Cash For Clunkers Program is a Clunker!

I think that you have to look at the bigger picture.

Is it better that the local Ford dealer move 40 new Ford Focus' off the lot with some brain damage because they have to deal with the paperwork, then have those cars still in inventory 2 months from now?

I think that any Ford dealer would answer with a resounding YES!

The dealer does not have to participate in the program if they do not want to or if they think that it is too bothersome to implement.

They should not look a $4500 gift horse in the mouth, IMHO.

Here’s some more info on the subject http://www.npr.org/templates/s...11145913&ft=1&f=1006

I would have liked the idea a bit more if the program had tighter restrictions on the gas mileage for the new vehicles purchased. Something like, cars must have 35 mpg highway, SUVs 25 mpg highway and trucks 26 mpg highway. The program is not a government mandate for the dealers and I’m sure they will get this figured out ASAP and make lots of sales from it. You as well!!!

The best news is that cars with Cleveland engines do not qualify for the program and you’ve got to give Washington some credit for that. I think Dianne must be a Pantera owner and helping us out!

Mike

I do not agree with many (any) of the presidents bailouts but since my college age son clearly needed a new vehicle my ex and I decided to try for the cash for clunkers rebate. I figure it is my chance to get some of my tax dollars back to help my family. As luck would have it , since we switched the title from her name to mine in November I had not owned the car for a year and it was not eligible. It did not matter that she has the same last name as me and the vehicle title was transferred with no sale tax paid. The trade in was a Mazda tribute with 160k on the clock and serious NY sale body cancer. We bought a Kia Soul (hamster car) with nearly twice the fuel economy. Nice deal for my son but no rebate help from the gov. The devil is always in the details with these programs and common sense is usually left out of the equation. I have 25 + years in government service and common sense is much harder to find the higher in rank you search. I think government is ruining this country's financial future and I see evidence every day.

MOOT POINT!

The program is over and suspended!

http://finance.yahoo.com/news/...&pos=1&asset=&ccode=

The re-distribution of wealth is always difficult. I am not sure how great a deal it is for the consumer. You take a car you would have gotten $1000 for. You could have bargained the dealer for at least $1000 off the cost of the car and you would have gotten descent money for the car. Instead you settle for the cost of the car as stickered - $4500 and I doubt the dealer will cut you other breaks any where else. It's not pick nick for the dealer.

Did it do anything? You have a junk Impala that gets 12mpg. Your plan was to go to a used car lot and get a $6000 car that gets 28mpg figuring you would have the junk impala crushed or sold for parts. Instead you trade it for a car which is sticker for $24k, $28,500 with options out the door. - $4500 which makes it $24,000 out the door.

Now you have a loan for $24,000. The banks used to require 20% down. After regulations requiring that loans be made more accessible to those who could not afford loans now you get most of the loan up front. But now, instead of the 20% down to protect their investment they want you to pay for insurance encase you loose your job, or otherwise cannot meet your contract. This protects the bank but cost you $100/month extra!!! It's only an extra $100/month so the loans can be accessible to those who cannot afford them.

And thus we have government involvement in free enterprise blaming free enterprise for a system that doesn't work.

And after all that, all we are doing is getting people in cars which they should not be in, re-inflating a bubble as fast as we can!!

Anyone got a pin?

quote:

Originally posted by four walling:
MOOT POINT!

The program is over and suspended!

http://finance.yahoo.com/news/...&pos=1&asset=&ccode=

Wow! 250,000 cars sold in less than a week. Amazing!

quote:

Originally posted by dreamer2:
I have 25 + years in government service and common sense is much harder to find the higher in rank you search. I think government is ruining this country's financial future and I see evidence every day.

Funny thing about common sense. Its not that common.

From an article on Edmunds


The Inconvenient Truth About "Cash for Clunkers" Is $20K Per Sale In Taxpayer Cash

July 27, 2009

Much has been written - both pro and con - about the so-called Cash for Clunkers program that officially launched Monday.

Complexity, limited eligibility and minimal funding are common criticisms, but a chief filing of the program, according to Edmunds.com CEO Jeremy Anwyl is the cost to taxpayers. Even if Cash for Clunkers reaches its budgeted cap of $1 billion, the program will only help drive about 50,000 incremental new car sales, each of which will cost taxpayers a whopping $20,000, according to Edmunds.com's research.



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 - officially called the Car Allowance Rebate System (CARS) - 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 billion, 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 Anwyl. "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.

