Deal or No Deal?: Cash For Clunkers

Anyone know what the status of payments are to dealers?  Have a friend in AZ sells cars, he said it was not pretty, this was a couple weeks ago

Thats 690K cars that are under warrant for the next 3-4 years and will be at dealers being serviced, can't be said that 690K used cars would have ended up at repair shops or dealers being fixed, so thats solid work for dealers for years to come. Having worked at VW during their boom earlier this decade I Can say most can't handle it and have to take on more staff so that means jobs. I see it as a big win there.

Junkyards have to take the cars, dismantle them, inventory the parts and then crush them. That's more jobs. Then despite all the and moaning that its going to hurt value of used parts it will actually cause them to drop making it cheaper for others to keep cars on the road. There was the common misconception that hte cars were just simply trashed when they have 180 days to be parted out before they were destroyed.

So what if it had some foreign manufactures that did well as pointed out they manufacture cars in the US and some of the US manufactures sold cars made outside of the US. Not to mention the dealers staffs, parts warehouses, warranty admins, marketing people etc are all working in the US so this helps their jobs. Also as mentioned in other threads most of the companies are publicaly owned and just like no US citizens may own stock in US companies we may own stock in foreign companies so really they are global and every stands to win.

And GM and chyrsler didn't see a bump in sales, only further reinforcement that you get 4500 bucks for free and people still don't want them. Maybe time to rethink your product line if people don't even want it on sale. I happen to be a fan of many of both their products too.


I'm just annoyed that the car I Want doesn't come out until late november and my bought my clunker too late for it to qualify since it hasn't been a year under my name. If I'm paying for it I wish I could have taken advantage. I told all the people opposed to me thinking this was a good idea that I would make sure I wasn't using their tax money if they promised not to use my tax money in the next war they supported and most agreed .

Only valid real argument I have heard of jobs it may have ruined were used car lots.

I do not know if it was ever mentioned but I know that the government ever listed what could be salvaged on a car. Legally the engine/block had to be destroyed and no part of it could be resold but as for the other parts...I never heard. The destruction and inventory of the cars could provide a small boost in jobs for some areas but I do not think it will last. Mostly I think this was a chance to do something that seemed to be doing good right now. I agree getting smog spewers off the road for more emission friendly vehicles is a good idea but I am not sure there will be many, if any. long term positive results from this.

It said right in there that they could sell anything off the car before it got crushed except the engine, I believe it said drivetrain which some took to mean transmission at first including myself but was later clarfied to just be the engine. Plus even when it is crushed the scrap metal is sold so more money to be made.

Most people were not aware either but the junkyard could pay you for the car minus any fees say for towing were required to go to you and not the dealer. So if you traded it in and got your 4500 bucks but the dealer got 500 bucks for the clunker they had to give that to you. There was a report of someone who arranged with the dealer and junkyard got a thousand bucks for his car dropped it right off at the junkyard and went to the dealer to get his new car so he wasn't even out the money for the tow, this was sort of against the rules but all parties agreed so why not?

Sure it doesn't make jobs persay but look at the price list for a local pull a part type junkyard where you go in. Minus the drivetrain if 60% of the parts off a car are taken they are making a few grand per clunker. Figure 25-50% more at least for the part if it is a they pull it place and then they have to pay people to pull the parts. Even if it is not jobs persay direct that's a huge boost in economy.

Last, no maybe not, but they have 180 days to scrap a car, that is potentially 6 months of jobs. Many facilities are going to grow in size and now have an existing man power so they'll stay expanded.

I know I'm in a smaller group but I see lots of little benefits to it all when you look at every level of what is going on with the process. I think that was more the point not just lets make car companies money.

Mrtopher makes some excellent observations. I'm all for cash-for-clunkers, but I've been a long-time gas-guzzler hater, so good riddance to all the guzzler engines being melted down.

I think the big-3 over-reliance on huge SUV's and trucks is largely responsible for their problems. Toyota and Honda have faired much better because of their better balance and solid offerings of efficient passenger cars. I heart my Honda Civic.

Edited by zed707 2009-09-02 5:33 PM

I'm just bitter that my tax dollars went to help pay for someone else's new car while I'm about to spend money repairing mine.  That's crap.

I still get a chuckle that everyone who got the cash for the clunker had to pay taxes on it.

This user's post has been ignored.

I am a used car dealer... This Cash for Clunkers has been VERY BAD for my business.

I am paying MORE for cars at the auction because new dealers have much less "used" stock to get rid of. I'm literally paying premium (Kelly Blue Book Retail minus tax... woohoo) for cars. That is terrible when you consider that almost everyone who has access to the internet can now look up the KBB of a car, and then usually they want me to EAT the tax...

