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Cash for Clunkers - why does congress hate me ?

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Cash for Clunkers - why does congress hate me ?

Old 08-13-09, 02:17 PM
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Re: Cash for Clunkers - why does congress hate me ?

Except that this isn't stimulus money, is it? It is new found money we are printing in addition to the stimulus money.
Old 08-13-09, 02:23 PM
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Re: Cash for Clunkers - why does congress hate me ?

Originally Posted by fujishig View Post
Not sure where you're getting that the vast majority of cars are fuel efficient... certainly more fuel efficient than the trade ins, at least by 2mpg, I guess.
Just looking at the list of top ten cars sold through the program, 8 of them, IMHO, are fuel efficient.

Originally Posted by fujishig View Post
Also can't argue with your second statement, but that's really, really faint praise there.
True.
Old 08-13-09, 02:44 PM
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Re: Cash for Clunkers - why does congress hate me ?

Originally Posted by kvrdave View Post
Except that this isn't stimulus money, is it? It is new found money we are printing in addition to the stimulus money.
I thought they borrowed the extra 2 billion from some clean energy fund? Not sure if they're going to pay it back, and there are surprisingly few news articles that even reference where the funding is coming from.
Old 08-13-09, 03:09 PM
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Re: Cash for Clunkers - why does congress hate me ?

Source of the funding
Spoiler:
Old 08-13-09, 03:33 PM
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Re: Cash for Clunkers - why does congress hate me ?

Originally Posted by cpgator View Post
Just looking at the list of top ten cars sold through the program, 8 of them, IMHO, are fuel efficient.
That depends on which list you look at
Old 08-13-09, 05:15 PM
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Re: Cash for Clunkers - why does congress hate me ?

Originally Posted by orangecrush View Post
That depends on which list you look at
I looked at the Edmunds list
Old 08-27-09, 12:57 PM
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Re: Cash for Clunkers - why does congress hate me ?

Clunkers aftermath:

http://www.latimes.com/business/la-f...,2161518.story

Excerpts:

Dealers still were awaiting millions of dollars in payments. Analysts wondered whether the program generated actual new sales or simply lured buyers to act sooner. Prices for some popular vehicles apparently went up. And some people enticed by the $3,500 and $4,500 rebates now worry they might have overextended themselves in taking the plunge to put a new car in the driveway during a recession.

Auto research firm Edmunds.com predicted Wednesday that the industry "is likely to experience a painful hangover" after the monthlong cash-for-clunkers party.

"People rushed into purchases that many would otherwise have made later this year. The result will be lower sales in the weeks to come," said Edmunds Chief Executive Jeremy Anwyl.

The number of people who intend to buy a new car in the next two months was down 50% from the peak of the clunkers program and 11% from the average in June, the firm said.

The frenzy generated by the program might have prevented some buyers from striking the best deal. Preliminary data gathered by TrueCar, a website that tracks auto pricing, indicated that dealers were charging higher prices and reaping bigger profits on some vehicles favored by cash-for-clunkers shoppers.

For example, dealer profit margins on the Chevrolet Aveo jumped to 4.9% in the first week of August from 1.8% in early July, according to TrueCar data.

"We've received reports from dealers that the markup on most qualified vehicles got progressively higher as we got closer to the end of the program," said Jesse Toprak, the site's vice president of industry trends.
CNW Marketing Research Inc., which tracks consumer buying habits, said a survey of 1,000 cash-for-clunkers participants found that 17% had doubts about their purchase of a new car, primarily because of the $275-to-$350 monthly payment they're now facing. The typical level of car buyer remorse is about 6% to 8%, and it goes up a few percentage points when incentives are offered, said Art Spinella, the company's president.

Noting that hurried buyers may have felt pressured to take whatever offer was on the table rather than to bargain for a better deal, Edmunds.com senior analyst Jessica Caldwell said, "I think some people felt that time was of the essence and they had to buy very fast."

At a time when dealers have been scrambling just to get customers on their lots, such experiences could hurt them down the road, she added.

"A lot of consumers have been scarred by this experience, and they'll have even more dread the next time they buy a new car," Caldwell said.
The top three new vehicles bought through the program, and eight of the top 10, were from foreign-headquartered manufacturers, led by the Toyota Corolla. The best-selling U.S.-branded car, the Ford Focus, came in fourth, and the Ford Escape was 10th. Toyota vehicles accounted for 19.4% of the new-vehicle sales, followed by General Motors with 17.6%, Ford with 14.4% and Honda with 13%.