"Really, the best consequence is that many consumers are getting interested in the idea of a new vehicle after hearing about Cash for Clunkers; we have to hope that even if they don't qualify, they will buy a vehicle anyway," added Anwyl. "But, how long-lived will that be? Once the program reaches its cap, interest will die down, and sales volume will fall as quickly as it rose. What will motivate shoppers to brave the marketplace in the months following Cash for Clunkers?"

Automakers must step up to continue the momentum. Anwyl points to the current Chrysler incentive program as an example of a creative marketing message that uses the Cash for Clunkers buzz to generate sales and to arm Chrysler dealers with a useful tool when working with Cash for Clunkers "rejects."

Still, for the savvy shopper who qualifes for a $3,500 or $4,500 Cash for Clunkers voucher, good deals are available. Tips for getting a good deal on available on the Cash for Clunkers section of Edmunds.com. Lively discussions about Cash for Clunkers are talking place on Edmunds' CarSpace.com message boards.

quote:

Originally posted by four walling:
MOOT POINT!

The program is over and suspended!

http://finance.yahoo.com/news/...&pos=1&asset=&ccode=

Not so fast....

http://www.msnbc.msn.com/id/32...79/ns/business-autos

quote:

Originally posted by Pantera 4134:
From an article on Edmunds


The Inconvenient Truth About "Cash for Clunkers" Is $20K Per Sale In Taxpayer Cash

July 27, 2009

Much has been written - both pro and con - about the so-called Cash for Clunkers program that officially launched Monday.

Complexity, limited eligibility and minimal funding are common criticisms, but a chief filing of the program, according to Edmunds.com CEO Jeremy Anwyl is the cost to taxpayers. Even if Cash for Clunkers reaches its budgeted cap of $1 billion, the program will only help drive about 50,000 incremental new car sales, each of which will cost taxpayers a whopping $20,000, according to Edmunds.com's research.



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 - officially called the Car Allowance Rebate System (CARS) - 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 billion, 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 Anwyl. "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.

"Really, the best consequence is that many consumers are getting interested in the idea of a new vehicle after hearing about Cash for Clunkers; we have to hope that even if they don't qualify, they will buy a vehicle anyway," added Anwyl. "But, how long-lived will that be? Once the program reaches its cap, interest will die down, and sales volume will fall as quickly as it rose. What will motivate shoppers to brave the marketplace in the months following Cash for Clunkers?"

Automakers must step up to continue the momentum. Anwyl points to the current Chrysler incentive program as an example of a creative marketing message that uses the Cash for Clunkers buzz to generate sales and to arm Chrysler dealers with a useful tool when working with Cash for Clunkers "rejects."

Still, for the savvy shopper who qualifes for a $3,500 or $4,500 Cash for Clunkers voucher, good deals are available. Tips for getting a good deal on available on the Cash for Clunkers section of Edmunds.com. Lively discussions about Cash for Clunkers are talking place on Edmunds' CarSpace.com message boards.

I guess the part they missed is it only took a week to sell 250,000 vehicles. Wish I had a clunker to trade!!!

Mike

quote:

each of which will cost taxpayers a whopping $20,000, according to Edmunds.com's research.

Funny they never justified how they came about this figure. So to me it is just some reporter trying to get his copy published. From the figures they have published the $96,000,000 that was spent on the 22,000 "clunkers" that have been traded in equates to $4363.63 average per trade in. So how do you think it cost the government $20,000.00 per vehicle??? You can only recieve $3500 or $4500 for your trade in. With one billion dollars set up to fund this program at $20,000 they would have already spent $440,000,000
The numbers in these articles just dont add up.
Jeff

quote:

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 - officially called the Car Allowance Rebate System (CARS) - 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 billion, 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 Anwyl. "So as a stimulus, the program fails.

How they calculated the cost...
250,000 - # cars expected to qualify for the clunker stimulus before funds run out
200,000 - # cars that would be traded in on new cars anyway within same 3 month period
----------
  50,000 - # net (additional) new cars sold

(stimulus budget)/(# net new sales) = taxpayer cost per net new sale (stimulated)
$1,000,000,000/50,000=$20,000 cost per additional vehicle sale program "stimulated."

This program has two goals, 1 stimulate car sales and the economy and 2 remove old less efficient cars from the road. The 200,000 cars that "would be traded on new cars anyway" are now no longer on the road. So it is 50,000 in new business and 250,000 cars off the road. That changes the math a bit.

Ed....

The math is more screwed up than that....This is comparing 3 mos of 'typical" trade ins to 1 week of the "stimulus". If you put it on an even field its even more interesting.

