Cash for Clunkers - why does congress hate me ?

[kvrdave]

So apparently fuel efficiency is not its own reward. You need to throw money at people to sweeten the pot. And then make most anything eligible, and not limit it to really fuel efficient cars.

I suppose if I owned GM and Chrysler, this may have sounded like a good deal as well.

[Bandoman]

Free gub'mint moneys!

[sracer]

Originally Posted by kvrdave

So apparently fuel efficiency is not its own reward. You need to throw money at people to sweeten the pot. And then make most anything eligible, and not limit it to really fuel efficient cars.

Under normal circumstances, fuel economy is its own reward for many people. In case you haven't noticed, these aren't normal circumstances. And unlike Bush's tax rebate stimulus, the results of this program aren't fully funded by the government. $4500 from the government + balance by the buyer.

I'm against bailouts and stimulus packages, but this program seems to be a more reasonable and effective approach than handing every taxpayer $600.

[Pharoh]

Originally Posted by Red Dog

Funny thing happens when gov't basically 'gives' money directly to the people. Now that's actual stimulus (the merits of which are still debatable), unlike the $$$$$$ bullshit called a 'stimulus' passed earlier in the year.

I wonder where I heard people calling for money directly given for consumer purchases back around the time of the "stimulus" bill?

[Birrman54]

Originally Posted by sracer

Under normal circumstances, fuel economy is its own reward for many people. In case you haven't noticed, these aren't normal circumstances. And unlike Bush's tax rebate stimulus, the results of this program aren't fully funded by the government. $4500 from the government + balance by the buyer.

I'm against bailouts and stimulus packages, but this program seems to be a more reasonable and effective approach than handing every taxpayer $600.

$3500 for a 1mpg improvement is completely useless - It's also completely useless to pay people to destroy perfectly operational vehicles.

[Jason]

Originally Posted by Birrman54

$3500 for a 1mpg improvement is completely useless - It's also completely useless to pay people to destroy perfectly operational vehicles.

I read somewhere that the cost to supply every gas station in the country with a hydrogen refueling pump would be about $1.5 billion. Scarcity of fueling stations is, of course, one of the biggest hurdles alternative fuel vehicles face. Wouldn't that spur REAL fuel efficiency (not to mention a whole new industry) more than giving people credit for trading in one SUV for another?

[Birrman54]

Originally Posted by Jason

I read somewhere that the cost to supply every gas station in the country with a hydrogen refueling pump would be about $1.5 billion. Scarcity of fueling stations is, of course, one of the biggest hurdles alternative fuel vehicles face. Wouldn't that spur REAL fuel efficiency (not to mention a whole new industry) more than giving people credit for trading in one SUV for another?

You know, I'd reflexively be against any kind of government involvement in that - simply because of how mandates like Ethanol tend to work out.

However, it would make a LOT more sense to spend money with actual infrastructure improvements that would allow more widespread adoption of alternative vehicles instead of "cash for clunkers".

I'm not even sure what the objectives of this program are.

It's certainly not to encourage fuel efficiency - or else they'd only qualify certain vehicles for purchase, or mandate a mileage improvement requirement instead of the random numbers they've chosen. It'd be much more sensible to have various rewards for mileage improvements of 20,30,40,50% etc.

Basically it's a program for people who bought American (since our sedans have horrific fuel efficiency) and for SUV/Truck owners. I can't think of a single car I've driven that would qualify that wasn't a truck/suv. My current car, a 1996 Maxima gets at least 20/24mpg, and my former POS mazda was at least 25mpg. Even my Jeeps tended to get at least 16mpg or so - so they'd barely be qualifying.

Also keep in mind, we're DESTROYING these cars. How can this be logical? Nobody in American can't afford a car? There's no way the pollution aspect can possibly justify the squandering of wealth that's occurring. This is like paying a child to throw bricks through store windows in order to stimulate the window repair section of the economy.

