Cash For Clunkers

A friend of my said their are worse way to spend the stimulus and I suppose he is right.
If your friend has ideas to squander these stimilus funds, it is his/her patriotic duty to share them with congress.
Let's get the ball rolling---we are not quite broke yet.:(
 
If your friend has ideas to squander these stimilus funds, it is his/her patriotic duty to share them with congress.
Let's get the ball rolling---we are not quite broke yet.:(

His suggestion was to pay bigger bonuses to the deserving folks in AIG's financial products group.

I'd also add distributing copies of Miss Manner's guide to addressing important people to all of our folks in the armed services, in case they ever have to talk to a female senator.
 
His suggestion was to pay bigger bonuses to the deserving folks in AIG's financial products group.

I'd also add distributing copies of Miss Manner's guide to addressing important people to all of our folks in the armed services, in case they ever have to talk to a female senator.
:cool:

Move over Bill Gates--Step aside Steve Jobs--There's a new gang in town--and they are CREATIVE!! :clap::clap:
 
I have another idea -- if we want to keep improving energy conservation while propping up moribund industries, why stop at Cash for Clunkers?

How about "Money for McMansions?" :whistle:
 
From their FAQ:

"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."

This makes it sound like there may be a little room to negotiate some salvage value out of your trade-in. Not sure what typical scrap values are now, but a couple years ago you might be able to get at least a couple hundred out of a car. Depending on what kind of catalytic converter (if any), maybe more.
 
I have another idea -- if we want to keep improving energy conservation while propping up moribund industries, why stop at Cash for Clunkers?

How about "Money for McMansions?" :whistle:

Our thoughtful administration has already done that. $8000 tax credit for new home purchases.
 
So far I haven't seen anything preventing an individual from contracting with a third party who owns a clunker to buy a new vehicle from the dealer and immediately sell it to the individual. I think in most states that have it, you would owe a sales or use tax on the second title transfer from the clunker owner to you.
 
But you don't have to "trade in" a 4000 square foot home for an energy-efficient 1500 square foot home...

No, but you have a 30% tax credit (up to $1500 or unlimited depending on uses) to bling out your new McMansion with "energy efficient" stuff.

What a great time we live in - free money for everyone!!! :D And to think we were happy in the 1980's simply receiving free nasty government cheese...
 
'Cash for Clunkers' won't help most car buyers - Jun. 25, 2009

NEW YORK (CNNMoney.com) -- If you think the new "Cash for Clunkers" law is going to help you buy a new car, you're probably wrong.
As it's written, the law will benefit few car shoppers and those who might actually benefit from it probably shouldn't be buying a new car to begin with.
 
'Cash for Clunkers' won't help most car buyers - Jun. 25, 2009

NEW YORK (CNNMoney.com) -- If you think the new "Cash for Clunkers" law is going to help you buy a new car, you're probably wrong.
As it's written, the law will benefit few car shoppers and those who might actually benefit from it probably shouldn't be buying a new car to begin with.

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.
 
Has anyone noticed if the price of "almost new" cars has dropped in the last couple of weeks? It seems like this program would potentially cause the demand for "nearly new" cars to drop.
 
From their FAQ:

"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."

This makes it sound like there may be a little room to negotiate some salvage value out of your trade-in. Not sure what typical scrap values are now, but a couple years ago you might be able to get at least a couple hundred out of a car. Depending on what kind of catalytic converter (if any), maybe more.


I think you might be reading this wrong.... from what I read... you get the credit.... period.. you do not get scrap value, trade in value... anything else, just the credit..

Now, if you car was worth MORE than the credit, then why take the credit..

The car will be scrapped... taken apart and sold by pieces... I do not know who gets that money, but I hope it is the gvmt... it is they who are paying for it...
 
I think you might be reading this wrong.... from what I read... you get the credit.... period.. you do not get scrap value, trade in value... anything else, just the credit..

Now, if you car was worth MORE than the credit, then why take the credit..