200,000 "typical" trade ins (3 mos)divided by 12 weeks = 16,666 units per week

250,000 "stimilus" trade ins (1 week)divided by 1 week = 250,000 units in a week

A surplus of 233,334 units NOT the 50,000 as claimed in the opening thread (and thats just in the first week).

Since there are people who are still going to be "typical", even in this ecomony, you still have to add back in the 16,666 potential units per week that still may be traded in over the remaining 11 weeks.....

16,666 X 11 weeks = 183,326 units
+ 250,000 first week units
= 433,326 total units for three months

Again not the paltry numbers first reported. This is over a 200% improvement not 25%.

Bottom line is a lot of people took advantage of this program and wether you love it or hate it the impact has yet to be seen. But there will be an impact.....

Germany has a "clunkers" program to that was infused with 5 Billion euros($7 Billion dollars). Program was destined to run until the end of the year and support the sale of upto 2 million vehicles, as of now 1.7 million vehicles vouchers have been redeemed.
Germany Cash for Clunkers

The US House of Representives voted yesterday to boost the $1 Billion slated to the CARS program, the Senate is expected to vote on the bill on Monday the House approved another $2 Billion for the program.
Us approves more money
That is something almost 250,000 vehicles in less then a week, something that was planned on lasting for three months. I say it is stimulating sales.
My wife wants to get a G8, maybe the Suburban will get a clunker status.
Jeff

Too bad I'm not in the US to take advantage of this program.
The "dealers" have to read over 250 pages of procedures???
Yeah, I feel real sorry for those buffoons.. nice try.

quote:

Originally posted by Panther:
Too bad I'm not in the US to take advantage of this program.
The "dealers" have to read over 250 pages of procedures???
Yeah, I feel real sorry for those buffoons.. nice try.

It isnt the work load. I have yet to record my first deal on the government web site and it is not for a lack of trying and I read that the program is out of funds. It is about me fronting the 4500 per deal and wondering if I will see the reimbursement.The Feds want the paperwork one way and the State wants it another way - I get stuck in the middle.

Ed...

quote:

Originally posted by Lmguy:

quote:

Originally posted by Panther:
Too bad I'm not in the US to take advantage of this program.
The "dealers" have to read over 250 pages of procedures???
Yeah, I feel real sorry for those buffoons.. nice try.

It isnt the work load. I have yet to record my first deal on the government web site and it is not for a lack of trying and I read that the program is out of funds. It is about me fronting the 4500 per deal and wondering if I will see the reimbursement.The Feds want the paperwork one way and the State wants it another way - I get stuck in the middle.

Ed...

If the program isn't forced on you and you're confused with the process, then don't participate.

I wouldn't.

didnt know that ahead of time!!!!

I know you are in Germany Panther, but when was the last time that you dealt with any government agency or program and it was fast, efficient, and easy to understand. I have dealt with the Social Security Administration, the IRS, and the United States Postal Service -- all nightmares. Not saying that private companies cannot be bad either, but they are a lot better to deal with than any government program that you HAVE to deal without any other options (i.e. MONOPOLY, not the game either....).

I wish I had the money to get that kind of deal on a car, because $3,500 or $4,500 is nothing to sneeze at either -- but it only applies on a new car; that I cannot afford anyway -- I would rather buy Pantera parts anyday anyway.

The US government can find better ways to help the auto industry. This program will do nothing for the long term viability of US manufacturers. The restrictions do little to help luxury car brands like L&M and Cadillac. They are struggling just as hard if not harder in these economic times.

Ed, am I wrong here?

It is just another poor example of income re distribution.

Drove by the long string of car dealers on Peachtree Industrial yesterday. The customer parking areas sure had a lot of “clunkers” sitting there. I don’t think I’ve ever seen so many old cars parked at a dealer before. It was an amazing sight.

Mike

Happy news for Ford http://www.msnbc.msn.com/id/32261206/ns/business
Mike

I went by a dealer yesterday and like Mike I could not believe all of the old cars sitting along the fence row. All of them had "not for sale" wrote on the windows.
Jeff

quote:

Originally posted by Pantera 4134:
The US government can find better ways to help the auto industry. This program will do nothing for the long term viability of US manufacturers. The restrictions do little to help luxury car brands like L&M and Cadillac. They are struggling just as hard if not harder in these economic times.

Ed, am I wrong here?

It is just another poor example of income re distribution.

I think the program had many objectives and the two easiest to see are to increase the fleet fuel efficinecy and a stimulus to the US Auto industry (domestic and import).

The program is cumbersome, It seems to change daily - sometimes for the better, I will do the pushups, it is generating business, I just want to be able to sleep at night knowning I will get paid. It could have been done better and parts of it were really well thought out. The administrative parts were weak. It is the program we have so I will run with it. Will it exclusively help the domestic car makers? Probably not, although it may get some people to try them again and then we will see.

