Cash For Clunkers

[Ronstar]

i have my Jeep Wrangler ready to go,but I want to trade it on a 4x4 Ford Pickup. We'll see how this goes.

[ERD50]

Man is this twisted

I reflected on this while eating my oatmeal, skim milk, almonds and fruit for breakfast.

The next step is that the govt decides that more people should be eating healthy breakfasts. So, if you have been eating junk, or skipping breakfast, you will get a voucher to have a personal chef come in and prepare a wonderful healthy meal to encourage you to eat right.

But, if like me, you already were eating right (or driving a reasonably high mpg car), you get nothing.

That seems to be the direction this is taking.

-ERD50

edit/add - I just realized that might be taken the wrong way - I have NO issue with people deciding to take advantage of the offer. You play the game according to the rules (which is the intent of the offer). My problem is with it being offered.

[Texas Proud]

Quote:

Originally Posted by ERD50 Man is this twisted I reflected on this while eating my oatmeal, skim milk, almonds and fruit for breakfast. The next step is that the govt decides that more people should be eating healthy breakfasts. So, if you have been eating junk, or skipping breakfast, you will get a voucher to have a personal chef come in and prepare a wonderful healthy meal to encourage you to eat right. But, if like me, you already were eating right (or driving a reasonably high mpg car), you get nothing. That seems to be the direction this is taking. -ERD50 edit/add - I just realized that might be taken the wrong way - I have NO issue with people deciding to take advantage of the offer. You play the game according to the rules (which is the intent of the offer). My problem is with it being offered.

Hey.... it is just some advertising for 'their' car companies... got to get sales up somehow...


Take it from another side.... I have an 18 mpg car bought 15 years ago... there were not many cars that got 'great' gas mileage that I was interested in at the time... I have NO incentive to get rid of it as it works just fine... getting me to and from work.. it is in great shape, just burn a quart of oil about every 2K miles...

Now, muliply that by 1 million (the number of cars that would be bought if this goes through)...

What am I going to do?? Probably buy a 24 to 28 mpg car... if most of the people does this it will actually save a small about of oil... and produce fewer emissions...

And it will be a better stimulus plan than almost all of the ones they have started... this will actually get people to buy stuff... and require them to put up their own money...

[FUEGO]

It is too bad there is no way to make the price of gas more expensive somehow so that people are encouraged to conserve fuel to a greater extent. Apparently $4 a gallon is the threshold where people pay attention.

[FinanceDude]

Quote:

Originally Posted by M Paquette You're probably referring to the Sudbury, Ontario nickel smelting plant. The Sudbury Basin is the site of the second largest known meteor crater (astrobleme) on Earth, and the magma upwelling (Sudbury Igneous Complex) produced mineral deposits that currently make this one of the world's largest suppliers of nickel and copper ores. Mining and smelting has been going on here since 1883. Open pit smelting starting in the 1880s destroyed much of the area's plant life that remained after heavy logging, leading to massive soil erosion. Major miners involved are INCO and Falconbridge. The INCO SuperStack project (a 1234 foot smokestack!) built in 1972 shifted the ground level air pollution that destroyed plant life to a high altitude dispersed cloud. While the local area benefited, lakes in the larger area quickly became more acid from the dissolved sulphur dioxide in area rainfall. Scrubbing equipment was finally added in 1994, and sulphur dioxide emissions dropped by a factor of 10. Conditions in the Sudbury area are greatly improved these days. Blaming the Toyota Prius for damage produced primarily from 1883 to 1972 by world demand for nickel, dominated by the stainless steel industry (70% of all nickel mined) strikes me as disingenuous at best. I'd blame all the folks using stainless steel tanks, pipes, fittings, and of course, homeowners with Evil stainless steel sinks containing deadly, deadly nickel. Oh, and camera batteries. Nickel-metal hydride batteries as found in the Prius and other electrical systems account for only a minute amount of the nickel mined. There's more nickel in the exhaust system of a sports car such as the BMW M3 than in the Prius battery.

The basis of my point is that looking at the NET effect of a Prius, it costs more to run than most other vehicles, even the hulking SUVs. You may NEVER reclaim the outlay of costs.......

[ERD50]

Quote:

Originally Posted by Texas Proud And it will be a better stimulus plan than almost all of the ones they have started... this will actually get people to buy stuff... and require them to put up their own money...

I agree that it may achieve those results. But I still think it is a "twisted" and selective way to go about it.

Is there any way to measure the cost/benefit? That is a red flag to me.

