Cash For Clunkers

[Sanslines]

Cash in on your gas guzzler

You might qualify for up to $4,500 toward buying a more-fuel-efficient set of wheels if Congress OKs a 'cash for clunkers' bill.

<CITE>By Catherine Holahan (http://articles.moneycentral.msn.com/common/contributors.aspx#Holahan)</CITE>

MSN Money

Uncle Sam is dealing. A "cash for clunkers" proposal making its way through Congress would offer the owner of a gas-guzzling car or truck as much as $4,500 toward a newer, more-fuel-efficient vehicle.
Under the bill that passed the House on May 5 and a similar version under review in the Senate, qualifying clunkers must get 18 miles per gallon or less.

If the new car got 4 to 9 miles per gallon more than the old one, going by Environmental Protection Agency ratings, the payment would be $3,500. If the new car got at least 10 mpg more, the vehicle owner would get $4,500. For light trucks, the mileage gain would have to be at least 2 mpg for the $3,500 payment and 5 mpg for the $4,500.

In return for trade-in vouchers, dealers would agree to scrap the old vehicles, taking the gas hogs and their pollution off the roads. In theory, the environment would get a break, and struggling automakers and car dealers would get a hand.

Though the U.S. program was conceived as part of a strategy to limit climate change, the imploding economy has reshaped the debate. Original proposals were more stringent, offering the vouchers only for new cars that got at least 28 mpg and new SUVs that saw 23 mpg or more. There aren't many models, car or SUV, that do.

Even the bill's name has changed. A version introduced March 17 in the House was called the Consumer Assistance to Recycle and Save Act of 2009, or CARS. The bill that passed the House on May 5, however, closely resembles another version of the legislation aptly named the New Automobile Voucher Act.

"This will not benefit the environment, but it will help sell a new pickup truck," said Ann Mesnikoff, the director of green transportation with the Sierra Club, the nation's largest environmental protection group. "They are trying to make it possible to sell anything under this bill."
Environmental activists are pushing lawmakers to make the fuel requirements more stringent in the Senate version of the bill. But depending on where you stand, less stringent fuel requirements may be a good thing.

The obvious winners would be the owners of virtually worthless older cars who had plenty of cash or the ability to obtain financing. Though the bill would do little to free up financing for strapped buyers, it would give relatively affluent consumers the push they might need to feel comfortable about purchasing this year.


MSN Money personal-finance columnist Liz Pulliam Weston said the plan would provide a nice windfall for those who had planned to buy a new car anyway and had the means to do so.

"We sold our 1993 Ford Explorer to a friend for $350 earlier this year. She's going to get a nice little bonus if this passes," Weston said. "But I worry that people will saddle themselves with fat car payments they ultimately can't afford."

Weston recommended that buyers limit loans to four years and put down at least 20% of the price of the car. Her car-buying rule of thumb: Keep payments to no more than 10% of your monthly gross income.


For many people, that means a fairly cheap new car. But they're out there. (Here's MSN Autos' look at new rides under $10,000 (http://editorial.autos.msn.com/listarticle.aspx?cp-documentid=1027864).) With a $4,500 voucher as a down payment and a four-year loan at 7.5%, the payments on a $10,000 car would be about $133. And don't forget, the sales tax on any new car, with a price of up to $49,500, bought between Feb. 17, 2009, and the end of the year is deductible on next year's tax return.

No help for the driving poor

Owners of clunkers without the credit or cash to buy would lose out. Not only would their taxes subsidize the bill, but the price of used cars would likely increase because the bill could take hundreds of thousands of them off the road. Parts to fix older cars would become more expensive, too, because the bill would require that engines and transmissions of trade-ins be destroyed and recycled.


The Automotive Aftermarket Industry Association is one of the biggest opponents of the bill. Repair shops and resellers will see the cost of parts increase as expensive, dirty parts of old cars are made into scrap metal.
"We don't see anyone that is really going to benefit except the people that could buy the car on their own," says Aaron Lowe, the vice president of government affairs for the aftermarket group.

For someone with subprime credit -– a FICO score of 620 or below -– rates could easily top 15%, adding $50 a month to the payments on that $10,000 car.