Add to that the fact that some of the dealerships I buy direct from are locking up the engines in some cars/trucks that would be front line products on my lot... I just shake my head.

It was very poorly thought out. Many of my friends at a large ford dealership tell me they will probably NOT be getting the $4500 back on many of the cars, because of paperwork foul ups.

Along with the New Deal, the Hoover Dam, and WWII; the Cash for Clunkers program will be written about in history books for saving the great recession of 2009!

This user's post has been ignored.

Edited by PennState 2009-09-03 6:17 AM

My best friend is GM at a Saturn dealership and a smart guy. He said the regulations and paperwork for this program have been insane for dealers and that, if the government wanted, they could find a way of declaring just about all of these deals invalid.

JUst think, maybe we can carry this same administrative brilliance over into healthcare.

It's the "pick a team and defend 'til the end" mentality.  In reality implications of one administration do not equate to praising of another but that only seems to apply to those of us who focus on the issues and not a particular "team." 

I was not a fan for CfC.  False bubbles, even when this small, have never produced good concequences.

FYI to add to the discussion:

Top 10 cash for clunkers purchases

1. Toyota Corolla
2. Honda Civic
3. Ford Focus
4. Toyota Camry
5. Hyundai Elantra
6. Toyota Prius
7. Nissan Versa
8. Ford Escape FWD
9. Honda Fit
10. Honda CR-V AWD

the good news is, all I have to do at work this week is sit on BT and waste the day.

So far 3 1/2 hours, 0 customers, 0 payments, 0 phone calls.

It seems the American public is growing to believe neither of these parties is on their team. I read a recent poll that 57% of those surveyed and 75% of independent voters believe every currently seated lawmaker should be thrown out of office and we should start from scratch.

I was there a long time ago.

Actually that was a false rumor going around... from the cars.gov website..

 

 

Edited by TriRSquared 2009-09-03 10:18 AM

I'd be interested to know what percentage of the new cars were sold to people who really couldn't afford it by utilizing some form of creative financing. How many will then be repossessed? It's like the housing bubble all over again. Let's encourage people who can't afford it to buy something so one segment of the market can be stimulated and worry about the consequences somewhere down the line. It could be that many of the people had clunkers because they couldn't afford a new vehicle and the government's dangling of the $$$ enticed people to make unwise decisions.

I had a vehicle that qualified as a clunker. I looked the program and found that even with the so called free money it would still be far more expensive to purchase a new vehicle than a one year old used one. While a new vehicle would be nice, it didn't justify reckless spending.

Now it seems that most dealers have been left to finance this program until the government gets around to paying them. Look at the mismanagement of a relatively small program like this and just imagine how badly health care will be bungled.

This is why it was REQIURED that they were approved before making the deal with the customer.  Sorry but it isn't so smart if he has cars on the lots that will be denied because he didn't do his job then or his salespeople didn't do their jobs who he was overseeing. This is also why all the youtube videos of cars getting their engines locked up on day was silly as many of those may not have been approved.

I heard one story that the dealer started to part the car out and it turned out the car was not approved.. had to get all the parts back. Had they done what was required of them as an approved C4C dealer they wouldn't be in the mess. (think it was an amg mercedes and someone was taking all the AMG wheels, brakes ,seats etc)

If a dealer is stuck with a car that gets denied they screwed up, not the program trying to just not pay out. Its all in the rules.

On that note no one brought up the income made by sodium silicate manufactures which is what was used to destroy the engines, thas 600K+ gallons

The delays do suck though and would be nice if they could get it done in a timely manner, but hey that was more jobs created hiring staff to handle it.

Seems to me like a lot of jobs were created and a lot of product moved which all stimulates the economy.

While I am sure many may be stretchign the budget look at the list of cars, think about 4500 bucks off and if they had a grand or two to put down anyway. On a 60 month loan their payment is going to be 300 bucks or so if that. You could easily need to come up with that in repairs over the course of a year on a 10-15 year old car. Some of those cars with nothing more down just your 4500 bucks would be sub 200 a month payments. Some could be saving 100 a month in gas so they pay 100 bucks to have a brand new car with a warranty and no worry about repairs. They are saving money.

Also there were many reports that the people buying them COULD afford them they just finally chose to get rid of their 10 year old explorer that they had no payments on but were saving this whole time. Many were paying cash and most were qualifying for hte best possible rates. Just because there are incentives doesn't mean they are loaning to people who can't afford it. Clearly they were moving enough product on their own without getting creative.

Am I saying that no one stretched their budget or won't get hung up but that could happen and does happen any day of the week without a sale. The list of cars makes it pretty clear that sensible people were shopping for and buying sensible vehicles.