim. They say it doesn't necessarily make sense financially to trade in a gas hog and buy a new car, but it might actually be close to break even financially. Take an old 1980's beater that barely runs with a trade in value equal to it's scrap value. It's out of tune and gets 13 mpg. You drive an average of 1,000 miles a month. The replacement car you buy gets 30 mpg. If your new car can be obtained for $11,000 after the $4500 credit (and there are plenty of domestic and foreign alternatives available at this price and in this economy), then you are looking at car payments of $200 a month for 5 years at 4% interest. You are saving $113 a month in fuel expenses, plus paying $200 more on the loan, plus a little more for insurance and property taxes. But you will avoid a lot of maintenance expenses on your new car. And after five years, you have a five year old car you own free and clear with much lower operating costs than your old gas hog clunker.

So unless you are absolutely destitute or need the large amounts of space that many clunkers provide, you may be better off long term by buying a new car.
I know people with junky old clunker who owe on the vehicles. They bought them used and are either paying the seller payments or their credit union. Won't help them a lot either.
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Old 06-27-2009, 01:44 PM   #127
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I know people with junky old clunker who owe on the vehicles. They bought them used and are either paying the seller payments or their credit union. Won't help them a lot either.
They would fall in the "destitute" class of people!

This bill only helps the middle class folks who have enough cash or good enough credit (and income) to qualify to buy a new car. I think the primary intent is to prop up failing domestic auto companies, not help the economy overall or help the environment.
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Old 06-28-2009, 03:28 AM   #128
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One of the things that I find interesting is the truck provisions....

I got an old car I can trade in....

I can go buy an Accord or Camry... and get $3,500...

OR, I can go buy a RAV4 or CRV and get $4,500...
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Old 07-15-2009, 10:26 PM   #129
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I keep thinking about these two earlier posts, so I ran some numbers:

Originally Posted by Texas Proud
Cash For Clunkers

Originally Posted by FUEGO
Cash For Clunkers

FUEGO gave some examples where the costs might fall in a rough range of $4 to over $30 per gallon saved, Texas Proud mentioned (paraphrasing) that it's really a stimulus bill with mpg talk for some fog. So, can we put a cost to the stimulus portion? Let's look at jobs "saved":

I found a few links that gave a range of ~ 32-35 hours of labor in each vehicle for the D3. That appears to be internal to the car company, I don't think it includes the labor in the suppliers of components, but let's start there.

ISA | Plant efficiency leader in North America: Toyota


Let's use the middle of the $3,500 and $4,500 cash payment. Let's round the production hours up to 40 hours to be generous and assume a worker works 48 weeks per year. So it would take 48 cars cashed in to represent one "job for a year". And 48 * $4,000 = $192,000.

$192,000 to preserve a job for a year? And even that understates it, I think. That person would have bought a car eventually, so we paid $192,000 to move up the demand for a job by a few years.... maybe. And of course, loose it again a few years later. It is a shift, not a job "saved".

$192,000? Is that a reasonable cost/benefit ratio? Is $4-$30 to save a gallon of gas really the best we could do?

And these are the same people that are going to contain costs on health care?


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Old 07-16-2009, 09:11 AM   #130
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$192,000 to preserve a job for a year? And even that understates it, I think. That person would have bought a car eventually, so we paid $192,000 to move up the demand for a job by a few years.... maybe. And of course, loose it again a few years later. It is a shift, not a job "saved".

I would say that this is a better spend than the $700 plus billion stimulus package... this one requires that something is being purchased by someone other than the gvmt.... yes, they participate, but the other package is 100% gvmt spending...

I doubt very seriously that there are only 40 hours of labor to build a car when you do take into account all the parts being manufactored... and the overhead (accounting, design, etc... the truck driver to get it to the dealership... and the dealerships employees)...

I will probably participate.... but even if I did not, I like this better than bridge building and road construction that is not needed...
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