20090731
Cash for Clunkers
I’m not sure how congress managed to conceive of and pass legislation that actually makes sense, but the “Cash for Clunkers” program is the one stimulus that seems to work. After bailing out the auto industry and amid high unemployment, the idea of paying consumers much more than their auto trade-ins are worth if they buy a new (hopefully American – whatever that really means) car is simply brilliant. The $3500-$4500 cost to the taxpayer leverages its stimulating effect on the economy by getting the consumer to spend a lot more of their money at a time when an increase in consumer participation in the recovery is needed. The fact that the program went through the (hopefully first) billion dollars in only 5 or 6 days indicated the degree of pent up demand for big ticket items like automobiles. The additional impact the program has on boosting the overall fuel efficiency of the cars on the roads is a further win for the economy since it reduces the demand for foreign oil and lessens the trade deficit.
How can it be that congress managed to pass this into effect? I’m stunned. Perhaps there is hope for us after all.
mtm said,
July 31, 2009 @ 2100
They do it in Germany through 2009 as economic stimulus. The rules are roughly: the old car has to be 9 years or older and gets destroyed, you owned that car for at least one year. Now you buy a new car in 2009 which need to have the highest(?) environment certificate. You will get about 3000 USD plus any discount the dealership offers.
The dealerships are very helpful and do all the paperwork for you.
Until now (August 2009) they got 1.7mio requests, the stimulus money is enough for 2mio requests.
To put that into perspective: Germany has 39mio households. It’s a lot of new cars. It works.
The breakdown by car brand shows Hyndai and Opel (belongs to General Motors) as the “winners”.
http://www.bafa.de/bafa/de/pressemitteilungen/2009/09_umweltpraemie.html
Typically Germans went for smaller and family cars. You have to remember it was those families that owned a 9 year old car to begin with…
marc tobias
Hooda Thunkit said,
July 31, 2009 @ 2138
Joe,
“Perhaps there is hope for us after all.”
Locally we have a Kia dealer who is matching the Gubment’s $ 4,500 with $ 4,500 of their own (much like Chrysler).
One of their biggest sellers is a low end vehicle that costs $ 8.995…
Now, if that’s a good enough car for you, then it is a deal; but it isn’t American (whatever that means these days) and it shows one of the unintended consequences of Congress’s not thinking things through. . .
JMZ said,
July 31, 2009 @ 2150
Well from my perspective, this is one of the few stimuli that I can participate in (the other is the 30% renewable energy tax credit). I never got a stimulus check and don’t qualify for any of the other stimuli that phase out with income. I’m mulling over converting my 1998 Caravan into cash via this program and getting a Ford Fusion Hybrid. I inspected and test drove one this morning and was very impressed by the performance, quality, and “green” aspects. Ford is sort of American and the only American car company not to require a bailout or bankruptcy to remain a going concern. I do not mind rewarding them for that with my business.
Hooda Thunkit said,
August 1, 2009 @ 1310
Joe,
Understood onthe qualifying, but I thought that the “clunkers” had to be pre 1984, which would leave your Caravan outside of the qualification window again…
Also agree with choosing a hybrid; although I’m waiting for a plug-in electric for my “about town” car.
And re:
“Ford is sort of American and the only American car company not to require a bailout or bankruptcy to remain a going concern. I do not mind rewarding them for that with my business.”
Ford quietly borrowed $ 5 Billion for “retooling costs” from the Fed Gov. Didn’t hardly get any press, but borrow it they did, so they are also beholding to the Obomination of what passes for government these days in Washington…
Either way I too would only consider Ford, for some of the reasons that you have cited, although I’m partial to the Chrysler designs (particularly the 300).
Government Motors has nothing that I am interested in, BTW.
I’m still holding out hope for a Nat Gas over the road car…, when my current one needs replacing in another 8-10 years.
No need replacing a perfectly usable car that gets decent mileage just to replace it
Besides, at 65,000 miles it’s just getting broken in :-]
JMZ said,
August 1, 2009 @ 1430
The car has to be less than 25 years old. It could be last year’s model and still qualify. The discriminator in all of this is that the dealer only gives you $3500 or $4500 for your clunker. Not that plus the trade-in value. So if the car is new enough or otherwise has value at or above these levels, the owner probably will have better alternatives (like simply trading the car in).
JMZ said,
August 1, 2009 @ 2241
I cross posted my thoughts over on digg where the action is a bit more lively. You can enjoy that here
http://digg.com/autos/BREAKING_House_Adds_2_Billion_To_Cash_For_Clunkers
Hooda Thunkit said,
August 3, 2009 @ 1321
Joe,
I reread the Cash for Clunkers write up and I stand corrected
JMZ said,
August 8, 2009 @ 2135
I could not find a Ford Fusion Hybrid so, I opted for a Prius instead. There were quite a few in the local area that met my criteria and we had no problem closing the deal and taking delivery by just after lunch. Bye bye Dodge.