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Old 01-15-2009, 12:43 PM   #1
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Default Congress considers 'Cash for Clunkers

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WASHINGTON -- Congress is mulling a proposal to pay people to get rid of those old gas guzzlers sitting in their driveways.

Under legislation introduced Wednesday in the House and Senate and called the "Cash for Clunkers" program, drivers could get vouchers of up to $4,500 when they turn in their old fuel-inefficient vehicles for scrapping and buy vehicles that get good gas mileage.

The bill, said Sen. Dianne Feinstein, D-Calif., "would be an important part of helping getting America's struggling automobile industry back on its feet."

Taking gas guzzlers off the road, added Sen. Susan Collins, R-Maine, a co-sponsor, "would stimulate the economy."
The bill envisions the program operating for four years and encouraging the retirement of up to 1 million vehicles a year, saving between 40,000 and 80,000 barrels of motor fuel a day by the end of the fourth year.

Drivers would be eligible for reimbursement for purchase of a new or used vehicle with a fuel economy rating that exceeds federal targets for that class of vehicle by at least 25 percent. The vehicle must have a manufacturer suggested retail price of less than $45,000 and be a 2004 model or later.

The vehicles turned in must be drivable, registered in the United States and have a when-new fuel economy rating of less than 18 miles per gallon.
In the first year of the program, a person trading in a vehicle that is model year 2002 and later would be eligible to receive $4,500 for purchase of a new vehicle, $3,000 for purchase of a used vehicle or $3,000 for transit fare credit.

For model year vehicles 1999 to 2001, drivers would get $3,000 for the purchase of a new vehicle. Those who trade in vehicles that came out in 1998 or before could get a credit of $2,000 for a new vehicle.

Initial estimates set the cost of the program between $1 billion and $2 billion a year.
http://www.detnews.com/apps/pbcs.dll...64/1148/AUTO01
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Old 01-15-2009, 12:44 PM   #2
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Taking gas guzzlers off the road, added Sen. Susan Collins, R-Maine, a co-sponsor, "would stimulate the economy."
ok, now they're just making **** up. is 09 going to be the year of "simulating the economy"?

i've got something they can stimulate...
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Old 01-15-2009, 12:54 PM   #3
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For good or ill they're just copying the French. Sadly an Aveo here isn't really the nice step up a Clio there would be.
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Old 01-15-2009, 12:57 PM   #4
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For good or ill they're just copying the French. Sadly an Aveo here isn't really the nice step up a Clio there would be.
wait, wat?
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Old 01-15-2009, 01:00 PM   #5
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change the Environmental Protection Agency to the Economic Protection Agency... the EPA is a major cause of american automaker hardship, and they keep those sweet european/japanese cars from coming over here!! I would buy a Ford Focus if it were AWD and turbo (like they have everywhere but America!!)
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Old 01-15-2009, 02:29 PM   #6
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wait, wat?
http://forums.nasioc.com/forums/show....php?t=1673016
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Old 01-15-2009, 03:40 PM   #7
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ok, now they're just making **** up. is 09 going to be the year of "simulating the economy"?

i've got something they can stimulate...
Well considering that to get the money you have to buy a new car, yes it will stimulate the economy.
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Old 01-15-2009, 07:08 PM   #8
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Originally Posted by Tar--Mac View Post
change the Environmental Protection Agency to the Economic Protection Agency... the EPA is a major cause of american automaker hardship, and they keep those sweet european/japanese cars from coming over here!! I would buy a Ford Focus if it were AWD and turbo (like they have everywhere but America!!)
I would sure like to see one of these turbo and AWD Focus's you are taking about. They do make a few turbo models but I have never seen an AWD one.
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Old 01-15-2009, 08:05 PM   #9
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Pi****ingcard
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Old 01-15-2009, 08:27 PM   #10
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focus rs 2.0, turbo, fwd, quaffe diff, my friends dad has one (he lives in england)
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Old 01-15-2009, 09:00 PM   #11
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Buy a clunker for $100, trade it in on a Volt, get the $7500 PHEV tax credit and a $4500 clunker credit, get out the dealer's door for $28k on a $40k MSRP. A rotten old polluter gets taken off the streets and recycled into something less damaging. Local government gets higher vehicle excise tax, state government gets sales tax, federal government gets paid back on the automaker loans and gets income taxes from autoworkers that are still working... And local pollution is lowered.

