Well it seems finally here.
-------------------------------------------
It appears Congress is close to reaching final terms on a “Cash for Clunkers” program, a stimulus effort that would give consumers up to $4,500 to purchase a new car. The catch? You have to trade in your old car. And your old car has to get terrible gas mileage.
On Tuesday, the House Committee on Energy and Commerce released a fact sheet outlining the terms of the plan. According to the document, passenger cars being traded in (i.e. the “clunker”), must get a combined EPA rating of less than 18 mpg. In order to be eligible for vouchers, new cars must get at least 22 mpg. Mileage improvements of at least 4 mpg will net consumers $3,500, while improvements of 10 mpg or higher pay the maximum of $4,500.
If you’re in the pickup truck or SUV market, life’s a little easier. Minimum fuel economy for new vehicles is pegged at 18 mpg, and mileage needs to improve only by 2 mpg to qualify for a $3,500 voucher; $4,500 vouchers come with improvements of 5 mpg. Requirements for large light-duty trucks (6,000 to 8,500 pounds) and work trucks (8,500 to 10,000 pounds) are even less stringent.
Similar programs have met with mixed success in Europe. German market auto sales are actually up, thanks to a plan in which consumers are entitled to incentives of about $3,000. Italy is offering up to $6,500 to participants that qualify, and Great Britain will write residents a check for about $2,900. Still, auto sales in the United Kingdom were down around 30% in March.
There’s only a limited time to act on the U.S. program ? it will run for only one year if passed by Congress,
-------------------------------------------
I guess this program is okay but I do not think they will accept my 88 Honda Accord. Its combined mpg is 24.
Will you trade yours in?
Note that the Senate version is a little different. This is obviously a combo fuel efficiency and economic stimulus package. To use round numbers, going from 20 to 24 mpg will only net net me $157 per year. It costs the government $3500 so maybe I will get a new car rather than keeping it for another 22 years.
No, Even If I’ve Got One. This Is Another Stupid Waste Of Tax Payer Dollars.
agreed.
This hurts 2 fold. One for the driver of the “clunker” in putting them in debt, and they’re likely driving it because they can’t afford monthly payments, or a new vehicle. Two, it takes away those cheaper used vehicles that someone only willing to pay cash for can buy(usually goes hand in hand with #1).
Neither of my cars qualify, so I’ll watch how it unfolds.
So what happens to the traded-in clunkers? Go on the used car market? Crushed? Will we be crushing…oh say, a Mustang 302 Boss?
Can I by an old clunker for $500 today and tomorrow trade it in and get $4,500 for it?
Do they ever think these things through?
The Key Word Is “Think”. Come On, These Are Politicians.
CSA
No, I believe the car has to be insured at least 12 - 18 months in your name. I have a 2000 Blazer with 104k miles that’s getting a little tired, but it’s paid for and running reasonably well. I’d rather save $4500 by buying a slightly used car that’s already taken a big hit in depreciation. I might be tempted in 2 or 3 years when the Blazer has another 30 or 40k miles and my wife’s van is paid off.
Now if the government wanted to give out $4500 for medical expenses I would be much more interested.
Ed B.
But the government hasn’t bailed out the medical companies yet
Yet.
Major Charity Organizations Are Speaking Out Against This Garbage,
They depend on people donating this type vehicle to their organizations.
I was reading that a group is forming to try and get the government to bail-out college loans of students/former students and just pay it all off. Unbelievable. I worked my way through 5+ years of college and had no debt. That’s how it’s supposed to work.
I will never be on the receiving end of any bail-out, but I’ll get the bill. All these stupid programs have unintended consequences. I can’t wait to vote in upcoming elections. I’m keeping track.
CSA
The engine and transmission must be removed and destroyed…The rest of the vehicle can be recycled as usable parts.
So, if you can afford to buy a new car the government is going to give you $4,500 tax dollars that it took out of my pocket?
And Your Children And Their Children And Their Children And . . .
I found some more info on this program:
Jun 23, 2009 – Cash for clunkers program gets the green light
The “cash for clunkers” program is taking form and promises rebates of $3,500 or $4,500 for trade-ins when you purchase a newer fuel-efficient vehicle.
The effective date for the program – officially known as the Car Allowance Rebate System (CARS) – has not yet been set. But Clark expects it to be sometime toward the end of July or the beginning of August. There should be a 2-month buying opportunity through October.
Let’s say you start from a baseline of 18 mpg on your current vehicle. If the new car you intend to buy gets 22 mpg or more, then you’d get the $3,500 voucher toward the purchase.
Please note that participating dealers will apply this taxpayer-subsidized credit directly to your purchase.
You’re only eligible for the full $4,500 voucher if your next purchase gives you at least 10 mpg more than your old vehicle.
Meanwhile, there’s a lower threshold for SUVs and trucks. You’ll get the $3,500 voucher if your new vehicle get 2 mpg or higher. If it gets 5 mpg or more, you then get the $4,500 voucher.
The vehicle you’re trading in has to be drivable and the dealer has to agree to crush it. There are also several rules to prevent abuse of the program. For example, the car you’re dumping has to have been registered and insured continuously for at least 12 months prior.
Other countries that have experience with similar programs saw an immediate big increase in sales as a direct result of the program. That’s the hope for the American auto market too.
Remember, of course, that there are still some great deals on vehicles available regardless of the “cash for clunkers” program. The more shopping you do, the better the price you will get.
Source: Clark.com - Advice You Can Trust From Clark Howard and Team Clark
I wonder, if I trade-in my 32 MPG Civic for a $4,500 45 MPG motorcycle, can I get it for free?
No, not out of YOUR pocket…The money must be borrowed from the Chinese or other “investors”… Over our entire history, we have NEVER repaid a dime of this debt, we just keep borrowing more to cover the old debt. They just put Bernie Madloff in prison for 150 years for doing this…So you might as well get your $4500 while you can and let God figure it all out later…
lol, My 89 Honda is the same way, Not that I would trade it in at all.
Over our entire history, we have NEVER repaid a dime of this debt
Caddyman, the national debt did get smaller in the 1990s when we paid some of it off. Our government had record surpluses in the late 1990s, and some of those surpluses were used to pay down the deficit.
I don’t care if you give credit to the republican controlled Congress or President Clinton. That statement is certainly false.
They were talking about this probram on the radio. Some people will still be able to use this program that should not.
One man said that his 15 year old son will want a car when he’s 16. He said that he will go out tomorrow, buy a $500 clunker that qualifies. Keep it licenced and insured for the next year. Then when the kid needs a car, he’ll pass down his existing car he drives. Take the clunker to the dealership and get a nice chunk of that new car for himself, paid for by us.
This is going to take a lot of nice used cars off the market for the people who can’t afford a new car. So those poor people will still have to keep their old 1995 car, because the 2002 that they would have been able to afford, is going to be scrapped. So where are we ahead if those 1995s and older are still being run.
This program only helps those people who have the money to buy new cars on a regular basis.
I see many good cars and trucks being destroyed in this way.
yosemite
Buying a $500 clunker and keeping it running and insured for a year might cost more than the rebate is worth. There are many restrictions of which most of us are not yet aware. There may be a restriction that prevents this kind of abuse.
I hope that guy does his research first. He could likely find that his old clunker doesn’t qualify. However, even if he does qualify, he will be getting an old polluting machine off the road and buying a much cleaner new car, which is exactly what this program intends to do.