Comments on: “Cash for Clunkers” RIP

By: Charles Moreira

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By: Samual Witchey

Samual Witchey — Sat, 31 Jul 2010 05:34:11 +0000

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By: Jamie Pontius

Jamie Pontius — Sat, 23 Jan 2010 08:45:02 +0000

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By: Kathy Twisselmann

Kathy Twisselmann — Wed, 28 Oct 2009 02:22:38 +0000

I missed your article on the Cash for Clunkers when it first came out. Now, I have just read something I think you’d find interesting.

The UCDavis Magazine printed an article (Fall, ’09) titled A Costly Way to Cut Carbon. It reported that UCD Associate Professor of Economics Christopher Knittel studied the cost per ton of reducing the greenhouse gas CO2 via the Cash for Clunkers program. The article states that the program was paying “at least 10 times the ‘sticker price’ to reduce emissions of the greenhouse gas carbon dioxide”. Carbon credits will be sold for about $28 per ton in the U.S.. The article said Knittel concluded that “even the best-case calculation of the cost of the clunkers rebate is $237 per ton” of reduced carbon dioxide. “More likely scenarios” of driving habits and mileage estimates led to estimates in excess of $500 per ton, “even when we accounted for reductions in pollutants other than greenhouse gases.” Knittel is also a faculty associate at the UCD Institute of Transportation Studies and serves the university’s Sustainable Transportation Energy Pathways Program as the policy and business strategy leader.

By: Rich

Rich — Tue, 06 Oct 2009 04:00:01 +0000

So let’s see…

You got $3500 to $4500 for your ‘clunker’ If your clunker was worth $3500 and the feds gave you $4500, OH boy, you think you made $1000

The dealer raised their selling prices at MSRP ($2000 to $3000) for the new car you could buy at a lower negotiated cost. However, you have to pay taxes on the $4500 come April 15th (something that no auto dealer will tell you). If you are in the 30% tax bracket, you will pay $1350 on that $4500.
So, rather than save $1000, you actually pay an extra $350 to the feds plus you probably traded in a car that was most likely paid for. Now you have 4 or 5 years of payments on a car that you did not need. I’ll bet that old car was costing you less to run than the payments that you will now be making.
But hold on, you also got ripped off by the dealer.
For example, The Ford Focus with all the goodies sold for $12,500 the month before the “cash for clunkers” program started. When “cash for clunkers” was offered, the dealers stopped discounting them and sold them at the MSRP price of $15,500. So, you paid $3000 more than you would have the month before. All the dealers played this game when the ‘clunker’ program came along.

So here’s what it cost the buyer:

You traded in a car worth $3500
and got a discount of: $4500
Net so far +$1000

But you have to pay: $1350 in taxes on the $4500
Net so far: -$350

And you paid: $3000 more than the car was selling for the month before
Net -$3350

So who actually made out on the deal? The feds collected taxes on the car along with taxes on the $4500 they “gave” you. The car dealers made an extra $3000 or more on every car they sold along with the kickbacks from the manufacturers and the loan companies. .

Obama and his band of merry men convinced Joe consumer that he was getting $4500 in “free” money from the “government” when in fact Joe was giving away his $3500 car.

By: Edward

Edward — Fri, 04 Sep 2009 23:33:49 +0000

Jane,

I’ll be quick to the point: OBAMA HAS SOLD US A BUNCH OF ROTTEN LEMONS! And no, I didn’t fall for his quackery!

By: Jane Chastain

Jane Chastain — Fri, 04 Sep 2009 22:22:40 +0000

Someone has. Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,475 per vehicle sold in August 2009, down $231, or 8.5 percent, from July 2009, and down $327, or 11.7 percent, from August 2008.

“In March, the industry spent a record $3,165 per car, but since that time incentives have continuously fallen,” stated Jessica Caldwell, Director of Industry Analysis for Edmunds.com. “Supply is low right now since Cash for Clunkers depleted the small inventories generated during shortened production runs earlier this year, but I expect we’ll be telling a very different story in the months to come.”