Yah, sorry, not seeing the problem here. I mean, we can argue about the exact dollar figure that would be appropriate, but overall it's a "win" all the way around.

That you can "trade in" a clunker for $3000 worth of transit passes, that's good to see too. If I still lived in a big city, a transit pass and a ZipCar (or similar) membership is really all the "personal mobility" services I'd need.
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Old 01-16-2009, 06:10 PM   #12
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Yah, sorry, not seeing the problem here. I mean, we can argue about the exact dollar figure that would be appropriate, but overall it's a "win" all the way around.
How about that our federal government is so far in debt we can't see light anymore?
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Old 01-16-2009, 07:08 PM   #13
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not to mention all of the classic or soon to be classic cars that will go to the crusher if this passes
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Old 01-16-2009, 07:19 PM   #14
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not to mention all of the classic or soon to be classic cars that will go to the crusher if this passes
If a classic isn't worth more than the $4500 credit, then it ain't a classic.
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Old 01-16-2009, 07:21 PM   #15
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How about that our federal government is so far in debt we can't see light anymore?
You must have missed the previous paragraph...

Quote:
Originally Posted by Chromer
Local government gets higher vehicle excise tax, state government gets sales tax, federal government gets paid back on the automaker loans and gets income taxes from autoworkers that are still working...
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Old 01-16-2009, 07:34 PM   #16
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We are just going to start printing money like it's newspaper. Oh well, as long as they say it's good, it's good. Hopefully one Peso won't be worth 10,000 U.S. dollars soon.........
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Old 01-17-2009, 07:25 AM   #17
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Dear U.S. government,

This isn't your job. Please go back to providing basic services. Oh, and while you're at it, please review the U.S. Constitution. It seems you've forgotten the entire document.
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Old 01-17-2009, 07:26 AM   #18
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^^^^^ Amen!

Frickin' A.
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Old 01-17-2009, 08:09 AM   #19
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Forget that, I like my hooptie. It cost nothing in yearly taxes. Its cheap to operate cause I can work on it myself and lastly its paid off.
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Old 01-17-2009, 07:25 PM   #20
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If a classic isn't worth more than the $4500 credit, then it ain't a classic.
One man's trash is another man's treasure...
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Old 02-06-2009, 12:59 PM   #21
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Default Cash for Clunkers' pulled from stimulus




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WASHINGTON (Reuters) -- One proposal to help jump start U.S. auto sales was withdrawn late Thursday and the fate of another was unclear, despite a vigorous endorsement from President Barack Obama, as Senate consideration of economic stimulus legislation accelerated.

Sen. Thomas Harkin, an Iowa Democrat, pulled an amendment that would have provided $16 billion in rebates to buyers of new fuel efficient vehicles who traded in their old, poor performing models.

Harkin said he would defer the so-called "cash for clunkers" proposal, which had strong support from U.S. automakers.
Lobbyists for those companies this week called it a genuine stimulus for a depressed market. U.S. auto sales plunged to a 26-year low in January.

There was no backing, however, for the plan from foreign manufacturers whose operations are clustered in states represented by conservative Republicans.

The provision required that the vehicle be assembled in the United States, a nod to General Motors Corp (GM, Fortune 500), Chrysler LLC and Ford Motor Co (F, Fortune 500), all struggling financially and all based in economically hard-hit Michigan. Those companies' domestic operations are unionized.

Automakers and suppliers are pushing hard for additional help from Washington, which extended GM and Chrysler a $17.4 billion bailout in December.

The Treasury Department has extended domestic auto finance companies capital to help stimulate lending and is considering additional steps to unlock tight consumer credit.
Still, U.S. automakers are banking on additional assistance from Congress.

Lawmakers also are weighing proposals in and outside of stimulus legislation to fund battery research for plug-in hybrids and other alternative fuels.

