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Cash For Clunkers Auto Sales Stimulus and Twitter Feed


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.

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." RSS Feed

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Comment Wall


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Comment by Ralph Paglia on July 31, 2009 at 8:12am
Joe, based on today's early reports, I believe the administration and the congress will be forced to put back in the $3.5B that was stripped out of the C.A.R.S. funding right before it was sent to Obama for signing into law as part of a much larger bill. The effectiveness of the program has now been proven and the government has FINALLY found a stimulus program that actually STIMULATES the economy!

Comment by Joe Angrisano on July 31, 2009 at 7:48am

Ralph is correct it looks like it's been suspended for now.

We put together two articles and a video report together on one of our Micro-sites.

For the full report please Click HERE.

It's a quick read that aggregates dealer experiences, clunker reporting and a recent video/news report.

Contributors were the Associated Press, Boston Globe and Bloomberg

Comment by Tom Nicholl on July 30, 2009 at 9:02pm
White House says program will not be suspended.
Comment by Ralph Paglia on July 30, 2009 at 7:58pm
Imagine how the dealers who punched in 100 deals from the first half of July feel right now... Pretty darned smart, huh?

I knew about this yesterday, which is why my late night post criticized dealers who waited until after July 27th to get started! I knew that enough cars had been sold and were waiting get punched in that as soon as the system was able to take the deals, the money would be gone in hours.

The smart dealers will be the ones that figure out how to promote "Cash For Clunkers is available at ABC Motors!". With all the screwing that dealers have gotten from GM and Chrysler this year, congress will be forced to put back the $3.5B they took out of the original CARS bill... Again, the smartest dealers will have their deals ready to be punched in the first day the money gets turned on again.

I feel sorry for those that said they wanted to wait to promote the program until after the NHTSA posted the official rules... Once again, Congress makes the rules, the bureaucrats at NHTSA only administer them!

Comment by Tom Nicholl on July 30, 2009 at 5:03pm
Cash for Clunker Program on HOLD
Comment by Brian Pasch on June 27, 2009 at 8:09am
While dealers wait for the final rules I suggest that they use these 3 weeks to create a strong organic marketing plan. We have been helping dealers create press releases, blog posts and profile pages on to get ready for the big push at the end of the month.

A good organic plan combined with the ADP SEM services would give dealers the perfect 1-2 punch. I have already seen the PPC prices go up in the last week. GM, Ford and Toyota have a big national PPC push going on.

I also believe that getting a list of consumers who qualify in your hands and nuturing them over the next 3 weeks will be a key to good rentention.
Comment by Ralph Paglia on June 26, 2009 at 7:16pm
Let's see, what do you think the following statement may have meant:
"Rules for dealer participation in the program will be issued by the NHTSA within 30 days of June 24, 2009."
Comment by Ralph Paglia on June 26, 2009 at 7:13pm
Tom, my crew at ADP is getting orders from dealers every day who are launching Cash For Clunkers Ad campaigns because they are counting on the majority of other dealers to NOT DO ANYTHING... Meanwhile, the #1 most searched for automotive phrase in the USA on Thursday was "Cash For Clunkers". Down The Road Motors is hoping that your store and every other dealership decides to do nothing, while they field phone calls, showroom traffic and web forms submitted by consumers who are seeking information. As they engage the customers most interested in the program, and sell cars to the majority who probably are better off without the CFC scrappage requirements... Not only that, but this is not some factory program this is L-E-G-I-S-L-A-T-I-O-N and that means that not only are the rules specified in crystal clear legal documents, otherwise known as an Act Of Congress, but they are fairly simple to understand if you just read the damn thing!

When you do, you will then soon find out that most customers who are qualified to finance a new vehicle, are NOT driving a 20 year old hoopdie with a clear title... AND, you must subtract the ACV from the $3500 or $4500 in order to calculate the true value of any money the dealer may or may not get from the federal government. What we have hear is the largest "Push, Pull or Tow Your Trade-In and We'll Give You At Least $3,500 Allowance" Sales Event in the history of the car business!

Comment by Tom Nicholl on June 26, 2009 at 2:02pm
I talked to NHTSA today, they currently do not have a method for dealers to register for CARS. (Required by law). Be sure to register your e-mail address for updates at

Comment by Tom Nicholl on June 26, 2009 at 2:00pm
Does anyone else think it is a bad idea to launch a program on the 1st and then clarify the rules on the 24th?

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