It did increase business in the the last week. It may have delayed some business since May. You cant argue the fact that is was hugely successful in removing old (less fuel efficient cars) from use. And at least somewhat successful in creating new business. You can't say it was only a stimulus for the car industry nor can you say it was just a fleet upgrade program.

Just my opinion....


ed...

So what there saying is? Lets use tax dollars (that you and I pay in) and give it to other people to intice them to buy new cars? So you and I are helping someone else buy a new car? Hell, I can't afford a new car!
Thats great, what else is Pres. B.O. going to use our tax dollars for? Maybe take the wife and kids on vacation? AGAIN

The dumb part is, they have studies that found people with cars that get better gas mileage tend to drive more than they did with their "clunkers" with bad gas mileage. "Hey we get better gas mileage, lets go on a 500 mile trip" Seriously ridiculous. F' Obama, he doesn't have a clue. I hear more about what he does to entertain himself and his family than what he is doing attending to our countries needs.

More good news and money for the folks that make their living from the auto industry http://www.msnbc.msn.com/id/32...64/ns/business-autos The clunk is sounding more like a roar.

Mike

quote:

Originally posted by Hustler:
The dumb part is, they have studies that found people with cars that get better gas mileage tend to drive more than they did with their "clunkers" with bad gas mileage. "Hey we get better gas mileage, lets go on a 500 mile trip"

If those folks are driving more that means they have got to eat and stay somewhere. Sounds like they will be spending money and helping the local economy, wherever they might travel.

At least, that is the way I see it.

Bring on the 500 mile trip!

quote:

Originally posted by Pantera 1887:
Mike The clunk is sounding more like a roar.

I concur. There are a hell of a lot of workers at car dealerships that will NOT be collecting unemployment and spending money in their local community.

Bring on the clunkers, I say.

And there are a hell of a lot of people who could use a cheap used car. And there are a hell of a lot of mechanics who could work on those used cars.

Auto Dealers Paid for Just 2 Percent of 'Clunkers'

The federal government has only reimbursed auto dealers for 2 percent of the claims they've submitted through the popular "cash for clunkers" program, a Pennsylvania congressman said, calling on the Obama administration to help speed up the process.
Rep. Joe Sestak, D-Pa., called for "immediate action" to address the problem in a statement Sunday, after writing a letter to President Obama Saturday expressing his concerns.
In the letter, Sestak said only 2 percent of claims have been paid and that four of every five applications have been "rejected for minor oversight."
In recent days, auto dealers across the country have been complaining that the reimbursement payments are slow to process. And they said some of their applications were being rejected because of apparent procedural issues. The statistics Sestak cited suggest those complaints are not based on isolated incidents.
Staffing could be one problem. According to sales data summarized by Transportation Department officials, dealers have submitted requests for rebates on 338,659 vehicles sold.
But while Congress just expanded the $1 billion program by $2 billion, the Department of Transportation says a staff of just 225 people is reviewing those claims.
Sestak wrote that he thinks 1,000 processors should be assigned to handle the claims. Sestak, who is challenging Sen. Arlen Specter in his state's Senate primary, wrote that auto dealers have contacted him to express their concern and ask for help.
"Failure to address delays with the cash for clunkers program will adversely harm auto dealers in the commonwealth of Pennsylvania and around the country -- undoubtedly forcing many out of business," he said in a statement.
Under the clunkers program, passenger car owners are eligible for a voucher worth between $3,500 and $4,500 if they trade in their gas guzzlers for new, fuel-efficient vehicles.



Well done bureaucrats !

If you, as a dealer, are unable to follow, complete and abide by the rules, then do not participate in the program. The government is GIVING you $3500 or $4500 cash. If the program does not work for you, then do not participate.

Please do not whine about the handout.

Just walk away from the government and sell cars via the old fashioned way-that is to say, with no government intervention.

Jeeez!

From the CARS website:

Rejected Applications: If an application does not fulfill every detailed requirement of the 126 page regulation, it will be rejected. NHTSA has confirmed that approximately 80% of all submittals have been rejected for one reason or another. When an application is rejected, it goes to the back of the processing line, leading to further delays. The top categories for rejection are as follows:

1. Failure to Brand Title: Dealers are required to brand both the front and back of the trade-in title with “Junk Automobile, CARS.gov” using indelible ink either by hand or with a stamp. Failure to do so will result in the rejection of the application.