Also under consideration in the Senate stimulus bill is a $600 million plan for the government to purchase tens of thousands of fuel efficient vehicles to replace inefficient models in the fleet.

Obama Thursday struck back at critics of the plan, saying that it would reduce gasoline consumption and help revive sales.

"It will not only save the government significant money over time, it will not only create manufacturing jobs for folks who are making these cars, it will set a standard for private industry to match," Obama said in an appearance at the Energy Department.

Senate Minority Leader Mitch McConnell called the new vehicle program wasteful spending.

"I doubt if the government buying $600 million worth of automobiles would provide the kind of stimulus that we're talking about here," McConnell said Sunday in an appearance on the CBS program "Face the Nation."
http://money.cnn.com/2009/02/06/news...on=money_autos
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Old 02-06-2009, 01:08 PM   #22
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Why is it that these days "stimulating the economy" has come to mean "take out more loans?"

The government deepens national debt in order to encourage individuals to get a new car and in-turn the majority of them take out a loan for that new car. So basically, the government is going further into debt with programs that encourage people to keep borrowing money that they won't be able to afford to pay back. Isn't it a mountain of debt that got us into this mess in the first place? I know, we might as well just keep trucking that dirt in to make the mountain bigger and bigger

I know the government is trying to help and all, but I think they're making it worse... Good to see McConnell's stance though. There's that good 'ol saying "Money doesn't grow on trees" implying that money has to come from somewhere... You can't just magically "stimulate" an economy by manifesting some money out of nowhere, that money has to come from somewhere and be backed up by some sort of value. You can't pick an apple from an apple tree, photo copy it a bunch of times, and successully feed a nation with it. Same with money, so I'd like to know where our treasury keeps their magical and endlessly-fruitful money tree.

Last edited by jhargis; 02-06-2009 at 01:20 PM.
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Old 02-06-2009, 01:11 PM   #23
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Default The Truth About Cash for Clunkers



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Here’s a surprise: American cars hold their value much better than other major markets, including Japan and Europe. Cost of ownership is the culprit. In the US, owning a car generates relatively little in the way of year-to-year expenses. Registration is usually about $30. Inspections are infrequent and rarely costly.

While the repairs required to keep a “beater” on the road can reach four figures, they rarely exceed the value of the vehicle itself. As a result, it’s unusual to see a used vehicle in America (even “heaps”) listed for sale under $1k. Also as a result, the cash-for-clunkers proposals, as envisioned, are a horrible idea.

In an effort to boost sales, the German government has been running a “cash for clunkers” program. The government is offering 2,500 Euros for any eligible old car traded in towards a new car purchase. After some initial cheering, the program has been leaning toward scandal land. The reason for this nexus: gaps.

Gap number one: used car values. Overseas, licensing and stringent test regimes make the cost of car ownership a far more daunting proposition than it is in The Land of the Free. Tax laws favoring company/fleet purchases create [even] dramatic depreciation for mass market models. These factors mean that the market value of a “tradable” used car is much less than it’s “government” trade-in value.

The other gap—and the source of many of the “issues” surrounding the cash-for-clunkers program—lies between a car’s “inflated” trade-in value and the cost of a new car.

At best, the money garnered from the government for a clunker represents about a 25 percent down payment on a new car. That’s at the low end. For a more middle-market car, the clunker check accounts for less than 10 percent of the cleaner, greener machine’s purchase price. On top of that, the sort of person who would be buying a €10K car is the one least likely to get financing to close the “gap”.

The sharp end solution to this gap is simple: People who can afford new cars will buy (from a private owner) a “junker” to trade. The junker’s former owner will take a fee (maybe 1000 Euros) and use the money to buy a non-tradeable old car. Hopefully a better one, but not necessarily.

Despite/because of these economics, it seems that everyone wins (and the old cars get taken out of circulation). In practice, no.

The biggest problem with Germany’s cash-for-clunkers program: it takes something that is normally not very valuable (a German jalopy) and increase its value several-fold by attaching a couple of documents. Throw in the fact that the money “pool” supporting the program is “first come, first served,” and you get fraud on an impressively large scale.