[kvrdave]

Originally Posted by sracer

Under normal circumstances, fuel economy is its own reward for many people. In case you haven't noticed, these aren't normal circumstances. And unlike Bush's tax rebate stimulus, the results of this program aren't fully funded by the government. $4500 from the government + balance by the buyer.

I'm against bailouts and stimulus packages, but this program seems to be a more reasonable and effective approach than handing every taxpayer $600.

Why? It ultimately does nothing in terms of efficiency. If people are driving true clunkers, they likely can't afford a new car even after $3,500-$4,500 free money. So they end up getting more consumer loans. In case you haven't noticed, those have helped put us in this situation. I think this is just some dumb idea that sounds like good green crap, but is hoped to be a shot in the arm of domestic car companies, but will ultimately help out Honda and Toyota far more than GM, Ford, or Chrysler. Because the only things those guys make that makes money is trucks that won't qualify.

[Red Dog]

Originally Posted by kvrdave

Why? It ultimately does nothing in terms of efficiency. If people are driving true clunkers, they likely can't afford a new car even after $3,500-$4,500 free money. So they end up getting more consumer loans. In case you haven't noticed, those have helped put us in this situation. I think this is just some dumb idea that sounds like good green crap, but is hoped to be a shot in the arm of domestic car companies, but will ultimately help out Honda and Toyota far more than GM, Ford, or Chrysler. Because the only things those guys make that makes money is trucks that won't qualify.

The premise being it's forced spending, and even if a foreign car is bought, the gov't still gets a nice chunk of sales tax.

[JasonF]

Originally Posted by Birrman54

I'm not even sure what the objectives of this program are.

It's certainly not to encourage fuel efficiency - or else they'd only qualify certain vehicles for purchase, or mandate a mileage improvement requirement instead of the random numbers they've chosen. It'd be much more sensible to have various rewards for mileage improvements of 20,30,40,50% etc.

They do only qualify certain vehicles.

Also keep in mind, we're DESTROYING these cars. How can this be logical? Nobody in American can't afford a car? There's no way the pollution aspect can possibly justify the squandering of wealth that's occurring. This is like paying a child to throw bricks through store windows in order to stimulate the window repair section of the economy.

This program is clearly raising the average MPG of our fleet. Now, you can argue that it's not raising it enough to justify the program's cost, but it's nonsense to say it's nothing more than breaking windows.

[JasonF]

Originally Posted by kvrdave

If people are driving true clunkers, they likely can't afford a new car even after $3,500-$4,500 free money.

Link?

[Red Dog]

Originally Posted by JasonF

Link?

It's an opinion....one I agree with.

[JasonF]

OK. In that case, it is my opinion that there are plenty of people who could afford a new car but weren't buying one, but were induced to buy one by a significant ($4500) price discount.

Hooray! We all have opinions with absolutely no facts to back them up. Let's argue with each other and refuse to back down in the face of any evidence contrary to our opinions!

[Birrman54]

Originally Posted by JasonF

They do only qualify certain vehicles.



This program is clearly raising the average MPG of our fleet. Now, you can argue that it's not raising it enough to justify the program's cost, but it's nonsense to say it's nothing more than breaking windows.

You can get $3500 for a truck with a 1mpg improvement. That's probably within the margin of error for normal driving anyway. So I would dispute how significant any increase to the MPG of "our" fleet.

How can you justify a program that takes perfectly usable vehicles off the road and pays you to destroy them.

http://www.consumeraffairs.com/news0...s_mileage.html

"Current EPA figures are definitely misleading and ultimately expensive for consumers," said David Champion, Senior Director of Consumer Reports' Auto Test Center. The magazine attributes the problem to the use of the EPA's outdated testing procedures, dating back to the 1973 oil embargo, which don't account for the increased drive time spent in dense traffic and faster highway speeds on today's roads.

The EPA also allows car manufacturers to use for testing purposes hand-built prototype vehicles and the most favorable test conditions for maximum fuel economy, yielding results that are nearly impossible for consumers to achieve.

Glad we're basing this program on an imaginary measurement.