Winner: The struggling dealers

Auto dealers would be among the clearest winners of the House bill, and they are pushing hard for it in its current form. On May 13, more than 100 auto dealers marched on Washington to encourage Congress to approve the bill and other initiatives.


"The concept of cash for clunkers is terrific for countless reasons," said Bailey Wood, a spokesman with the National Automobile Dealers Association. "Stimulating auto sales is essentially good for everybody."
Wood sees the legislation as a crucial victory in what has been a year of unbearable losses for the industry. For the past four months, auto sales have been down an average of 40%. The sharp sales decline coupled with new difficulties in obtaining loans to purchase vehicles that dealers then resell on their lots has forced many to shut their doors. More than 880 auto dealerships closed in 2008, and thousands more could close if Chrysler, General Motors and others go through with plans to reduce the number of dealers by upward of 30%.

Each dealership closing weakens the economy by putting dozens more people out of work and unable to find jobs. The average dealership employs 52 people, Wood said. "These people can't simply go down the street and get a job at another dealership because that dealership has already laid people off," he said.

Runner-up: Auto manufacturers

Auto manufacturers believe the bills could help reverse the sales slide brought about by the downturn and the uncertainty surrounding the future of GM, Ford Motor and Chrysler.


Though the bill, budgeted at $4 billion, is intended to sell about a million vehicles, the Alliance of Automobile Manufacturers believes the government incentives could sell even more if they prove as successful as similar programs in Europe. Auto sales in Germany jumped 22% after the government offered a 2,500-euro (about $3,400 today) incentive for trading in vehicles (http://www.bloomberg.com/apps/news?pid=20601087&sid=aaRG6uial8QY) older than 9 years.

Some estimates put the number of potential sales in the U.S. at 1.3 million vehicles. Those additional sales would be huge for an industry anticipating it will sell 40% fewer vehicles this year -- less than 10 million automobiles -- if trends continue.

"It is very obvious that something must be done to bring consumers back to dealer showrooms," said Charles Territo, a spokesman for the Alliance of Automobile Manufacturers. "This has the potential to take hundreds of dollars a month off the monthly payment of a new vehicle."

http://articles.moneycentral.msn.com/SavingandDebt/SaveonaCar/Cash-for-your-gas-guzzler.aspx

[Naturist Mark]

I just can't understand why this program is available for imported vehicles.

It makes some sense to subsidize the purchase of higher mileage domestic cars - benefiting the American car companies (which we temporarily own a piece of) while putting American workers back on the job. But WHY bailout foreign car companies? Isn't it Japan's job to bail out Japanese car makers? Isn't it Germany's job to bail out German car makers? Isn't it Korea's job to bail out Korean car makers?

[Navigator]

I just can't understand why this program is available for imported vehicles.

It makes some sense to subsidize the purchase of higher mileage domestic cars - benefiting the American car companies (which we temporarily own a piece of) while putting American workers back on the job. But WHY bailout foreign car companies? Isn't it Japan's job to bail out Japanese car makers? Isn't it Germany's job to bail out German car makers? Isn't it Korea's job to bail out Korean car makers?

Toyota Republicans?:mad:

www.huffingtonpost.com/leo-w-gerard/toyota-republicans-should_b_152678.html

[Fitz1980]

I just can't understand why this program is available for imported vehicles.

It makes some sense to subsidize the purchase of higher mileage domestic cars - benefiting the American car companies (which we temporarily own a piece of) while putting American workers back on the job. But WHY bailout foreign car companies? Isn't it Japan's job to bail out Japanese car makers? Isn't it Germany's job to bail out German car makers? Isn't it Korea's job to bail out Korean car makers?

Well some "foreign" cars are made in the US. BMW has a plant in one of the Carolinas. On the other some "American" cars are made in Mexico.

[maxnude]

Who wants to spend $25K to $55K to get a $4,500 Clunkers rebate, and a vehicle that's so generic looking you can't tell what make it is.

My Clunkers are paid for, classics, and will be running just fine after the above are paid for way down stream. I get complements and offers to buy often.

[Naturist Mark]

Well some "foreign" cars are made in the US. BMW has a plant in one of the Carolinas. On the other some "American" cars are made in Mexico.