TTAC’s Bertel Schmitt has been connecting the dots between the environmentalists’ and the mob’s green dreams. Apparently some of the trade-ins are doing it the Chicago way (early and often), and aren’t even getting scrapped. This makes a mess of the real purpose of the program (culling clunkers), while doing nothing to increase sales (the spoonful of sugar to make the green stuff go down easier).
It’s a stark warning to Americans contemplating the wisdom of the whole cash-for-clunkers concept. But is the devil in the details? Could CforC be done “properly”?

First, you’d need to make the scrap credit what it is: a simple payment above salvage value to take a heap off the road. Second, you need to make the payment lower (say $1,500 or even $1,000). Third, you need to extend it to ALL eligible vehicles and run it through salvage yards (therefore only one set of books to check).

In effect, the goal would be to get “heap” drivers into a slightly newer, slightly nicer “heap.”

Aside from aesthetics and a marginal pollution reduction, the greatest benefit would be to reduce the total vehicle population on the road. This will eventually help the new car market but not for a few years and not for the reason you’d think.

While new vehicle sales had been running high until last year, the “scrap rate” has held steady at about 12.5 million a year for the last decade. Sales have far exceeded that rate; that is one reason the US has 250 million cars for 200 million licensed drivers.

A targeted cull would aim to increase the scrap rate, to 15 million annually. Make no mistake, doing it right would not be cheap, I reckon $5b dollars a year (3.5 million times $1,500) ought to do it.

Reducing the absolute number of cars would help heal the damage years of “fire sales” have had on used car prices. Getting used car prices back near “normal” would help sales down the road. But would it be worth the cost? In Bailout Nation, cost owns you
http://www.thetruthaboutcars.com/the...-for-clunkers/
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Old 02-07-2009, 07:18 AM   #24
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Originally Posted by jhargis View Post
Why is it that these days "stimulating the economy" has come to mean "take out more loans?"

The government deepens national debt in order to encourage individuals to get a new car and in-turn the majority of them take out a loan for that new car. So basically, the government is going further into debt with programs that encourage people to keep borrowing money that they won't be able to afford to pay back. Isn't it a mountain of debt that got us into this mess in the first place? I know, we might as well just keep trucking that dirt in to make the mountain bigger and bigger

I know the government is trying to help and all, but I think they're making it worse... Good to see McConnell's stance though. There's that good 'ol saying "Money doesn't grow on trees" implying that money has to come from somewhere... You can't just magically "stimulate" an economy by manifesting some money out of nowhere, that money has to come from somewhere and be backed up by some sort of value. You can't pick an apple from an apple tree, photo copy it a bunch of times, and successully feed a nation with it. Same with money, so I'd like to know where our treasury keeps their magical and endlessly-fruitful money tree.
Unfortunately, right on.
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Old 02-07-2009, 10:02 PM   #25
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Originally Posted by jhargis View Post
Why is it that these days "stimulating the economy" has come to mean "take out more loans?"

The government deepens national debt in order to encourage individuals to get a new car and in-turn the majority of them take out a loan for that new car. So basically, the government is going further into debt with programs that encourage people to keep borrowing money that they won't be able to afford to pay back. Isn't it a mountain of debt that got us into this mess in the first place? I know, we might as well just keep trucking that dirt in to make the mountain bigger and bigger

I know the government is trying to help and all, but I think they're making it worse... Good to see McConnell's stance though. There's that good 'ol saying "Money doesn't grow on trees" implying that money has to come from somewhere... You can't just magically "stimulate" an economy by manifesting some money out of nowhere, that money has to come from somewhere and be backed up by some sort of value. You can't pick an apple from an apple tree, photo copy it a bunch of times, and successully feed a nation with it. Same with money, so I'd like to know where our treasury keeps their magical and endlessly-fruitful money tree.
Gotta say you've figured it out, when will Washington?

Also, doesn't the program of giving away junkers already exist by giving your car to a charity such as salvation army as a huge tax write-off?
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