If you go to the Edmunds website and check under “Press Release” you will find other CFC data.

A press release for July 27 states: Edmunds.com, the premier online resource for automotive information, has determined that even if Cash for Clunkers reaches its budgeted cap, the program will only help drive about 50,000 incremental new car sales, so each one will cost taxpayers a whopping $20,000.

How is this possible? Edmunds.com’s research shows that typically 200,000 vehicles worth less than $4,500 are traded in for new vehicles every three months. At best the current Cash for Clunkers program will fund 250,000 such transactions in the same time period — a gain of only 50,000 vehicles. Given that this program is budgeted to cost $1,000,000,000, this increase will come at the cost of $20,000 per extra sale.

“The incremental sales will be limited and at a considerable cost. In effect, we are paying consumers to do something most would do anyway,” said Jeremy Anwyl, CEO of Edmunds.com. “So as a stimulus, the program fails. One could make a slightly stronger argument about the environmental benefits, but even there, the program could have been better designed.”

By: Yale Woodford

Yale Woodford — Fri, 04 Sep 2009 21:57:30 +0000

Jane, you raise excellent points regarding the clunker cars. But in all the official excitement over the environment and manufacturing jobs, why hasn’t anybody looked into the prices of those cars? If dealers are the opportunists I believe, they raised the prices three or four thousand dollars the minute they learned of the rebate — so that the buyers are not getting a bargain at all, despite the subsidy from us taxpayers.

By: fishydude

fishydude — Fri, 04 Sep 2009 17:36:23 +0000

Hello Ms. Chastain;
Once again you nailed it.
We did not jump into the C4C debt wagon, though on the surface it could seem tempting.
We have two Jeeps with over 175K miles on each. A 1993 Wrangler (my toy) and a 1999 Cherokee for family stuff. My son is already too tall for the back seat of the Cherokee. He is only 14 and not done growing yet. My daughter will be too tall very soon.
So there is a modicum of justification to buy a new vehicle. But there are only a handful of vehicles that claim 30MPG highway that will fit our family. None that claim higher than that. Minivans don’t get more than 24 or 25MPG highway.
But Our Dear Leader has the audacity to demand that the average fuel efficiency be increased to 38MPG.
Where this leads me is to the belief that Our Dear Leader sees C4C and increasing CAFÉ as part of his plan to reduce the health care expenditures.
C4C bribed people into buying smaller, less safe cars than they would otherwise have bought, trading in the larger safer cars. Down the road, he is trying to eliminate choice for the normal families in a way that could force the need to buy and drive two cars because one family size car will be so expensive.
The end result will be more crash fatalities. And fatalities cost less to treat than crash survivors.
I have been in two crashes in my Jeep Wrangler. One when a Honda Civic lost control on the highway and came straight across my lane. The Honda waste totaled. I had less than $800 in damage. Luckily there was no passenger in the Honda because that seat was crushed. I can only imagine how bad it would have been if I was driving something just a little bigger. There were no serious injuries this time. Thank God.
The solution from the left is to ban big vehicles. Absent that, make bigger vehicles so expensive that only the wealthy and ruling elite can afford them.
But that won’t change the fact that the odds of dying in a single vehicle crash are 3 times higher in a small car, like the Toyota Yaris, than even a midsized car, like a Ford Taurus.
I can’t even fit in a Yarus, never mind my whole family. But that is what Our Dear Leader is trying to push.

Bro’ Ken. It is the union that sane people have a problem with. Not the line workers. Unions exist for only one reason today. Extort wages and benefits far above market rate and suck union members dry while the union execs live high.
Heavy handed regulation pushed manufacturing out of the US just as regulation is responsible to the shortage of doctors, nurses and the high cost of medical treatment. Large companies contribute and unions because they know that regulations keep smaller non-union competitors out.