How much is it "worth" to us to have the US use less gasoline? US cars are already the cleanest on the planet (that is one reason a lot of those high mpg Euro cars are not imported).

And, as samclem pointed out in another thread, if we use less gasoline, that means there is more on the world market, keeping prices relatively lower than they would be otherwise. Unless the laws of supply/demand have been repealed, that means relatively more consumption by the rest of the world. And a lot of the "rest of the world" has pollution standards that are lax compared to US. I don't have time to look it up, but it would not surprise me if the "rest of the world" average pollution produced froma gallon of gas was several (maybe hundreds) of times worse than a US car, even a 10 YO one.

The EPA regs reduced some emissions by hundreds and even thousands of times over unregulated vehicles. It ain't small potatoes.

-ERD50

[FUEGO]

Quote:

Originally Posted by ERD50 How much is it "worth" to us to have the US use less gasoline? US cars are already the cleanest on the planet (that is one reason a lot of those high mpg Euro cars are not imported).

What is it worth to save a gallon of gas? $4.20 per gallon.

Take Texas Pride's example of a 15 y.o. car. Assume 5 more years of useful life before it hits the scrapyard. Let's say he's average and drives 12,000 miles/year or 60,000 miles in 5 years. At 18 mpg he burns 3,333 gallons to drive 60k miles. He's clever, he trades in his old car for a new one that gets 24 mpg, or 6 miles per gallon better. Since it is only a 6 mpg improvement, he gets the $3500 credit instead of the $4500 credit (unless this is a truck replacement we are talking about - haven't researched rules on that). At 24 mpg, one consumes 2500 gallons of gas to drive 60k miles. That is a net savings of 833 gallons over 5 years. Or $4.20 per gallon the taxpayer is paying.

Also factor in all the people who have an old beater sitting in their backyard that they only drive to home depot, use to haul garbage, or to go fishing once a month. Virtually no reduction in gasoline consumption. We may end up paying $30 or more to avoid burning a gallon of gas.

Of course all the variables can change and it may actually cost more or less to "save" a gallon of gas. The bottom line is that this program seems to be a rather expensive way to reduce gasoline consumption.

[Texas Proud]

Quote:

Originally Posted by FUEGO Of course all the variables can change and it may actually cost more or less to "save" a gallon of gas. The bottom line is that this program seems to be a rather expensive way to reduce gasoline consumption.

But that is my point.. it is not a program to reduce gas consumption (even though that is what some are touting)..... it is a stimulus package, just like the bridges and highways and byways and schools that they are spending almost $800 billion on... but this program requires a big 'matching' by the local entity (being ME if I do it)... the other probably does not require any match or very little...

Is it a great plan I do not know, but I think some of the other spending programs are much worse... take ethanol... now there is a program that cost a lot with little to no benefit...


HEY, there is an idea.... drop the ethanol subsidy and make it a high mileage car subsidy...

[ERD50]

Quote:

Originally Posted by FUEGO What is it worth to save a gallon of gas? $4.20 per gallon. .... We may end up paying $30 or more to avoid burning a gallon of gas ...The bottom line is that this program seems to be a rather expensive way to reduce gasoline consumption.

Excellent analysis FUEGO. Thanks.

Quote:

Originally Posted by Texas Proud But that is my point.. it is not a program to reduce gas consumption (even though that is what some are touting)..... it is a stimulus package, ....

Well, if we ignore the claims that it is about mpg, I'd still say it's a lousy way to stimulate the economy. If we want people to buy cars, why limit it to the people who have old gas hogs? I'm about ready to replace some cars, but I don't have any old gas hogs - why don't I get some bucks to push me over the edge? Would my dollars stimulate the economy less than someone who previously bought a gas hog? I don't get it.

Quote:

Is it a great plan I do not know, but I think some of the other spending programs are much worse...

Ok, we can agree there. I would *never* underestimate the ability of Congress to come up with even worse legislation I doubt that the Prez will tout this in an address saying "But it's not as bad as some bills we have passed!".

-ERD50

[bhoferp]

I thought for sure that I am driving a clunker, a 1991 Dodge Spirit, but alas, the combined mpg is 19, so it doesn't qualify. Surprisingly, our 2001 Ford Ranger is a clunker. However, the average trade-in value for it is around $5800. Since part of the cash for clunkers deal is that the dealers will junk most parts of the trade-ins (wonder how that will be monitored?), the maximum cash for clunkers deal would be less than just average trade-in. Guess I'll just keep on driving clunkers for now. Don't really want a monthly car payment anyway.