Yes, and I wouldn't object to being able to use the credit on a Made in Ohio Honda Accord. And nearly every small car "made" by GM is an import with a GM label slapped on it. And many "foreign" imports contain Made in America parts, and there are quite a few imported parts in domestically manufactured cars. It would have been simple to require a model be 50% or 60% domestic content. But there is no domestic content requirement to this credit.

[maxnude]

If you don't have far to go, or a permanent older resident at a nudist resort or wherever, trade in your clunker for the newest Senior Citizens scooter.

Made in the U.S.A!

[maxnude]

Ford Europe makes a fuel efficient 65 MPG Clean Diesel called the "Ford Fusion" which is profitable in Europe.

The U.S. and especially the State of California will not allow these to be operated, licenced, or brought into the State.

Why cannot FORD U.S.A. open a shuttered U.S. plant, employ workers, and manufacture the engines, and parts here in the U.S.A?

If FORD Europe is profitable with this model, why cannot FORD U.S.A. be?

http://www.google.com/search?q=fords%20fiesta%20diesel

Ford has no plans to bring it to America for one simple, stupid, reason. It's a diesel. [Bart: A Clean Hi Tech diesel to boot] The Fiesta sports a 1.6-liter turbocharged engine with direct ...

The 65 mpg Ford the U.S. Can't Have
Ford's Fiesta ECOnetic gets an astonishing 65 mpg, but the carmaker can't afford to sell it in the U.S.

http://images.businessweek.com/story/08/600/0904_mz_ecocar.jpg
The ECOnetic went on on sale in Europe November 2008

By David Kiley

If ever there was a car made for the times, this would seem to be it: a sporty subcompact that seats five, offers a navigation system, and gets a whopping 65 miles to the gallon. Oh yes, and the car is made by Ford Motor (F), known widely for lumbering gas hogs.

Ford's 2009 Fiesta ECOnetic goes on sale in November. But here's the catch: Despite the car's potential to transform Ford's image and help it compete with Toyota Motor (TM) and Honda Motor (HMC) in its home market, the company will sell the little fuel sipper only in Europe. "We know it's an awesome vehicle," says Ford America President Mark Fields. "But there are business reasons why we can't sell it in the U.S." The main one: The Fiesta ECOnetic runs on diesel.

http://www.bartsystems.com/URLImageArchive/FORD1.JPG

http://www.bartsystems.com/URLImageArchive/FORD2.JPG

http://www.bartsystems.com/URLImageArchive/FORD4.JPG

http://www.bartsystems.com/URLImageArchive/FORD3.JPG

When will the U.S.A. learn to get back to business and make what's needed and what the people should have to help the economy, environment, and health of this nation in more than one way?

[maxnude]

Obama to lend $8 billion to Ford, Nissan and Tesla to build green cars

http://current.com/items/90263473_obama-to-lend-8-billion-to-ford-nissan-and-tesla-to-build-green-cars.htm

Cultivating the next generation of fuel-efficient vehicles, the Obama administration said Tuesday it would lend $5.9 billion to Ford Motor Co. and about $2.1 billion to Nissan Motor Co. and Tesla Motors Inc. in a government-industry partnership to build green cars.

Energy Secretary Steven Chu said the three automakers would be the first beneficiaries of a $25 billion fund to develop fuel-efficient vehicles. The loans to Ford will help the company upgrade factories in Illinois, Kentucky, Michigan, Missouri and Ohio to produce 13 fuel-efficient vehicles.

Nissan will receive loans of $1.6 billion to retool its plant in Smyrna, Tenn., to build electric vehicles and construct a battery manufacturing plant. Tesla will get $465 million in loans to build electric vehicles and electric-drive powertrains in California.

The loans were designed to help auto manufacturers meet new fuel-efficiency standards of at least 35 mpg by 2020, a 40 percent increase over current standards.

“These loans will help the auto industry meet and even exceed the president’s tough fuel standards,” Chu said at Ford’s Research and Innovation Center. “This means the most fuel-efficient cars in the world must be made right here in America.”

Dozens of auto companies, suppliers and battery makers have requested $38 billion from the loan program, which was created last year to give car companies and suppliers low-interest loans to retool their facilities for green vehicles and components such as advanced batteries.

Ford had been seeking about $5 billion in loans by 2011 and a total of $11 billion from the program to invest $14 billion in advanced technologies over the next seven years.