[Red Dog]

Originally Posted by JasonF

Hooray! We all have opinions with absolutely no facts to back them up. Let's argue with each other and refuse to back down in the face of any evidence contrary to our opinions!

I agree. I also say we should all form opinions about a program w/o regard to which party came up with the program. Make it so.

[JasonF]

Originally Posted by Birrman54

You can get $3500 for a truck with a 1mpg improvement. That's probably within the margin of error for normal driving anyway. So I would dispute how significant any increase to the MPG of "our" fleet.

How can you justify a program that takes perfectly usable vehicles off the road and pays you to destroy them.

http://www.consumeraffairs.com/news0...s_mileage.html

Glad we're basing this program on an imaginary measurement.

First, I didn't attempt to justify anything; I simply tried to address some false or illogical statements in your initial post.

Second, I agree that the EPA measurement system is outdated and should be reformed. However, as long as we're doing an apples-to-apples comparison (comparing the EPA rating on the trade-in to the EPA rating on the new purchase), I still think we're going to have a net increase in fuel efficiency as a result of this program. Again, though, I fully concede that the magnitude of the increase may not justify the cost of the program.

[kvrdave]

Originally Posted by JasonF

Link?

www.jasonfiswrongagain.com

If if your opinion is correct, but counterintuitive, I think it is bad policy.

You don't get to keep the clunker, and the trade-in value is the amount of the government program. So if you have people who have the money to buy a new one, but didn't, you have to assume that these people are been driving a clunker worth less than $3500 or they could have done it at any time. I don't buy that. There may be a very few that had one. I drove a $1,000 1989 Chevy Van for about 16 months several years ago while I decided what I wanted in a car. I would have made out in that situation, but I think that is a very rare situation.

[Birrman54]

Originally Posted by JasonF

First, I didn't attempt to justify anything; I simply tried to address some false or illogical statements in your initial post.

Second, I agree that the EPA measurement system is outdated and should be reformed. However, as long as we're doing an apples-to-apples comparison (comparing the EPA rating on the trade-in to the EPA rating on the new purchase), I still think we're going to have a net increase in fuel efficiency as a result of this program. Again, though, I fully concede that the magnitude of the increase may not justify the cost of the program.

Upon perusing the CARS website, I can't find something that contradicts anything I've said. Their qualifications are arbitrary - exclude all but the least efficient sedans and the required improvements are a joke. Nearly every truck will qualify, but they can simply buy a new truck with marginal gains in efficiency.

www.cars.gov

The value of the credit given for the purchase or lease of a category 1 or 2 truck also generally depends on the difference between the combined fuel economy of the vehicle that is traded in and that of the new vehicle that is purchased or leased. If the new vehicle is a category 1 truck that has a combined fuel economy value that is at least 2, but less than 5, miles per gallon higher than the traded-in vehicle, the credit is $3,500. If the new category 1 truck has a combined fuel economy value that is at least 5 miles per gallon higher than the traded-in vehicle, the credit is $4,500.

If both the new vehicle and the traded-in vehicle are category 2 trucks and the combined fuel economy value of the new vehicle is at least 1, but less than 2, miles per gallon higher than the combined fuel economy value of the traded in vehicle, the credit is $3,500. If both the new vehicle and the traded-in vehicle are category 2 trucks and the combined fuel economy of the new vehicle is at least 2 miles per gallon higher than that of the traded-in vehicle, the credit is $4,500. A $3,500 credit applies to the purchase or lease of a category 2 truck if the trade-in vehicle is a category 3 (work) truck that was manufactured not later than model year 2001, but not earlier than 25 years before the date of the trade in.

http://www.bts.gov/publications/tran...able_a_06.html

If someone could already afford a new car, why exactly are we giving him/her $4500? So they'll buy it sooner? So we can save 1mpg over the 6 - 12 months they may have delayed their purchase if not for the plan? That doesn't seem particularly useful.

