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Cash For Clunkers Auto Sales Stimulus and Twitter Feed

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Cash For Clunkers Auto Sales Stimulus and Twitter Feed

This group is for all things related to the Federal Government's Cash For Clunkers Auto Sales Stimulus legislation which creates a $1,000,000,000 fund to drive increased new car sales.

Website: http://twitter.com/cashforclunker
Location: Washington, DC
Members: 91
Latest ADM Activity: Sep 14, 2011

Cash For Clunkers Facts and How It Works

Curious exactly how the Cash For Clunkers bill works? This handy chart and fact sheet provide all you need to know about trading in a beater Isuzu for a shiny new car.

At first, a look at the chart gives the impression there's a lot of money to be made by trading in your old car for a new one. Unfortunately, the compromises in this bill make it unlikely many people will be able to utilize it and save a great deal. There are two factors working against making this a worthwhile proposition and they both have to do with the logic of the bill.

First of all, operable vehicles are required and there aren't many people driving around with vehicles worth less than $1,500. Many old crappy cars, in fact, can still demand up to $2,500 on the open market. This means you're going to get, max, $2000 for your trade-in. The least valuable qualifying cars, of course, are actually the more efficient compact vehicles, which makes getting the necessary 10 MPG improvement unlikely.

The second problem, stemming from the first, is quantifying the number of people who actually drive around in cars worth less than $2,500 and can actually afford a new car. Our instinct tells us there aren't many people. This means people taking advantage of the program will, typically, have to be excited by the prospect of saving $1,000 or $2,000. These people should already have been swayed by intense discounting from automakers in recent months.

This isn't to say there aren't people who won't be able to get money from the program because, say, they have an old light duty truck and have been meaning to trade up to a newer car for a while. But the greatest number taking advantage of this deal may be people who can afford a new car and have, for one reason or another, decided not to buy one. These people will likely be lured in by dealers combining the $4,500 voucher with $2,000 in additional savings for big numbers like "$6,500 off a new Focus" that ignore the actual original value of the trade-in.

Either way, the promise of raising car sales by 1,000,000 units this year depends heavily on people with either poor mathematical abilities or an irrational fear of new car dealerships.

Cash For Clunkers Fact Sheet
"The CARS program is established at National Highway Traffic Safety Administration under the Department of Transportation (DOT). DOT is required to promulgate regulations to implement the program within 30 days. The program will run for one year from the date the regulations are promulgated. The program is authorized for $4 billion which will provide for the purchase of approximately one million new vehicles.

Older Trade-In Vehicles:
* Must be in drivable condition;
* Have been continuously insured to the same owner for at least one year immediately prior to trade-in;
* Manufactured in model year 1984 or later; and
* Have a combined fuel economy of 18 mpg or less.

New Vehicles (divided in to 4 categories) - The mpg values are EPA combined city/highway fuel economy as posted on the window sticker of the new vehicle.

Passenger Cars: New passenger cars with mileage of at least 22 mpg are eligible for vouchers. If the mileage of the new car is at least 4 mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new car is at least 10 mpg higher than the old vehicle, the voucher will be worth $4,500.

Light-Duty Trucks: New light trucks or SUVs with mileage of at least 18 mpg are eligible for vouchers. If the mileage of the new truck or SUV is at least 2 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck or SUV is at least 5 mpg higher than the old truck, the voucher will be worth $4,500.

Large Light-Duty Trucks: New large trucks (pick-up trucks and vans weighing between 6,000 and 8,500 pounds) with mileage of at least 15 mpg are eligible for vouchers. If the mileage of the new truck is at least 1 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck is at least 2 mpg higher than the old truck, the voucher will be worth $4,500.

Work Trucks: Consumers can trade in a pre-2002 work truck (defined as a pick-up truck or cargo van weighing from 8,500-10,000 pounds) and receive a voucher worth $3,500 for a new work truck in the same or smaller weight class. Vouchers are limited to 7.5 percent of total funds. There are no EPA mileage measures for these trucks; however, because newer models are cleaner than older models, the age requirement ensures that the trade will improve environmental quality. Consumers can also "trade down," receiving a $3,500 voucher for trading in an older work truck and purchasing a smaller light-duty truck weighing from 6,000 – 8,500 pounds."