One clear winner was South Korean automaker Hyundai, which accounted for 7.2% of clunker transactions -- far above its 4.3% overall U.S. market share through July. And that could help future sales.
Not sure what numbers they're using for the last statistics. So basically, dealers used the incentive to mark up prices, people bought cars on payment plans that they didn't really think through, the thinking is that this was a temporary spike and demand for cars will drop dramatically now, and "foreign" manufacturers made out (I realize that these foreign manufacturers have factories and businesses in the US).

Next up, cash for clunkers for appliances, where the eligible appliances "magically" increase in price by the exact amount of the govt. rebate. Yay!
Old 08-27-09, 02:39 PM
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Re: Cash for Clunkers - why does congress hate me ?

Originally Posted by fujishig View Post
Clunkers aftermath:

http://www.latimes.com/business/la-f...,2161518.story

Not sure what numbers they're using for the last statistics. So basically, dealers used the incentive to mark up prices, people bought cars on payment plans that they didn't really think through, the thinking is that this was a temporary spike and demand for cars will drop dramatically now, and "foreign" manufacturers made out (I realize that these foreign manufacturers have factories and businesses in the US).

Next up, cash for clunkers for appliances, where the eligible appliances "magically" increase in price by the exact amount of the govt. rebate. Yay!
This is no different than when car companies have rebate programs. Non-savvy car buyers end up with LESS of a deal than they would if there was no rebate and haggled. Ill-informed/equipped consumers have been out there before C4C.

As for "foreign" manufacturers, I don't care who the CEO is as long as the vehicles are assembled by U.S. workers.
Old 08-27-09, 03:11 PM
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Re: Cash for Clunkers - why does congress hate me ?

out of curiousity i just checked out the price for a 2009 new HOnda Accord EX-L. $27500 and i paid $23400 in April of this year. i love it when the value of my car increases

and i know someone who is going to start looking now that the program is over
Old 08-27-09, 03:36 PM
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Re: Cash for Clunkers - why does congress hate me ?

Originally Posted by al_bundy View Post
and i know someone who is going to start looking now that the program is over
If you didn't have a clunker to trade in then it makes sense.
Old 08-27-09, 04:55 PM
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Re: Cash for Clunkers - why does congress hate me ?

Originally Posted by al_bundy View Post
out of curiousity i just checked out the price for a 2009 new HOnda Accord EX-L. $27500 and i paid $23400 in April of this year. i love it when the value of my car increases

and i know someone who is going to start looking now that the program is over
but yours isn't new anymore, so it's not worth as much. And did you pay MSRP?
Old 08-28-09, 09:56 AM
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Re: Cash for Clunkers - why does congress hate me ?

i checked around and all the dealers will give you the internet price from cars direct or one of the other sites without arguing. they will try to rape you on the trade in and i had to fight for the price i wanted. maybe msrp was also $27000 a few months ago and i paid the internet price. don't remember.

they ended up giving me $9250 for my 2005 Toyota Matrix and i owed $2000 on it
Old 08-28-09, 11:22 AM
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Re: Cash for Clunkers - why does congress hate me ?

I heard on the news that the $3500 or $4500 is taxable! Nice.

I suppose people factored that into the equation when they figured out how much car they could afford. Sure they did...

But many of those cashing in on the clunkers program are surprised when they get to the treasurer's office windows. That's because the government's rebate of up to $4500 dollars for every clunker is taxable.

http://www.keloland.com/NewsDetail6162.cfm?Id=0,89084
But I see that people were being told that it wasn't taxable.

8. The CARS credit is not taxable to consumers.

http://www.cashforclunkersfacts.com/...lunkers-rules/
http://www.associatedcontent.com/art...mor.html?cat=3

Is it just the sales tax on that $3500 or $4500 that the consumer is liable for?
Old 08-28-09, 12:51 PM
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Re: Cash for Clunkers - why does congress hate me ?

Originally Posted by X View Post
I heard on the news that the $3500 or $4500 is taxable! Nice.

I suppose people factored that into the equation when they figured out how much car they could afford. Sure they did...



