Cash For Clunkers

[J.]

Well, the program is working as intended. A couple of coworkers have already taken advantage of it, although one guy in particular was frustrated because he wouldn't save any money in the long run. He was going to trade in old pickup for a smaller, more fuel efficient one, but the dealer jacked up the price when the clunker program came out. The truck he was looking at was priced at $22k. Now that everyone and their dog is taking advantage of cash for clunkers, the same truck is tagged at $29k.

 

It's an artificial stimulus, which has created the inevitable artificial boom. Some makers are already ramping up production to meet increased demand. Of course when demand increases, prices go up, so the deals that people thought they might be getting might not be so sweet anymore. The problem is this - what happens when the money runs out? Demand will drop, causing the bust. If they continue to funnel cash into this thing, the bust will come sooner or later. Either the market will become saturated with new vehicles and demand will fall off, or prices will rise, having essentially the same effect. Unfortunately while the boom may be artificial, the bubble bursting will be very real.

[Ender_rpm]

Either the market will become saturated with new vehicles and demand will fall off, or prices will rise, having essentially the same effect. Unfortunately while the boom may be artificial, the bubble bursting will be very real.

 

 

This is my concern as well. I think the program is pretty smart, for any number of reasons, but it has to end sometime, and unless we get some more jobs created, there will be no one to buy cars.

[RSBro]

This is my concern as well. I think the program is pretty smart, for any number of reasons, but it has to end sometime, and unless we get some more jobs created, there will be no one to buy cars.

GM announced layoffs of 7,500 workers this AM who didn't take their buyout package.

Sounds rough!

I see it being comparable to the mini-mansion boom of the late 90's/early 2000's. The fallout ain't gonna be pretty, if even sustains that long to increase car manufacturing.

This would have been a good idea, like, 2 years ago, IMO.

[collinwho]

I found a nice alternative to the Cash for Clunkers if you are looking to trade in your old car: http://www.tonightshowwithconanobrien.com/video/clips/conan-please-blow-up-my-car-080309/1141603/

[Craig Vecchione]

 

Well, the program is working as intended. A couple of coworkers have already taken advantage of it, although one guy in particular was frustrated because he wouldn't save any money in the long run. He was going to trade in old pickup for a smaller, more fuel efficient one, but the dealer jacked up the price when the clunker program came out. The truck he was looking at was priced at $22k. Now that everyone and their dog is taking advantage of cash for clunkers, the same truck is tagged at $29k.

 

 

If it's any consolation, he'd have never driven off the lot with the "$22K" version of that truck. MSRP is MSRP. If $29K is above MSRP, anyone who falls for that price gets what they deserve. If it's MSRP, then feel safe knowing that the $22K advertised price last week was most likely one of those limited-time deals on just one particular vehicle that's magically "just been sold....but I've got something I think you'll like" bait-and-switch scams.

[ThudMaker]

It's THAT brand. You know... the one made by THEM! Those {censored}ers...

[J.]

If it's any consolation, he'd have never driven off the lot with the "$22K" version of that truck. MSRP is MSRP. If $29K is above MSRP, anyone who falls for that price gets what they deserve. If it's MSRP, then feel safe knowing that the $22K advertised price last week was most likely one of those limited-time deals on just one particular vehicle that's magically "just been sold....but I've got something I think you'll like" bait-and-switch scams.

 

As someone who used to be a dealer mechanic, it's very disheartening to hear you talk about how dishonest they are. I mean, I've always thought that most dealerships were slimeball habitats, but hearing it from the horse's mouth makes it that much worse. I've been on other boards where current car salesman talk about how honest they are and all the great deals they give people, but I've never heard a former employee talk that way.

 

I witnessed firsthand my sister getting screwed over when she did her lease deal.

[Kindness]

This list made me laugh. There must have been a lot of Ford Explorers out on the road.

 

The Top Ten Cash for Clunkers Trade-Ins:

1. 1998 Ford Explorer

2. 1997 Ford Explorer

3. 1996 Ford Explorer

4. 1999 Ford Explorer

5. Jeep Grand Cherokee

6. Jeep Cherokee

7. 1995 Ford Explorer

8. 1994 Ford Explorer

9. 1997 Ford Windstar

10. 1999 Dodge Caravan

[Incubitabus]

This list made me laugh. There must have been a lot of Ford Explorers out on the road. The Top Ten Cash for Clunkers Trade-Ins: 1. 1998 Ford Explorer 2. 1997 Ford Explorer 3. 1996 Ford Explorer 4. 1999 Ford Explorer 5. Jeep Grand Cherokee 6. Jeep Cherokee 7. 1995 Ford Explorer 8. 1994 Ford Explorer 9. 1997 Ford Windstar 10. 1999 Dodge Caravan

If I take advantage of it, I will be adding another #4 to the tally...

I'm thinking Chevy Malibu (my parents have GM credit I can use), Volkswagen CC (I get a nice discount through work) or a Nissan Altima. Anyone have experience with any of the above?

[Crescent Seven]

This list made me laugh. There must have been a lot of Ford Explorers out on the road. The Top Ten Cash for Clunkers Trade-Ins: 1. 1998 Ford Explorer 2. 1997 Ford Explorer 3. 1996 Ford Explorer 4. 1999 Ford Explorer 5. Jeep Grand Cherokee 6. Jeep Cherokee 7. 1995 Ford Explorer 8. 1994 Ford Explorer 9. 1997 Ford Windstar 10. 1999 Dodge Caravan

I don't know how it is in other places, but I can't recall ever meeting a Ford Explorer owner that wasn't absolutely DYING to get rid of it.