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Comment by Ralph Paglia on August 25, 2009 at 8:12am
Message to Auto Dealers from the Department of Transportation:

The CARS website has been fully operational overnight and will remain open
for dealers to submit sales documentation until 8:00 p.m. EDT this evening.
After that time, the system will be closed to new submissions. The deadline
for completing new deals has already passed, so no dealer or consumer
should agree to a CARS transaction today.

Due to high user demand, dealers may experience some delay in accessing
the system at peak times. If this occurs, dealers are requested to try again in
30 minutes.

NHTSA Headquarters
1200 New Jersey Avenue, SE | West Building | Washington, DC 20590
Toll-Free: 1-866 CAR-7891
Hearing Impaired (TTY): 1-800-424-9153 Media inquiries: 202-366-9550
Comment by Tom Nicholl on August 6, 2009 at 7:33pm
$2 Billion More on the Way!

http://bit.ly/1SdHJv

Media
Comment by Joe Angrisano on August 3, 2009 at 9:18am
OK... Am I absolutely CRAZY or does this article make everyone's blood BOIL Too???

Cash for Clunkers is a DROP IN THE BUCKET compared to Hundreds of Billions wasted in Obamas stimulus program correct? Now for some inane reason both Democrats and Republicans are having problems with Clunkers and it worked IMMEDIATELY!

What's going on folks?

++++++++++++++++++++++++++++


House rushing to fix 'Clunkers' but Senate GOP looking to turn off ignition

BY Bill Egbert and Michael Mcauliff In Washington
DAILY NEWS STAFF WRITERS

Monday, August 3rd 2009, 4:00 AM
Pedroncelli/AP

Dealerships have been getting creative in their promotion of the "Cash for Clunkers" program.
Related News
Articles

* City dealers say auto rebate program is sparking sales
* Clunkers rolling in, deals rolling out
* Hit and miss at dealerships: Owners try staking claim to 'cash for clunkers'

Republican Senators are vowing to turn off the gas pump on the wildly popular "Cash for Clunkers" program, saying it's just another bailout that heaps debt on future generations.

The program, which lets people turn in their old gas guzzlers and get up to $4,500 to buy a new, more fuel-efficient car, will be suspended tomorrow if the Senate fails to extend it.

Dealers rang up 250,000 sales in just a week, quickly using all of the $1 billion set aside for the program. Ford reported it sold more cars in July than the same time last year. Transportation Secretary Ray LaHood said the government will honor all "Cash for Clunkers" deals through the end of Tuesday.

The House of Representatives rushed late last week to pass $2 billion more and it is now up to the Senate, where Republicans and Democrats are balking.

"This is crazy to try to rush this thing through again while they're trying to rush through health care," Sen. Jim DeMint (R-S.C.) said. "We've got to slow this thing down."

DeMint vowed to work with Sen. John McCain to put on the brakes, saying, "The federal government went bankrupt in one week in the used-car business."

"I just think this is a great example of the stupidity that's coming out of Washington right now," he said on "Fox News Sunday." "Our children and grandchildren can't afford to make these car dealers well right now."

But the clunker program got a thumbs up from economic icon Alan Greenspan, who said it's been a well-timed economic turbo-charger that shows Americans are more optimistic.

New York Sen. Chuck Schumer said not only does the program need refueling, it's time to hit the gas and double funding to $4 billion. He shot down complaints that it was bailing out the car industry.

mmcauliff@nydailynews.com

Influencer
Comment by David Ruggles on August 2, 2009 at 8:47pm
I'm old enough to remember when Chrysler and Joe Gargiola led us out of the 1974 -1975 recession with "Buy a Car, Get a check!" Then the domestics brought us out of the 1979 - 1982 recession with rebates AND interest subventions. Didn't GM yank us out of the post 911 malaise with "Keep America Rolling?" The U. S. Auto Industry has historically been a leading indicator in an economic recovery. I sure hope it is again this time around!