The loans will help Ford convert two truck plants to produce cars and help the company raise the fuel efficiency of nearly 2 million new vehicles a year. The government said it will help Ford transform nearly 35,000 jobs into “green” engineering and manufacturing jobs.

Ford has said it intends to bring several battery-electric vehicles to market starting next year, with a plug-in hybrid vehicle coming by 2012.

“We want to be in every market segment in the U.S.,” said Ford CEO Alan Mulally. “Every year forever we want to continue to improve fuel efficiency.”

Ford expects to begin repaying the loans in 2012, with an interest rate based on the current U.S. Treasury rate hovering between 3 and 4 percent, said Ford spokesman Mike Moran. The company would have faced much higher interest rates from private lenders.

Ford can draw from the loan for work done to retool its plants going back to late last year, Moran said. Priority was given to plants at least 20 years old and the facilities must build cars that improve fuel efficiency by 25 percent.

Nissan said it would use its $1.6 billion loan to modify its Smyrna, Tenn., plant to produce zero-emissions vehicles and build a new facility to produce lithium-ion battery packs. The Japanese company has previously outlined plans to develop an all-electric car with 100 miles of pure battery range for release in late 2010.

The electric car will initially be built in Japan. Dominique Thormann, Nissan North America’s senior vice president for administration and finance, said the loans could create up to 1,300 jobs at the two facilities and lead to U.S. production of the electric car beginning in 2012.

Nissan Chief Executive Carlos Ghosn said in Japan that the U.S. would be “a very important market” for the company’s electric strategy. “I can tell you I’m not at all worried about how to sell these cars because there is an appetite for zero-emission cars.”

Tesla, based in San Carlos, Calif., will use $365 million for production engineering and the assembly of the Model S sedan, an all-electric vehicle that is expected to travel up to 300 miles per charge and go on sale in 2011. It will use $100 million for a powertrain manufacturing plant expected to employ 650 workers...

_____________________________

COMMENT:

O'bama can't say the "N" WORD!

NUCLEAR POWER GENERATION
&
NATURAL GAS & MULTI FUELED TRUCKS, & VEHICLES

Plug-in hybrid's are a joke and terrible polluter as 80% of U.S. Power plants are fossil fuel powered emitting all kinds of yes Radiation, heavy metals, and 1,000's of tons or global warming gases, pollutants, toxic poisons, and radiation PER PLANT per year.

Nuclear power plants HAVE NO EMMISIONS, AND COST ONE QUARTER OF WHAT DIRTY POLUTING FOSSILE POWER PLANTS COST TO OPERATE.

Hybrid plug in vehicles are not practical or cost effective until at least 60% of U.S. power plants are nuclear powered.

Natural Gas powered vehicles [UPS, FedEx, PG&E, Many City Utilities] many are in operation now with U.S. Natural Gas not dependant on Mid East imports.

Natural gas powered vehicles run on U.S. produced, pumped almost unlimited source of domestic supply, and vehicles run on Natural gas are cleaner, and last 3-4 times as long as petrol or gasoline.

You can fill your vehicle from home on 117 VAC natural compressor from the same supply as your hot water heater, stove or heating.

Max, Northern California.

[Bluetaylor]

I didn't know Ford made a 65mpg Fiesta ECOnetic clean diesel until max posted it.

It is strange it is not for sale here in the USA? Maybe it is too much mpg to soon - you know how GREEDY the oil companies are.

VW is pushing the Jetta clean diesel as a hybird alternative and rated in the high 40's hwy and like 30 city. It is for sale now in the USA.

I don't really care for Fords, but I'd consider one of these ECOnetic - it looks pretty cool and similar to the Toyota Y.

[Fitz1980]

Yes, and I wouldn't object to being able to use the credit on a Made in Ohio Honda Accord. And nearly every small car "made" by GM is an import with a GM label slapped on it. And many "foreign" imports contain Made in America parts, and there are quite a few imported parts in domestically manufactured cars. It would have been simple to require a model be 50% or 60% domestic content. But there is no domestic content requirement to this credit.