2. Failure to Submit Documents: Be sure that you submit all required documents as part of the transaction—this will be the first thing that the reviewers will look for on their checklist. Do not use a color scanner to copy application documents – the file will be too big for them to receive by email.

3. Summary of Sale/Lease & Certifications Form Incomplete or Not Signed: Pages 4 and 5 of this form contain places for the dealer and customer to sign certifications under the penalty of law. Several dealers merely fill out the form afterward without getting the customer’s signature. Also, a dealer may not merely include the front pages and signature pages when submitting the transaction.

4. VIN Mismatch: With staff manually inputting 17 digit VINs into the system several times (without an automated VIN check feature), mistakes can and will happen. Be sure to advise your staff to pay close attention while entering this data—one wrong key stroke will result in rejection of the deal.

NHTSA has released the following table listing the most common rejection codes as of August 6th. These continue to be the main reasons for rejection:

Error Code
Reason for Rejection
Reject %
Quick Guide Page

201
“Junk Automobile, Cars.gov” not written on Page 1 and 2 of Title
13.58%
16-17

999
3 or More Errors Found***Recheck Entire Transaction
10.42%


302
Proof of Insurance not current and in force for previous 12 months
9.06%
18

701
Missing signature(s) on Summary of Sale
8.62%
21

703
Trade-In VIN Mismatch on Summary of Sale
5.37%
21 & 29

116
Missing Complete Summary of Sale/Lease
4.92%
21

301
VIN Mismatch on Trade-In Proof of Insurance
4.67%
18

704
New VIN Mismatch on Summary of Sale
4.07%
21 & 29

403
Trade-In not registered to same owner for previous 12 months
3.58%
19

108
Missing Trade-In Registration
3.06%
19

101
All Attachments missing
3.01%
14 & 27-28

114
Missing Fuel Economy.gov Side by Side Comparison
2.80%
24

203
VIN Mismatch on Trade-In Title
2.39%
16-17

601
Side by Side Trade in Category Does not Match
2.23%
29-30




NHTSA advises dealers who have pending applications to review their outstanding transactions against this list and be prepared to resubmit the application with any necessary corrections.

Kerry,

I am NOT a dealer.

The government is not giving the dealer anything. The handout is going to YOU the spoiled consumer.

The money is being fronted by the dealer for the consumer. It would be better if YOU had to front the money and wait on reimbursement. Maybe than you would have a different attitude if you had to deal with the process.

But it is easier to be critical of the dealer that has to deal with the mess. The program is cumbersome, poorly managed, and understaffed. It is a typical example of government mismanagement.

Jeff

quote:

Originally posted by Pantera 4134:
Kerry,

The program is cumbersome, poorly managed, and understaffed. It is a typical example of government mismanagement.

Jeff

Sorry Jeff, I do not mean to dis you.

I personally think that the only reason that the program appears to be cumbersome, poorly managed, and understaffed is because the dealership asking for reimbursement is cumbersome, poorly managed, and understaffed.

quote:

Originally posted by Pantera 4134:

But it is easier to be critical of the dealer that has to deal with the mess.

Jeff

I'm sorry but just who is forcing the dealers to participate?? The spoiled consumer maybe.....

All of this talk makes me wonder and ask how a government run health care system would work?

Well, it's over.

I think that the dealers screwed things up.

They could not score a C, a B+, or even an A- regarding the accuracy of their sales documentation to pass this test and get reimbursed.

Everything had to be perfect with regards to the submission for payment. They needed to score an A+-no documentation missing or wrong.

If the dealers would have followed the rules EXACTLY and done their due diligence and make sure that they had all their ducks in a row, the whole program would have gone a lot smoother.

There are a lot of dealers waiting to get paid but now the auto manufacturers are stepping up and fronting them the monies that they expect to be reimbursed for.

All in all, I think the program was better then not having one at all and that is what is important.

just my $.02.

Yea... It was nice that Pres. B.O. could give my tax dollars to others to entice them to buy a new car! Hell, I can't afford a new car!

quote:

Originally posted by four walling:
Well, it's over.

I think that the dealers screwed things up.

They could not score a C, a B+, or even an A- regarding the accuracy of their sales documentation to pass this test and get reimbursed.

Everything had to be perfect with regards to the submission for payment. They needed to score an A+-no documentation missing or wrong.

If the dealers would have followed the rules EXACTLY and done their due diligence and make sure that they had all their ducks in a row, the whole program would have gone a lot smoother.

There are a lot of dealers waiting to get paid but now the auto manufacturers are stepping up and fronting them the monies that they expect to be reimbursed for.

All in all, I think the program was better then not having one at all and that is what is important.

just my $.02.