The difference now is that the Domestics control a lot less of the market. Another difference is that the government is involved this time. There was a lot of pent up demand as people froze upon rumors of Cash for Clunkers when it first started being discussed. That paralysis contributed to the 9 million SAAR we have endured recently. In addition, the program pulled a lot of deals from the future. What happens after the money has truly run out and the program is officially over will indicate whether or not the pace of sales is sustainable in any way. Perhaps we find out that folks will stop purchasing as they wait for whatever the next program is. We know that a lot of taxpayer money has been given to folks who were going to purchase anyway. I wish someone could develop an accurate statistic as to how many of the sales were directly attributable to the C for C proposition.

Here's hoping that momentum will stay on our side and begin to yank the rest of the economy out of its doldrums.

Influencer
Comment by Keith Shetterly on August 2, 2009 at 8:31am
The first billion was aimed at 250,000 car sales (average $4000 between the $4500 and the $3500). 23,000 or so dealerships puts that at about 11 cars a piece, average. Four billion just means 44 cars average.

That doesn't mean you can only 44 new cars, it just means that's the average. And a pretty low number, imho.

Influencer
Comment by Michael Benavides on August 1, 2009 at 2:29pm
I would not be surprised if, due to the enormous consumer response to the rebate program, Congress decided to make more efficient use of any further funding by increasing the MPG requirements and/or decreasing the rebate value. If the Fed's goal is really to upgrade the U.S. fleet, they'll need to make this a 2yr program, at minimum.

Autodata has developed a syndicated Cash for Clunkers web calculator that will qualify a trade-in vehicle and show users which new models qualify for $3500 or $4500. Goto AutoNation.com and click on “Do I Qualify” in the C.A.R.S. section to check it out (although some functionality has been disabled until the program is re-funded next week).

We also manage the only detailed database of regional OEM incentives for the U.S. and Canada, so consumers can get the "big picture" of total savings.

Influencer
Comment by Jennifer Schrader on July 31, 2009 at 8:42am
I wonder "Should Auto Dealers Run the US"?? What I mean by that is dealers nationwide have proven the benefits of this program and taken full advantage of it. They did not sit on the $funds$ and throw a penny here, penny there etc, while our current *G*V*M*T sits in their fully powered leathered up massage chair laughing it up while our economy gets shot down.!!

Our dealers are on their feet, running, advertising and much more to help boost the economy!! They don't have time to sit and laugh, they are making a deal happen!

Dealers have knocked one out of the park and shown the benefits of this program!! I think it would be so careless for our Dealers to be stripped of it. At least our Dealers are doing something about it.

I agree with Ralph with the Government finally found a way to stimulate the economy, the dealers helped place it into action!

Can you imagine the government with a Car Dealer Mind??? I wonder??
Comment by Bob Gallagher on July 31, 2009 at 8:35am
Cash for Clunkers - Pros are that it does in fact add to the economic stimulus as Ralph pointed out and dealers are moving inventory! However, there are some aspects that have the aroma of an Automotive Fannie Mae and Freddie Mac....people are getting into cars they really can't afford....and could end up upside down or worse - just a thought. Overall if they can keep the program going and stay true to its roots it works!
FYI: If your in MA push for a SALE TODAY - Sales Taxes GO UP TOMORROW!
Comment by Tom Nicholl on July 31, 2009 at 8:24am
Cash for Clunkers is guaranteed though the weekend.

http://bit.ly/LU7UY

KFI 640 in Los Angeles reports that Congress is working on injecting an extra $2 Billion into the program and possibly changing the dollar amount for each vehicle.