I agree on that point. I like the fact that they now have to list the percentage of the car made or assembled in where. I read a story about how years ago some Japanese company that shipped pick-up trucks to the US with bumpers sitting in the truck's bed. At the dealership the mechanic took the bumper and bolted it to the body. Than they slapped a big sign on the truck saying "partially assembled in the USA."

[MoonShadow]

Why cannot FORD U.S.A. open a shuttered U.S. plant, employ workers, and manufacture the engines, and parts here in the U.S.A?

If FORD Europe is profitable with this model, why cannot FORD U.S.A. be?




It's call the UAW. As long as there is a UAW, no US car manufacturer can provide a profitable model as the ECOnetric is in Europe. Get rid of the UAW.

[maxnude]

O'bama cannot say the "N" WORD!

NUCLEAR POWER GENERATION
&
NATURAL GAS & MULTI FUELED TRUCKS, & VEHICLES


O'bama's plans for alternate green power, Plug in hybrid's, and Cash for Clunkers is not realistic, actually makes pollution and green house gasses worse, and won't help much at all getting off the addiction of importing expensive foreign based fossil fuels.

His alternate wind power, and solar plans [1-2% Now] fail at night and when the wind doesn't blow, and doubling the alt power in a few years is like a needle in a huge hay stack "Big Deal" increasing the U.S. alternate power to 2-4%.

His plug in hybrid plans actually increase global warming, fossil fuel usage by using filthy, polluting, and radiation spewing fossil fuel powered plants to make electricity to charge plug in hybrids, and to make expensive hybrid batteries.

Plug in Hybrids won't be practicable, cost effective, less polluting, or reduce dependence on foreign fossil fuel until 60% of U.S. Power generation is by Clean, Non Polluting, Nuclear power generation which costs one quarter of what fossil fueled plants cost to produce electricity.

O'bama is ignorant in not considering conversion and use of the most abundant and almost unlimited United States source of Natural Gas [Being pumped back into the ground] larger than far east fossil fuel supplies.

Private industry, Counties, and Cities are already operating Natural Gas powered trucks, and vehicles such as UPS, FedEx, PG&E, and likes of cities like Sacramento, California, the State Capitol in which all city and county busses, and garbage trucks are natural gas powered.

Vehicles that run on natural gas are cleaner, less polluting, last 2-4 times longer, and can be refueled at natural gas stations, or at home via 117 volt AC powered natural gas compressor from the same supply as your hot water heater, stove or heating.

O'bama is anti U.S. sourced and use of U.S. produced energy.

O'bama is anti Clean, Non-Polluting Nuclear power generation.

The Federal Government should immediately require that all newly purchased vehicles [Including State, County, and Cities] be natural gas, and multi-fueled vehicles, operating on U.S. sourced and produced fuels.

The Federal Government should replace all newly needed and replacement power plants with clean, non-polluting nuclear power generation plants like the 104 or 20% of U.S. power produced by plants that have been operating safely without polluting for over 40 years.

Many smaller countries are out pacing the United States by producing their energy needs by safe, non-polluting, clean, and non green house producing nuclear power generation, and reduction of their dependence on foreign oil & fossil fuels.

[Naturist Mark]

It's call the UAW. As long as there is a UAW, no US car manufacturer can provide a profitable model as the ECOnetric is in Europe. Get rid of the UAW.

EVERY automotive plant in Europe, in Japan, and in Korea is unionized. The UAW is not the problem (but our lack of affordable national health care is an issue).

[Navigator]

O'bama's plans for alternate green power, Plug in hybrid's, and Cash for Clunkers is not realistic......

Why does almost every paragraph of your post begin with "Obama" or "His"? It makes you sound like you're posting a partisan rant rather than trying to discuss a serious subject which, by the way, was one of Obama's top four priorities during his campaign.

Is it because we don't have all the alternate energy sources you list yet?

Let's see. Mr. Obama has been President for 5 months and has had to spend a good part of that time trying to deal with "The Party of NO" who do all possible to obstruct any accomplishment. Bush had total control of all branches of government for 6 years and the ability to work with Dems on issues close to their hearts, like alternate energy, for his other 2 years.....if he wished.

Do we now have a nation with 20 or 30 new nuclear reactors, new geothermal and hydroelectric facilities, 10 or 20 new solar-thermal electricity generating plants in western deserts, wind generating farms all through the midwestern wind zones, tidal generating farms all along our coasts where tidal ranges are high and a country full of natural gas powered vehicles with nationwide infrastructure for refueling them?