The car will be scrapped... taken apart and sold by pieces... I do not know who gets that money, but I hope it is the gvmt... it is they who are paying for it...

I think the car dealer gets to keep the proceeds from the scrap. I assumed it would get lost in the transaction, but it actually does have some real value, especially if you have a palladium loaded catalytic converter in there. So you could at least include that in your bargaining, though it probably wouldn't help much.
 
I think you might be reading this wrong.... from what I read... you get the credit.... period.. you do not get scrap value, trade in value... anything else, just the credit..

Now, if you car was worth MORE than the credit, then why take the credit..

The car will be scrapped... taken apart and sold by pieces... I do not know who gets that money, but I hope it is the gvmt... it is they who are paying for it...

No the CARS website definitely makes it seem like you can get the scrap value. You don't get the trade-in value since the car gets scrapped, but the dealer shows you an estimate of the scrap value and so I guess you can negotiate for a portion/all of the scrap value. So you might get the $4500 credit plus an extra couple hundred for scrap.
 
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.
 
No the CARS website definitely makes it seem like you can get the scrap value. You don't get the trade-in value since the car gets scrapped, but the dealer shows you an estimate of the scrap value and so I guess you can negotiate for a portion/all of the scrap value. So you might get the $4500 credit plus an extra couple hundred for scrap.

Going to the law would seem to say that you are right... that the one who is 'scrapping' the car can keep the proceeds... so it looks like you could say 'split it with me'...

SOOO, what is the scrap value of an old monte carlo:confused:




(2) DISPOSITION OF ELIGIBLE TRADE-IN VEHICLES-
(A) IN GENERAL- For each eligible trade-in vehicle
surrendered to a dealer under the Program, the dealer
shall certify to the Secretary, in such manner as the
Secretary shall prescribe by rule, that the dealer--
(i) has not and will not sell, lease, exchange, or
otherwise dispose of the vehicle for use as an
automobile in the United States or in any other
country; and
(ii) will transfer the vehicle (including the engine
block), in such manner as the Secretary prescribes,
to an entity that will ensure that the vehicle--
(I) will be crushed or shredded within such
period and in such manner as the Secretary
prescribes; and
(II) has not been, and will not be, sold,
leased, exchanged, or otherwise disposed of
for use as an automobile in the United States
or in any other country.
(B) SAVINGS PROVISION- Nothing in subparagraph (A)
may be construed to preclude a person who is responsible for ensuring that the vehicle is crushed or shredded from-
-
(i) selling any parts of the disposed vehicle other
than the engine block and drive train (unless with
respect to the drive train, the transmission, drive
shaft, or rear end are sold as separate parts); or
(ii) retaining the proceeds from such sale.
 
OK.... still looking... but just makeing a wild guess from this site... $300 or so...

The site says catalytics are only in the $20 to $35 range... so I do not know where the $200 is from mentioned in the article...

"Car bodies are being bought for an average of $62.25 a ton, according to scrapindex.com, up almost $8 since February.
Rose noted that one catalytic converter, which contains platinum and other precious metals, can fetch up to $200 but may cost a car owner from $700 to $2,000 to replace"

Scrap-metal value causes rise in junk-car thefts - Kalamazoo Gazette - MLive.com
 
OK.... still looking... but just makeing a wild guess from this site... $300 or so...

The site says catalytics are only in the $20 to $35 range... so I do not know where the $200 is from mentioned in the article...

Not sure what is up with that site. They are quoting $350/troy ounce for 24k gold scrap when spot prices for gold are over $900/oz. You can obviously melt down the gold for much much much much less than $550 an ounce. My local scrap metals dealer pays at least 90-95% of nymex spot for gold scrap. Similar story with copper - looks like they only pay 60-80% of the copper spot prices for scrap copper, the local scrap yard pays 80-90% for most of the high to medium grade copper.
 
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
 
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.
 
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.

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.
 
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.
 
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.

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.

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.

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.


-ERD50
 

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