But I see that people were being told that it wasn't taxable.



http://www.associatedcontent.com/art...mor.html?cat=3

Is it just the sales tax on that $3500 or $4500 that the consumer is liable for?
I am sure it is just the sales tax. Though it would be a bit confusing to someone trading in their car as trade in values generally reduce the sales taxable total.
Old 08-28-09, 12:53 PM
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Re: Cash for Clunkers - why does congress hate me ?

Looks like it may be taxable under state sales/excise taxes, but not as income.
http://www.cars.gov/faq#category-01

Is the credit subject to being taxed as income to the consumers that participate in the program?

NO. The CARS Act expressly provides that the credit is not income for the consumer.


Do I have to pay State or local sales tax on the amount of the CARS program credit?

MAYBE. The question of whether a consumer must pay State or local sales tax on the amount of the CARS program credit depends on the sales tax law of each State or locality. Consumers should review the law of their respective States or consult a tax advisor to answer this question.
Here in Maine they charge sales tax on the credit, $225 for the $4500 max credit. For a normal trade in, you wouldn't pay sales (or income) tax on the trade in value. Also, if the C4C credit encouraged/enabled you to get a car with a $4500 higher sticker price, then you will pay an additional $360 in excise tax over the next 6 years.
Old 11-04-09, 05:28 PM
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Re: Cash for Clunkers - why does congress hate me ?

http://news.yahoo.com/s/ap/20091104/...h_for_clunkers
WASHINGTON The most common deals under the government's $3 billion Cash for Clunkers program, aimed at putting more fuel-efficient cars on the road, replaced old Ford or Chevrolet pickups with new ones that got only marginally better gas mileage, according to an analysis of new federal data by The Associated Press.

The single most common swap which occurred more than 8,200 times involved Ford F150 pickup owners who took advantage of a government rebate to trade their old trucks for new Ford F150s. They were 17 times more likely to buy a new F150 than, say, a Toyota Prius. The fuel economy for the new trucks ranged from 15 mpg to 17 mpg based on engine size and other factors, an improvement of just 1 mpg to 3 mpg over the clunkers.

Owners of thousands more large old Chevrolet and Dodge pickups bought new Silverado and Ram trucks, also with only barely improved mileage in the middle teens, according to AP's analysis of sales of $15.2 billion worth of vehicles at nearly 19,000 car dealerships in every state. Those deals helped the Ford F150 and Chevy Silverado along with Ford's Escape midsize SUV climb into the Top 10 most-popular vehicles purchased with the government rebates. The most common truck-for-truck and truck-for-SUV deals totaled at least $911 million.

In scores of deals, the government reported spending a total of $562,500 in rebates for new cars and trucks that got worse or the same mileage as the trade-ins in apparent violation of the program's requirements. The government said it is investigating those reports and said in some cases they were probably entered incorrectly by dealers or based on outdated fuel economy figures.

The National Highway Traffic Safety Administration is still reviewing the reports, and any dealers that submitted invalid trade-ins will be directed to return the government rebate, spokesman Eric Bolton said Wednesday.

The new data, obtained by the AP under the Freedom of Information Act, include details of 677,081 clunker trade-ins processed by the government through Oct. 16. More than 95,000 of the new vehicles purchased under the program or about one in seven got less than 20 mpg, according to the data.

The new figures, requested four months ago by the AP, represent the first substantial outside accounting of the clunkers program, lauded by the White House and the Transportation Department for improving fuel economy, stimulating sales and taking the dirtiest vehicles off the road. The data show the average fuel economy was 15.8 mpg for the old vehicles and 24.9 for the new ones. But plenty of consumers bought relatively low-mileage trucks and SUVs with the help of government checks.

"If we're looking for the environmental story here, we're going to be disappointed," said Jeremy Anwyl, chief executive at Edmunds.com, an analyst firm. "It might have started out from the perspective of improving the environment, but it got detoured as a way to stimulate the economy."

Popular high-mileage commuter cars including the Toyota Corolla, Honda Civic, Toyota Camry and Ford Focus also were among the Top 10 most popular new vehicles bought under the four-week program, with 105,280 of those models sold for a total of about $2 billion.

Bolton, the NHTSA spokesman, said Wednesday the program "proved to be a win for the economy and the environment" because it helped financially struggling dealerships and auto manufacturers and because, under the program's rules, clunkers necessarily were replaced with vehicles that got better mileage.