No, of course not. And that seems to be your complaint. But is it the fault of the new guy, who is quite possibly a genius level President, or is it the fault of the buffoon who held the office for 8 long, disasterous years before him?

Or are you just saying that Obama is so much brighter than bush that much more is expected of him so he should have been able to accomplish all that in his first 5 months?

Or perhaps you could post or link to a Republican Energy Plan that's better and more comprehensive than what Mr. Obama is just starting to do with his energy bill.

[Nu]

$4500, WOW!

There is some talk that the Canadian,federal government should also get clunkers off the road.
BUT, for only $2500!!!!!!

[maxnude]

Why does almost every paragraph of your post begin with "O'bama" or "His"? It makes you sound like you're posting a partisan rant rather than trying to discuss a serious subject which, by the way, was one of Obama's top four priorities during his campaign.

Navigator, I am discussing a serious subject [This Thread] and would rather not change the flow of the subject to politics or off topic.

Call the current administration, senate, house, or commander in chief what you want, but look around at national news, media, white house news correspondents, Washington Post, and syndicated columnists; O'bama is often used rather than "Barack Hussein Obama" or "President Barack Hussein Obama.

Before Barack Hussein Obama was elected during town house debates he avoided mentioned nuclear power generation as the only massive pollution free green house gas free source of energy and electricity.

When forced to in debate he waved it off as when its safe he would consider the technology.

Yes I have issues with the current administration especially in the energy and environmental areas, out of control spending, and the deficit.

The administration is way off base in the scope & goal of reducing filthy and polluting fossil fuel energy usage, importing, and massive sourcing of clean non polluting energy.

Since election, efforts in green wind, solar, and plug-in hybrid vehicles have been and will be like pee'ing in the ocean compared to huge demands and usage of dirty energy in the U.S.

BTW, The only massive source of green, clean energy is not one of the top four priorities you mentioned, or is it planned to be.

The Administration eliminated $50 Billion in stimulus package for Clean Green Nuclear projects and 5.4 Billion for Clean Coal.

Solar & wind are alternate part time sources of energy less than 1-2% now, unlikely to reach 15-20% a decades away.

U.S. power plants are expected to produce about 2.8 billion tons of CO2 this year.

Charging plug-in hybrids with filthy polluting fossil based electric plants is defeating green technology.

Electric & Plug in hybrid batteries cost a lot to produce and use and pollute using fossil fueled power plants.

U.S. uses 20,680,000 million barrels fossil based oil per day, 1/4th of the worlds daily production, +58% foreign imports.

The national Debt stood at $10.6-trillon on the day Barack Obama took office.

Treasury Department quietly reported this year 3/09 the National Debit hit $11 Trillion for the first time ever.

If his budget projections are accurate, he'll run up nearly as much government debt in fours years as President Bush did in eight!

Well now that everyone's tax dollars are paying to bail out banks, automotive corporations, and government; Many are unemployed, in the red, or broke.

The government now wants everyone to buy new green plug-in hybrid cars on credit they can't get, and then thinks charging these vehicles on filthy polluting power plants is going to save the environment and make the U.S. energy independent.

If this out of control spending and deficit continue at the current pace we will all be living outside in tents, growing our own food, and possibly driving our vehicles once in a while on $8-$10 dollars per gallon petrol. God help or future generations. The interest alone will be in the trillions, and impossible to pay back.
.

[Illinois59]

Well now that everyone's tax dollars are paying to bail out banks, automotive corporations, and government; Many are unemployed, in the red, or broke.

.

Since we have these messes to deal with, wouldn't it be a good idea to figure out how we got into these messes and work to change the system? We live in a society where greed is king and ethics are a nuisance. Deregulation led to many crash and burns in the air transportation industry and now the banking industry and automotive industry. If you are waiting for the economic recovery, it ain't gonna happen, buddy. Corporate greed has done quite well at destroying the middle class and without the middle class to support the top and the bottom, there is nothing to hold up either end.

[Fitz1980]

Before Barack Hussein Obama was elected during town house debates he avoided mentioned nuclear power generation as the only massive pollution free green house gas free source of energy and electricity.

