Cash for Clunkers Status

[mjs]

I have a 99 Grand Am that has several issues so it wouldn't be worth very much as a trade in. So, I'm leaning to buying a new one rather than sinking cash into the old one, but I don't want to get screwed on a major tax credit. If I don't get a credit, maybe I'll get this one fixed or buy something used. Most of the problems aren't going to keep the car from getting me where I need to go.

Has anyone heard where the cash for clunkers legislation sits or what the conditions will be?

Aren't there similar cash for clunkers laws already out there?

Any speculation on what a GM bankruptcy or dealership closures might do to auto prices?

[Retroit]

I believe that the legislation would only apply to cars with less than 18 mpg fuel economy and that your car has at least 20 mpg fuel economy. So, as usual, you are screwed!

But don't take my word for it; do your own independent research.

[Warrenite84]

Those of us who work on restoring old cars have known about this subject for 10+ years.

It started out in California so that power companies could buy,"clunkers", crush them, then apply the credits to offset their own pollution. It was much cheaper for then to do that than to make the state mandated repairs to their power plants for smog reductions.

This was documented for some time in Hemmings Motor News, an auto and parts ad selling magazine for auto restorers. The biggest contention restorers have with this is that all the usable parts would be scrapped, not used to keep restorable cars on the road.

This would hurt the poorest people the most, since they cannot afford a new car even with all the incentives. It would also hurt those who restore old cars, since hard to find spare parts that are not reproduced would be the difference between a restored car and a parted out one.

Although I haven't looked over the legislation, I am strictly opposed to a,'Cash For Clunkers Program'. It's a scam.

[Angry Dad]

This legislation is "hung up" right now.

Don't take the title literally.

Some are anticipating that there will be stipulations requiring a proof of ownership for a given amount of time, that the target will not to sell all cars but to move certain types of cars and trucks. Like move some of the nearly half million pick up trucks stored at dealerships across the country.

IMO. The politicians should have done most of the groundwork for this nonsense before giving speeches about "their" effort to pass legislation. There's a lot of people that are holding back from buying because they figure there will be a bonus around the corner.

[mjs]

Sounds like what Angry Dad posted is still right. HR 520, HR 1550, HR 1606, and S 247 have all been in committee since either early January or mid-March. Dead without a vote. I guess I'm going to have two vehicles soon.

[ghein]

Well, I'm now vehemently opposed to this. 18 mpg or less? What's the sense in that? I was thinking of trading in my old escort and getting a fusion if this legislation passed, but the escort gets 25 mpg, so I guess that won't happen. Instead of helping the auto industry and increasing my fuel mileage, I guess I'll be fixing up my clunker. Good job congress.

[mjs]

There's still some incentive. A new Focus gets 37 mpg and you're getting 25 mpg. If you drive 20,000 miles a year, you can save 260 gallons a year or 2600 gallons over a ten year life-span. At $2.50 a gallon, thats $6500 and thats more than any incentives they were discussing. I wanted both if they were dumb enough to offer it.

[milesdriven]

If this passes, instead of selling my old Aerostar for $500 maybe I'll be able to get a new Focus.

[mjs]

I went to the dealer and I don't know why some ad said 37 mpg on a Focus. But, Ghein, if you were serious about trading in for a more fuel efficient Fusion, now might be the perfect time. The 2010 Fusion Hybrid gets 41 City/ 36 Highway and comes with a $3400 hybrid credit. Since the similarly equipped Fusion I4 SEL is only $3300 less, it seems the feds pick up the tab on this hybrid upgrade. Regardless, since there's no cash for clunkers, I think I'm going to save $10,000 and get a 2008 Focus, Cobalt, or Civic.

[ordinary]

It's a crock. My daughter saved her money and bought a 1989 Mercury Marquis for $2100. It runs great and she's safe in it. Why in the world would she want to go in debt to buy something newer? The gas savings would never add up. I agree with Warrenite 84. It's a scam.

[Sandhouse]

This bill is almost certainly a crock, but that doesn't mean it won't pass and get signed. As of Monday, June 1, it sounds probable. It will be said to help Chrysler and GM, but that's probably mostly untrue. I believe that the real beneficiaries, and the real power behind this bill, haven't been mentioned publicly yet: the dealers.

I expect that when detailes of the program are made public, you will find that it is difficult or impossible to buy a new car under it without revealing to the dealer that you intend to claim the $3,500 or $4,500 credit toward a more-efficient car than the one you're trading in. That means the dealer will be free to add some large fraction of $3,500 or $4,500 to the price. Since the trade-in is a feature of the transaction, it probably won't be possible to negotiate the new-car deal, and then tell the seller you want to trade in your "clunker."

This scheme will arrive too late for many Chrysler and GM dealers, but that just means the survivors will have greater freedom to claim a big chunk of the government's hand-out.

The bill will probably require that the trade-ins be crushed. This is the part that offends car collectors, but I doubt that many treasured relics of the future will get shredded. Of course, this part of the deal also benefits dealers, since it diminishes the population of old cars. That increases the value of dealers' used-car inventories, and slightly increases demand for new cars. If the trade-ins are indeed crushed, much of the $3,500 or $4,500 must be claimed by the dealer, to pay for the car it gives to the government to be destroyed. In this case, the program amounts to a dead-weight loss to the economy, as usable assets are being wasted.

[mjs]

Its a scam because no one else should be paying for my new vehicle especially a debt ridden government. The credit works on a voucher system so the delearship has no incentive to raise the price. It comes from the Feds, not from the dealer. You think they'd raise the price if you told them $3000 was coming from your parents? They really don't care how you pay for it as long as you pay for it. I can see taking the old vehicles off the road, but I've seen nothing saying that parts can't be salvaged and I've been following the bills. These bills are whats referred to as killed in committee. Get credit for writing it, but none of the blame for passing it.

[biggus]

I have a 93 S-10 Blazer with a bad motor that has been setting in the driveway for 2 years now. If it passes, I would use my credit on a new 2011 Chevrolet Cruze.

There is talk that the 1.4-liter turbo's fuel economy could be as high as 45 mpg, presumably on the highway.

I'll trade that pos Blazer in a "Heartbeat"!