[M Paquette]

Heh. It looks like the effect of this bit of legislation is already showing up in the used car market. Beaters like disintegrating Chrysler crushmobiles, er, Voyagers are magically selling for $2950 instead of $500 in our local auto row, while the old Chevy/Geo Metros (32 MPG) are still 'cheap' (1998, 145K miles for $1,430).

Our tax dollars at work.

[FUEGO]

Quote:

Originally Posted by M Paquette Heh. It looks like the effect of this bit of legislation is already showing up in the used car market. Beaters like disintegrating Chrysler crushmobiles, er, Voyagers are magically selling for $2950 instead of $500 in our local auto row, while the old Chevy/Geo Metros (32 MPG) are still 'cheap' (1998, 145K miles for $1,430). Our tax dollars at work.

Dang! I was afraid of this and thought about premptively buying one of these "on spec".

[M Paquette]

Quote:

Originally Posted by FUEGO Dang! I was afraid of this and thought about premptively buying one of these "on spec".

Don't forget, you'll have to hold the clunker for one year.

Quote:

(B) has been continuously insured consistent with the applicable State law and registered to the same owner for a period of not less than 1 year immediately prior to such trade-in;

That was to fix the arbitrage hole, where a dealer would sell you a clunker to use as a trade-in the same day on a new car, splitting the Federal spiff.

[FUEGO]

Quote:

Originally Posted by M Paquette Don't forget, you'll have to hold the clunker for one year.

That wouldn't be a problem. I don't need new cars now, but I'd take new cars in a year if ole uncle is kicking in $3500 or so per car as a gift.

[Texas Proud]

Quote:

Originally Posted by FUEGO That wouldn't be a problem. I don't need new cars now, but I'd take new cars in a year if ole uncle is kicking in $3500 or so per car as a gift.

remember that the program has a one year window or when the money runs out....

So... you buy today on spec... the law does not get passed for a couple of months... and 9 months into the program all the money is gone... and you still have a month to wait.. no payment to you.. but I guess you still have a clunker you can trade in for probably what you paid.. just the insurance cost is the arbitrage fee...

[samclem]

Quote:

Originally Posted by Texas Proud just the insurance cost is the arbitrage fee...

Plus the delta between the (maybe already inflated) price of clunkers today and the (sure to be depressed) price of clunkers when the program expires. And, the oil spots on the driveway.

I'm thinking of buying a big 'ole rusty POS car and painting it with large helpful slogans like "YOUR SENATORS AND CONGRESSMEN ARE FORCING YOU TO PAY ME $3500 FOR THIS "CAR." THANKS!!" Then I'll drive it all over town, park it in front of some local politician's offices, etc.

[FUEGO]

Quote:

Originally Posted by Texas Proud So... you buy today on spec... the law does not get passed for a couple of months... and 9 months into the program all the money is gone... and you still have a month to wait.. no payment to you.. but I guess you still have a clunker you can trade in for probably what you paid.. just the insurance cost is the arbitrage fee...

There's some risk no doubt. I would only execute the plan if I can get some clunkers cheap (around $1000). If the price of clunkers is arbed up to much over $2000, I would be very hesitant to take the risk and buy one.

And I'm wondering about the insurance costs. Would I really pay anything extra to add a third vehicle to my policy? I obviously wouldn't get comprehensive and collision on my clunker, and I don't think my liability insurance rates are tied to the type or quantity of vehicles I drive.

[samclem]

Quote:

Originally Posted by FUEGO And I'm wondering about the insurance costs. Would I really pay anything extra to add a third vehicle to my policy? I obviously wouldn't get comprehensive and collision on my clunker, and I don't think my liability insurance rates are tied to the type or quantity of vehicles I drive.

I know our liabilty coverage premiums increased when we added a vehicle (same number of drivers). I asked why ("do you think I'll be driving two vehicles at once?) but didn't get a sensible reply.

[Zathras]

Depends upon your state.
In MN I believe there is a minimum amount and types of insurance you are required to have.
Update- I found MN requires more insurance than most states, including 'no fault' and 'uninsured motorist' coverage.
Great table at http://www.insure.com/car-insurance/...ge-levels.html

[ziggy29]

Quote:

Originally Posted by samclem I know our liabilty coverage premiums increased when we added a vehicle (same number of drivers). I asked why ("do you think I'll be driving two vehicles at once?) but didn't get a sensible reply.

The immediate reason that comes to mind is: At least in most states I'm aware of, if you let someone who isn't a named insured borrow one of your vehicles, your liability coverage is primary if they cause an accident. So it is possible that all of your vehicles will be operated at once, and all covered by your liability policy.