I agree on that point.

[nakedstudent]

Who wants to spend $25K to $55K to get a $4,500 Clunkers rebate, and a vehicle that's so generic looking you can't tell what make it is.

My Clunkers are paid for, classics, and will be running just fine after the above are paid for way down stream. I get complements and offers to buy often.

I agree. I think car payments are toxic... It's impossible to create wealth when you're constantly shelling out 200+ a month on something that does nothing but loose value.

I am paying the penance for financing a car right now. I could have my college loans payed for in 3/4 of the time schedule I'm currently on if I didn't have a car payment.

I can't wait for my car to be payed off. I'm going to save up put my '02 cavalier in pristine condition and keep it the rest of my life if only as a personal vehicle. I would probably need something bigger if (God willing) I can start a family.

I'm not entirely sure that my gas mileage would qualify for the rebate (not that I want it anyways.) The Z24 model is getting me about 25 mpg in the city and can pass 30 on the highway depending on how my right foot feels.

[nakedstudent]

It's call the UAW. As long as there is a UAW, no US car manufacturer can provide a profitable model as the ECOnetric is in Europe. Get rid of the UAW.

I can't honestly believe I am in 100% agreement with you on this topic?!?!?!

[Sanslines]

I'm not entirely sure that my gas mileage would qualify for the rebate (not that I want it anyways.) The Z24 model is getting me about 25 mpg in the city and can pass 30 on the highway depending on how my right foot feels.

No, your car does not qualify based upon the assumption that your stated gas mileage is close to the government indicated gas mileage for your vehicle.


http://www.mdauto.org/admin/publications/CASH%20FOR%20CLUNKERS%20PROGRAM%20ELIGIBILITY%20CH ART.pdf

[Sanslines]

An update on the Cash For Clunkers Program:



"Hmmm ...the math is in on Cash for Clunkers....


I guess I must be on the wrong page...

A vehicle getting 15 mpg and 12,000 miles per year uses 800 gallons a year of gasoline.

A vehicle getting 25 mpg and 12,000 miles per year uses 480 gallons a year.

So, the average Clunker transaction will reduce US gasoline consumption by 320 gallons per year

They claim 700,000 vehicles - so that’s 224 million gallons per year.
That equates to saving a bit over 5 million barrels of oil per year. I repeat – per YEAR.

5 million barrels of oil is about ¼ of one day’s US consumption.

And, 5 million barrels of oil costs about $350 million dollars at $75/bbl.

Our Government “gave” each Clunker Trader $4,500 per car for 700,000 transactions which cost US Taxpayers $3,150,000,000 – not including Washington’s astounding Administrative costs.

So, we all contributed through our taxes to spend more than $3 billion to save $350 million.

What kind of responsible use of taxpayer money is that!"

[Kouak]

So, we all contributed through our taxes to spend more than $3 billion to save $350 million.

What kind of responsible use of taxpayer money is that!"

Was the program only to save money on gas? If true, then your math does raise serious eyebrows! Funny, I thought it was more of a program to get Detroit working again.

Now on that front, it did have partial success. Detroit did start up production again. Most dealers are reporting that sales in September are dismal since much of the buying has already happened. The dealers are just buying new models to replenish their lots. This did not appear to have jump started a sustainable buying spree.

Plus it has been reported that non-Detroit manufacturers sold much more cars than Detroit did. So redo your math and also figure out how much of the $3 billion went to help car makers overseas. :(

[Sanslines]

So redo your math and also figure out how much of the $3 billion went to help car makers overseas. :(

Sorry, but I can't take credit for the math as it is not my math to redo. You do bring up a good point about how much money was spent on domestic manufacturers versus foreign manufacturers. I'll take a look to see if I can find anything that breaks down who received the money.

[Naturist Mark]

So, we all contributed through our taxes to spend more than $3 billion to save $350 million.

$350 million per year.

And why denominate the 224 million gallons of fuel saved according the cost of unrefined crude? At today's average price for gasoline the cost savings is $552 million per year.