In the Denver area, when you drive down the boulevards, the car dealers are packed to the gills with Jeep Grand Cherokees, they're the cheapest 4x4 option in this area. If thousands of people in CO are trading in Grand Cherokees, it's a merciful thing that they're scrapping them, at least for anyone that owns a small used car lot. If those things hit the market we'd be buying them for $1000 all damn day.
C7

[lug]

I don't know how it is in other places, but I can't recall ever meeting a Ford Explorer owner that wasn't absolutely DYING to get rid of it. In the Denver area, when you drive down the boulevards, the car dealers are packed to the gills with Jeep Grand Cherokees, they're the cheapest 4x4 option in this area. If thousands of people in CO are trading in Grand Cherokees, it's a merciful thing that they're scrapping them, at least for anyone that owns a small used car lot. If those things hit the market we'd be buying them for $1000 all damn day. C7

kinda leads to another question. I sold a Camaro last yeart for about $1000. If this program existed, I'd have used it on a trade in instead (something like a $10K Kia with $4500 off would be hard to pass up). What do you think this will do to the price of cheaper used cars?

[beginner01]

...and every other manufacturer offering a fuel-efficient (relatively speaking) vehicle for under $45,000 MSRP via a domestic dealership. So congrats - you just said Toyota, Honda, Nissan, Volkswagen, BMW, Lexus, Mercedes Benz, and Volvo are going the way of the Dodo. Well done.

i must have missed teh part where American taxpayers



bailed them out too





thanx prof.

[Crescent Seven]

kinda leads to another question. I sold a Camaro last yeart for about $1000. If this program existed, I'd have used it on a trade in instead (something like a $10K Kia with $4500 off would be hard to pass up). What do you think this will do to the price of cheaper used cars?

 

 

Tough to say. I drive a 94 Nissan Pathfinder that qualifies for the program. I paid $4200 for it almost 6 years ago. There's no way in hell I'd trade it in for a small car, but that has more to do with my location and hobbies than it does with anything else. If the government wanted to give me $4500 to go drop towards a $10k Kia, I'd probably take it and keep the P-finder as a rec vehicle.

 

CraigV raised an important point: that $4500 is going to be the only incentive you're going to enjoy on a new car. To get a Kia Spectra down to $10k, you need to qualify for about 6 different programs; military discount, college grad, etc. So the reality is, you're going to pay the full $18k for the Kia Spectra. Getting $4500 off of that is a good deal, but for someone like me, it's still not enough incentive to take the deal. Especially on a $22k+ sedan.

 

I've been casually looking at CL for a small econobox hatchback, and the savings I would see by buying a 10 year old Subaru simply cannot be matched by a $4500 government subsidy. IMO, only silly fools buy brand new cars in the first damn place; if this subsidy applied to used cars, I might think about it. I bought a 2007 Kia Sorento in November of 2007, with 14k miles on it, for TEN THOUSAND DOLLARS less than they were selling for brand new. Anyone with a brain in their head can figure out that I got a better deal than someone who got $4500 off a brand new car...

C7

[King Kashue]

Transparent...eventually

 

"WASHINGTON

[brake]

I saw a picture via some Ford forums I frequent of a beautiful Fox body Mustang GT traded in as a clunker...looked to be in great shape too, but I guess V8s are destroying the earth, so.. they put that crushed glass {censored} in it and ran that beautiful 5.0 until it couldn't run anymore.

[King Kashue]

but I guess V8s are destroying the earth.

Yep...and that 500 pound paperweight of forged metal (not to mention the other 3000+ pounds of various metals and plastics) are totally much better for the Earth if we throw them out...

Particularly if we pile them in a big heap somewhere, nothing says "garden spot" than hundreds of thousands of pounds of consumer waste


I read an estimate today, the Cash for Clunkers net "carbon footprint" reduction is going to be roughly the equivalent of one hour of the US's yearly production...Yep, one 8760th of one year...Totally worth 1 Billion dollars...(and if anyone doesn't realize why they backed off the "green" aspects of the program when doing PR, that should explain it).

[ThudMaker]

So, either they've done the analysis and won't release it to the public...or, they're pressing Congress for a quick vote without having done the analysis first... I'm pretty sure I'm not happy with either option.

It sounds typical of DC. The voters should demand better from their reps.

[lug]

Yep...and that 500 pound paperweight of forged metal (not to mention the other 3000+ pounds of various metals and plastics) are totally much better for the Earth if we throw them out... Particularly if we pile them in a big heap somewhere, nothing says "garden spot" than hundreds of thousands of pounds of consumer waste I read an estimate today, the Cash for Clunkers net "carbon footprint" reduction is going to be roughly the equivalent of one hour of the US's yearly production...Yep, one 8760th of one year...Totally worth 1 Billion dollars...(and if anyone doesn't realize why they backed off the "green" aspects of the program when doing PR, that should explain it).

Haven't you heard? We govern by theories now.

[J.]

I wish I still had my first vehicle... 1985 Ford Econoline Cargo Van (E150). It did about 12mpg, and would just barely make it in under the age barrier. It would be worth about $200 today. No rear brakes, no parking brake, no radio, no horn, lots of rust, muffler with a huge hole... but hey, it ran. Drive that monster in and buy one of those goofy Chevrolet Aveos.

 

My sister and her soon-to-be husband went to look at cars this past weekend (they're going to buy outright, not do the Cash For Clunker thing), and the dealership they went to was packed with people. The salesman told them they probably wouldn't be able to test drive anything that day because of the backlog.

 

It's lame. Vehicle prices are going to rise (many already have) because of this artificially boosted demand, and people who wouldn't normally been in the market are going to pay the price.