Chris Moss of Smithtown, N.Y., traded in his 1992 white Ford F150 pickup "it had 5 million miles on it and needed $50,000 in repairs, if you know what I mean" for a new Chevrolet Malibu hybrid for his wife. When he drove his old truck to the dealership's back lot with the rest of the clunkers, "90 percent of what you saw were old 150s and Explorers," he said. Moss posted a video on YouTube of his old truck's final day, called "Rust In Peace."

The $3 billion program, known officially as the Car Allowance Rebate System, ran from July 27 to Aug. 25 and generally required that new vehicles get better mileage at least 22 mpg for cars and either 15 mpg or 18 mpg for trucks depending on class and that trade-ins get no more than 18 mpg. The trade-ins were required to be destroyed in exchange for either $3,500 or $4,500 rebates.

"The value that the customer got for a lot of these vehicles was just a gift, no question," said Scott Pundt, sales vice president for the Dorschel Group of Rochester, N.Y., the No. 4 dealership in the U.S. with 592 vehicles sold under the program. "We were appraising 220,000-mile vehicles that were really rough, and they were getting $3,500 or $4,500 for them." Four out of five old cars turned in there exceeded 100,000 miles.

Some deals raise eyebrows:

In at least 145 cases, mostly involving trucks, the government reported consumers traded old vehicles that got better than or the same mileage as the new vehicle they purchased. The government said it was continuing to investigate. A driver in Negaunee, Mich., traded a 1987 Suburban that got 18 mpg for $3,500 toward a new Silverado pickup that got only 15 mpg. An Indianapolis driver traded a 1985 Mercedes 190 that got 27 mpg for $3,500 toward a new Volkswagen Rabbit that got only 24 mpg. "It's possible some quirky deal slipped through the cracks," Anwyl said.

In at least 15 deals in nine states, owners of large pickups cashed in old trucks for between $3,500 and $4,500 toward new Hummer H3 SUVs that got only 16 mpg.

A driver in Arlington, Va., traded a 1999 Ford Explorer with 15 mpg in July for $3,500 toward a new $28,000 Jeep Commander that weighs about 4,700 pounds and gets 16 mpg.

In at least 32 deals, drivers traded older vehicles for new large trucks including versions of Toyota Tundras, GMC Sierras, Chevrolet Silverados, Dodge Rams and Ford F150 pickups that got only 14 mpg.

A driver in West, Texas, earned $4,500 in July in exchange for a 1989 Chevrolet Suburban SUV that got 14 mpg and bought a 2009 Suburban that weighed 5,900 pounds and got 16 mpg. Across Texas, seven of the 10 most common transactions involved drivers trading old pickups for new ones.

Car-crazy California led clunker sales with more than 76,000 trade-ins, followed by Texas with roughly 43,000 and New York with nearly 37,000. In California, the Honda Civic was the No. 1 new car and no pickups ranked higher than 18th. In New York, the Hyundai Elantra was No. 1.

The clunkers program was very good for Longo Toyota of El Monte, Calif., just east of Los Angeles, which sold more than twice as many vehicles under the program as any other dealership in the country, worth more than $30 million. That sole dealership was responsible for 1,432 sales worth nearly $6 million in clunkers rebates, mostly from its sales of 323 Toyota Camrys, 277 Corollas and 171 Priuses.

"We knew it was just a matter of when, not if, we were going to get paid, so we kept our foot on the gas," Longo president Tom Rudnai said Wednesday.

The next-best dealership was Price-Simms Inc. of Sunnyvale, Calif., with 672 sales of vehicles worth about $16.1 million, mostly from its sales of 213 Priuses and 134 Camrys.

Pundt said his dealership in Rochester advertised aggressively to consumers and operated three shifts of employees to submit claims. "We had people in here through the middle of the night, working 2 a.m. until 7 a.m.," he said. "The computer was so slow."
I'm sure nobody is surprised that people just traded in their old trucks, for newer trucks that got roughly the same gas mileage. What a waste of money this program turned out to be.
Old 11-04-09, 05:45 PM
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Re: Cash for Clunkers - why does congress hate me ?

Color me shocked!
Old 11-04-09, 06:33 PM
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Re: Cash for Clunkers - why does congress hate me ?