Now consider the savings in the externalities that are not included in the price of fuel - namely the ecological and medical costs due to pollution. Not to mention the cost of military spending (and wars) that are ultimately aimed at keeping the oil flowing. Externalities are the costs that a product incurs on others that is not borne by the producer or buyer of the product. For instance, Exxon doesn't have to pay for the costs that the pollution produced by each gallon of gasoline it sells causes, but ultimately we all pay. A definitive quantization of the externalities in gasoline is difficult to calculate, depending on assumptions the totals can run from $0.75 to around $10 per gallon (http://www.hybridcars.com/news/real-cost-gallon-gas-835.html), or even higher (http://www.progress.org/gasoline.htm), but a reasonable calculation (http://www.thirdworldtraveler.com/Oil_watch/RealCost_GallonGas.html) in 2006 puts it at $1.74 per gallon - which is a pretty low ball figure, but for this calculation we'll use it rather than one of the larger values.

A reasonable (low ball) value for externality savings is $390 million per year.

The combined savings is now $942 million per year. Which means that the "Cash for Clunkers" program pays for itself in just 3 and 1/3rd years. (Or 1 and a quarter years if we go with a $10 per gallon externality cost.) The average lifespan of a new vehicle is 12 years.

And that doesn't even take into account the effect of the sales on dealers and their employees, not to mention car makers (unfortunately including those abroad - I still don't understand why we didn't limit the program to domestically manufactured cars). Still, it is unquestionable that this was one of the most effective "stimulus" programs ever instituted, and one that saves us substantially more than its cost in just a few years.

[Kouak]

Now consider the savings in the externalities that are not included in the price of fuel - namely the ecological and medical costs due to pollution. Not to mention the cost of military spending (and wars) that are ultimately aimed at keeping the oil flowing.

Hey, the Iraq war cost us $10 billion per month. Now redo your math and add it $120 billion per year!!!

Still, it is unquestionable that this was one of the most effective "stimulus" programs ever instituted, and one that saves us substantially more than its cost in just a few years.

I have read reports that the $4500 per car may have been way too high. Considering the demand, some people wonder if $2000 would have been enough incentive, or even only $1500.

[Naturist Mark]

Hey, the Iraq war cost us $10 billion per month. Now redo your math and add it $120 billion per year!!!

The "reasonable low ball" (http://www.thirdworldtraveler.com/Oil_watch/RealCost_GallonGas.html) estimate of externalities assumes an annual combined cost for both wars (Iraq and Afghanistan) as $100 billion per year. AND it includes $49 billion per year cost for the military to secure and protect the flow of oil through the Persian Gulf. Arguably the war in Afghanistan is not primarily due to oil (although there certainly IS an oil component to it - pipeline route politics, Saudi oil money funding terror and the Taliban - even though Afghanistan is not an oil producer). You can make a cogent argument for raising or lowering the $149 billion per year military externality component, but as a ball park figure this works.

[Sanslines]

And that doesn't even take into account the effect of the sales on dealers and their employees, not to mention car makers (unfortunately including those abroad - I still don't understand why we didn't limit the program to domestically manufactured cars). Still, it is unquestionable that this was one of the most effective "stimulus" programs ever instituted, and one that saves us substantially more than its cost in just a few years.

My actual criticism of such a program is that we did not better prepare for such a program. We should have allowed many high mpg vehicles that exist overseas but are banned for domestic entry into this country. For example, I have driven some wonderful Peugeot amd Renault vehicles overseas that get 55mpg. Such vehicles are perfectly safe and yet are not permitted into this nation. We claim 'safety issues' but the real reason appears to be that such vehicles would further decimate our domestic auto industries.

[NudeTopher]

My actual criticism of such a program is that we did not better prepare for such a program. We should have allowed many high mpg vehicles that exist overseas but are banned for domestic entry into this country. For example, I have driven some wonderful Peugeot amd Renault vehicles overseas that get 55mpg. Such vehicles are perfectly safe and yet are not permitted into this nation. We claim 'safety issues' but the real reason appears to be that such vehicles would further decimate our domestic auto industries.

While it's true that all cars must meet certain minimum safety standards for the US market (regardless of being domestic or imported) as an individual you can import any vehicle. The car must be updated while it is in bond to meet both crash and pollution standards.

But, that is beside the point. The reason that neither Peugeot or Renault are not currently sold in the United States is a direct result of capitalism; they didn't sell well enough to be profitable to either the manufacturers or the dealer bodies.