We were up until midnight last night delivering deals.
Comment by Ralph Paglia on July 31, 2009 at 8:14am
Government scrambles to avoid Cash for Clunkers suspension
Shortly after launching, the $1 billion Cash for Clunkers program may be almost spent out. Administration weighs next step.
By Jennifer Liberto and Peter Valdes-Dapena, CNNMoney.com senior writers
Last Updated: July 31, 2009: 10:51 AM ET

NEW YORK (CNNMoney.com) -- This much seems certain about the Cash for Clunkers program: Consumers are happy to take government rebates to buy new cars.

Other than that, confusion reigned Friday morning.

The fate of the $1 billion trade-in program was up in the air over concerns that it may have already burned through its funds less than a week after it was officially launched.

And it was unclear how much longer car buyers would be able to trade in clunkers after reports surfaced on Thursday night that the program would be suspended.

On Friday, the Obama administration said it was working with Congress to try to get more money and that Clunkers deal certificates would be honored through the weekend.

"The program will be in place" for anyone who had been planning to make a car purchase this weekend, White House spokesman Robert Gibbs told CNN. "This program appears to be a success for car buyers, car dealers, car companies and taxpayers."

One of the program's main champions in Congress, Sen. Debbie Stabenow, D-Mich., told CNN that the Michigan, Ohio and Indiana congressional delegations are working on a $2 billion extension of Clunkers program.

Stabenow had said the effort has provided an important boost to the economy and resulted in 200,000 car sales.

"I am delighted to hear dealers say that all of their salespeople are busy and they are selling more cars in a day than they had been selling in a month," Stabenow said.

Meanwhile, the Transportation Department was sorting out how much of the plan's funds have already been committed.

Cash for Clunkers, which Congress passed in June, is set to end on Nov. 1 or whenever its $1 billion budget has been depleted. An early version of the Clunkers proposal before it passed Congress called for appropriating $4 billion.

On Friday morning, the government's official CARS.gov Web site, set up to provide dealers and consumers with information about the plan, still showed $780 million remaining in the coffers.

But many deals are still waiting to be processed, according to dealers.

Brian Benstock, president of Paragon Honda in Woodside, N.Y., said his dealership had already written 60 Clunker deals since July 1, the earliest date from which deals would be accepted.

One deal was signed at 11:55 p.m. last night, Benstock said, after reports had circulated indicating that the program might be suspended.

"We're telling the customer, 'We're the only dealer open on Northern Boulevard. You're got four minutes,' " he said.

The customer traded in a an old Mitsubushi Diamante sedan for a new Honda CR-V crossover SUV.

Benstock said he was surprised to hear the program might have reached its limit already. Like many dealers, he said, he had already purchased advertising in Friday's newspapers and he had sent out 176,000 direct mail cards to owners of qualifying Clunkers in his area.

"Can you imagine the position we were in last night?" he said. "We had 176,000 missiles in the air and we're hearing it's cancelled."

Bob Goldberg, general manager of Premium Nissan in New Rochelle, N.Y., said he had already given discounts totaling $27,000 on six Clunker deals when he heard the reports late Thursday.

"I didn't sleep at all last night," Goldberg said. "I feel terrible. All of a sudden the money's gone. It's a little nerve wracking."

Under the plan as enacted, vehicles purchased after July 1 will be eligible for refund vouchers worth $3,500 to $4,500 on traded-in gas guzzlers. The trade-in vehicle has to get combined city and highway fuel economy ratings of 18 miles per gallon or less.

The program aims at helping the struggling auto industry by taking inefficient cars off the road and spurring new sales.

"With this program, we are giving the auto industry a shot in the arm and struggling consumers can get rid of their gas-guzzlers and buy a more reliable, fuel-efficient vehicle," Transportation Secretary Ray LaHood said in a statement Monday.

Domestic auto sales have been hit hard by the recession and credit crunch and helped propel the bankruptcies and government bailouts of General Motors and Chrysler. In June, the seasonally adjusted annual sales rate fell to 9.7 million, a pace well below recent years.

--CNNMoney.com staff writer Aaron Smith and CNN's Ed Henry contributed to this report. To top of page
First Published: July 30, 2009: 8:39 PM ET
 
 
 

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