I am sure none of this type of prudent use of tax dollars will make its it's way into the guvment take over of the health care industry.
Old 11-04-09, 06:41 PM
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Re: Cash for Clunkers - why does congress hate me ?

Some people drive around in trucks to look cool or to be in a BIG vehicle, but most truck owners (I'm talking pick up trucks not SUV's) own them for work. Contracters, carpenters, etc. It's not surprising that the most common deal (again MOST COMMON DEAL, not most popular trade in or most popular new purchase) is a like-for-like deal for a truck. People who need trucks for work have limited choices and a lot of brand loyalty. It shouldn't be a surprise that like-for-like truck deals was the most frequent transaction.
Old 11-04-09, 07:02 PM
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Re: Cash for Clunkers - why does congress hate me ?

Originally Posted by Mabuse View Post
Some people drive around in trucks to look cool or to be in a BIG vehicle, but most truck owners (I'm talking pick up trucks not SUV's) own them for work. Contracters, carpenters, etc. It's not surprising that the most common deal (again MOST COMMON DEAL, not most popular trade in or most popular new purchase) is a like-for-like deal for a truck. People who need trucks for work have limited choices and a lot of brand loyalty. It shouldn't be a surprise that like-for-like truck deals was the most frequent transaction.
That's exactly right. The writing was on the wall when they lowered the MPG threshold for buying a new truck in this program. What incentive did truck owners have to switch to cars, if they got the rebate anyway?

Of course, without that, I'm sure the discrepancy between "domestic" car sales and "foreign" car sales under this program would've been even greater.
Old 11-04-09, 07:32 PM
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Re: Cash for Clunkers - why does congress hate me ?

When will we start to see the stories about how bad car sales are now that the cash for clunkers program is over?
Old 11-04-09, 07:44 PM
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Re: Cash for Clunkers - why does congress hate me ?

Originally Posted by tcoursen View Post
When will we start to see the stories about how bad car sales are now that the cash for clunkers program is over?
Edmunds did an interesting study.
Old 11-05-09, 01:07 AM
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Re: Cash for Clunkers - why does congress hate me ?

Originally Posted by Mabuse View Post
Some people drive around in trucks to look cool or to be in a BIG vehicle, but most truck owners (I'm talking pick up trucks not SUV's) own them for work. Contracters, carpenters, etc. It's not surprising that the most common deal (again MOST COMMON DEAL, not most popular trade in or most popular new purchase) is a like-for-like deal for a truck. People who need trucks for work have limited choices and a lot of brand loyalty. It shouldn't be a surprise that like-for-like truck deals was the most frequent transaction.
I'm not disputing that at all, where I grew up there were a lot of people with raised trucks just to look cool, but there were a lot of truck owners like my father who needed the truck for work. Regardless though, I don't think the government should have been paying these people to trade up in car. Many of those contractors already get write off's for the business vehicle as a reason to purchase a new vehicle.
Old 11-05-09, 01:58 PM
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Re: Cash for Clunkers - why does congress hate me ?

Originally Posted by fujishig View Post
What incentive did truck owners have to switch to cars, if they got the rebate anyway?
Is there really such a thing as "enough incentive" to get truck owners to switch to a car. If you have needs that require a truck you have needs that require a truck and no incentive will get you to switch to a car.

I have needs that require a light truck with 4x4. I need it to do the things I do. It gets 15 mpg. No incentive in the world is going to get me to switch to a more fuel effecient sedan. Even if they were giving away Prius's I would still need my truck.
Old 11-05-09, 02:40 PM
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Re: Cash for Clunkers - why does congress hate me ?

Originally Posted by Mabuse View Post
Is there really such a thing as "enough incentive" to get truck owners to switch to a car. If you have needs that require a truck you have needs that require a truck and no incentive will get you to switch to a car.

I have needs that require a light truck with 4x4. I need it to do the things I do. It gets 15 mpg. No incentive in the world is going to get me to switch to a more fuel effecient sedan. Even if they were giving away Prius's I would still need my truck.
I'm pretty sure there are still people out there that have a truck (or SUV, or whatever) but don't NEED a truck.

For those that do need a truck, why subsidize them, if we want to get gas consumption under control? If we don't care about gas consumption, why not lower the MPG increase to 2 MPG for cars too?

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