If the government broke every window on the block and replaced them with triple-pane ultra efficient windows, reducing our overall energy costs by 8-15% would that be a justifiable program? It would probably have more measurable improvement in energy usage than whatever this will accomplish.

[wmansir]

I see jasonF's point. Before congress approves any more funds they should request a report to find out exactly what's being traded in and what vehicles the gov is going to spend billions subsidizing.

On a related note, a while ago I was looking into replacing our oil boiler heating system. The federal tax rebate program for home efficiency upgrades are so strict (90+% eff) that not only do most energy star rated (85% eff.) oil burners not qualify, but there are only 2 burners on the market that do. The one I could track down locally was priced so high, when you include the price premium on the unit and the cost of their elaborate installation requirements, that I would be lucky to break even after the 30% tax break. Considering the installation hassle, higher upfront cost, increased maintenance costs, and decreased reliability I've decided to pass on the tax break and look at more common ~87% eff units.

[Nick Danger]

The new vehicle had to be rated at 22 mpg, unless it's a large truck. If it's a large truck, it only needs to be rated at 15 mpg. So people are getting "fuel economy" rebates for buying 15 mpg trucks.

[wmansir]

Originally Posted by Nick Danger

The new vehicle had to be rated at 22 mpg, unless it's a large truck. If it's a large truck, it only needs to be rated at 15 mpg. So people are getting "fuel economy" rebates for buying 15 mpg trucks.

Yes, but there is also a $1000 incentive to get a new vehicle 2/5/10 mpg better than the trade in. Right now we have no idea how many people are taking advantage of that. As long as the DOT can stop their computers from catching on fire it shouldn't be too difficult to at least get that information.

[JOE29]

[quote=kvrdave;9615189
Why? It ultimately does nothing in terms of efficiency. If people are driving true clunkers, they likely can't afford a new car even after $3,500-$4,500 free money. So they end up getting more consumer loans. In case you haven't noticed, those have helped put us in this situation. I think this is just some dumb idea that sounds like good green crap, but is hoped to be a shot in the arm of domestic car companies, but will ultimately help out Honda and Toyota far more than GM, Ford, or Chrysler. Because the only things those guys make that makes money is trucks that won't qualify.[/QUOTE]

I can't wait until about 6-12 months later when people lose more jobs and can't pay these car loans back. I'll be laughing til no end.
Then we'll have to bail these people out who default on their car loans. Ha!
But that's ok as long as the car dealers make some money.
Yeah, that's waht I want to do, take on a new car loan when I can barely pay off my other bills, sign me up for that!

[sracer]

Originally Posted by JOE29

I can't wait until about 6-12 months later when people lose more jobs and can't pay these car loans back. I'll be laughing til no end.

How empty and depressing is your life that you "can't wait" for people to lose their jobs and can't pay these car loans and then find humor in it?

Originally Posted by JOE29

Then we'll have to bail these people out who default on their car loans. Ha!
But that's ok as long as the car dealers make some money.
Yeah, that's waht I want to do, take on a new car loan when I can barely pay off my other bills, sign me up for that!

Not everybody is on the verge of personal bankruptcy. Unemployment is at 10% not 90%.

Why you are assuming that everyone who is participating in cash-for-clunkers is 1 paycheck away from destitution is a mystery to me.

[Heat]

Originally Posted by kvrdave

… I drove a $1,000 1989 Chevy Van for about 16 months several years ago while…

Anyway, from what I’m reading, dealers aren’t negotiating when customers are using the cash for clunkers program since the dealers had to wait for the money plus the possibility they wouldn’t get paid.

This isn’t a cash for clunkers program, it’s a cash for dealers / manufacturers program – I really hope it doesn’t get more funding.

[nemein]

Originally Posted by sracer

Why you are assuming that everyone who is participating in cash-for-clunkers is 1 paycheck away from destitution is a mystery to me.

Isn't that one of the stats people like throwing out? How many people are living paycheck to paycheck... I'm not in the "can't wait" category, but put me in the "wouldn't be surprised" if it starts to happen.