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#1 of 16 A National "Clunker Plan" - Bad For Classic Enthusiasts?
Jan 15, 2009 (7:46 pm)
In an effort to stimulate the economy, it seems that some of our lawmakers are anxious to introduce a "clunker" plan, to spur auto sales. I don't know about you, but I'm not in favor of stimulating sales in this manner. I think it's an expensive, inefficient "make work" program, that will do little to reduce green house gases. One reason is that older vehicles tend to be driven less than newer ones.
Another reason is that some people will exploit the program by collecting money for cars that would be junked anyway.
A third reason is that it doesn't take into consideration the significant amount of pollution produced in manufacturing vehicles - from mining and processing the raw materials to transporting new vehicles to dealerships, and steps in between. And how about the environmental effects ot prematurely scrapping vehicles before the end of their useful lives?
See what you think...
"Wed Jan 14, 2009 6:41pm EST - WASHINGTON (Reuters) - Congressional lawmakers proposed a consumer incentive on Wednesday to help revive slumping auto sales and get the oldest, most polluting and less fuel efficient vehicles off U.S. roads.
Industry executives and automaker lobbyists believe bipartisan 'Cash for Clunkers' initiatives introduced in the House of Representatives and Senate offering up to $4,500 toward the purchase of a new vehicle is likely destined for economic stimulus legislation now taking shape.
'We face real challenges with trying to encourage drivers to trade in their older, less fuel efficient vehicles, particularly in this tough economic climate,' said Dianne Feinstein, a California Democrat.
A congressional aide said no decision has been made about whether to include the measure in stimulus legislation.
The approach would permit consumers to collect a voucher from dealers designed to offset the cost of a new car. Vouchers could be used to cover transit costs in some cases. Old cars would be scrapped.
Environmental groups agree that older sport utilities, pickups and vans are among the worst polluters and reducing their population will reduce greenhouse gasses.
Proposed Senate legislation would fund the program through 2012, potentially targeting up to one million vehicles annually.
Similar programs are underway in Texas and California and in Europe.
#2 of 16 Re: A National "Clunker Plan" - Bad For Classic Enthusiasts? [hpmctorque]
Jan 15, 2009 (9:34 pm)
Two questions. 1) How old does the "trade-in" vehicle have to be for it to qualify as a "clunker"? 2) Does this plan apply to the sale of a new domestic models only, or can new imports take advantage of this program too?
#3 of 16 Re: A National "Clunker Plan" - Bad For Classic Enthusiasts? (parm)
Jan 16, 2009 (5:11 am)
Excellent questions, parm. These details haven't been released yet.
One of my key concerns for collector car enthusiasts has to do with the supply of parts. Supporters of this program will say that although many old cars will be taken off the road, valuable parts will be saved. I don't buy this argument. Sure, some parts will be saved and later sold, but many will be lost forever. I think that a lot of cars will be completely scrapped as a result of this program, and the supply of scarce trim parts and other parts that collectors depend on will be reduced. The upshot will be that fewer hard-to-obtain parts will be available and/or they'll become more expensive. This will affect the lower end collectibles most, but also the next tier of collectibles.
The good news is that if this program is enacted it'll have no effect on expensive high end classics. That's nice, but the majority of collectors can't afford true classics, so this program would affect a large percentage of collectors and hobbiests.
From a purely emotional standpoint, I enjoy seeing old cars around. The fact that we have a very active topic entitled "I Spotted An (insert obscure car name here) Classic car Today!" means that many participants on Edmunds "Classic Cars" discussions feel similarly.
#4 of 16 If this is the plan I'm thinking of...
Jan 16, 2009 (6:04 am)
the $4500 only applies to vehicles model year 2002 and newer, that are EPA-rated 18 mpg or lower. That 18 mpg is according to the original window sticker, so if it was originally rated at 19, but has been downrated to, say, 17 with the new testing procedures recently put into place, that doesn't count.
Also, I don't know if the 18 mpg is the city MPG estimate or the combined. I'm guessing it's the combined. It's mainly designed to target big, heavy SUVs and get them off the road. So if you have some worthless, high-mile 2002 Expedition, the idea is to get you into something new and more fuel efficient. Also, you only get the money if you buy something new with fuel economy that beats the standard for its class by at least 20%.
That $4500 is reduced for older vehicles. I think for 1998-2001 it's $3,000. And anything older, it's $2,000. I have a gut feeling that anything 1977 and older might not even qualify, because they didn't start putting out fuel economy numbers until 1978.
I really don't think this plan would get too many really old cars off the road. For instance, take my '79 New Yorkers. The 360-2bbl has a combined EPA estimate of 14. I dunno what the city/highway ratings are, because the EPA website only lists the combined for 1979. Anyway, it would qualify for that $2,000, towards a newer vehicle.
Still, even though the market says otherwise, my New Yorkers are worth way more than $2000 apiece to me. I'm not about to scrap one (you can only do one car every three years) just to get myself into a new car payment on something that I might not even like. And most people who are still driving a 1979 New Yorker because they can't afford anything better, sure as heck aren't going to be able to qualify for a new car payment...even with an extra $2,000 kicked in for the down payment!
As for my 2000 Intrepid, it wouldn't even qualify for the plan, because it's too economical. I forget what the combined rating was, but it was rated 20/29 city/highway.
#5 of 16 If this is the plan I'm thinking of... (andre1969)
Jan 16, 2009 (6:34 am)
I'm probably in the minority, but I think raising the tax on gasoline would be a much more efficient way of reducing the negative impact of older gas guzzlers. For those who oppose higher taxes, the increase in the gas tax could be offset by a comparable reduction in other taxes.
#6 of 16 Re: If this is the plan I'm thinking of... (andre1969) [hpmctorque]
Jan 16, 2009 (6:41 am)
Actually, I'd be in support of a gas tax, as long as the extra revenue went towards something useful, such as alternative energy, improving roads, public transportation, etc.
Plus, with a gas tax, EVERYONE pays their share. We don't reward someone for buying an economical car or punish someone for buying a guzzler. You pay for what you use, and you reward yourself when you use less. Whether you drive less, drive more slowly, combine errands, or what have you.
Plus, small cars still put out pollutants. They still cause damage to the roads. Now, nowhere near what a big truck would do, but when you consider the fact that a smaller car has a smaller footprint, and smaller tires, on a PSI basis, it might be stressing out the road just as badly as a big car. So IMO, nothing should get a free ride.
#7 of 16 Re: If this is the plan I'm thinking of... (andre1969)
Jan 16, 2009 (7:00 am)
#8 of 16 Re: A National "Clunker Plan" - Bad For Classic Enthusiasts? [hpmctorque]
by MrShift@Edmunds HOST
Jan 16, 2009 (3:15 pm)
I'm generally a big fan of "incentive economics", so I have no problem with this basic package.
Most older cars are not worth saving anyway. We don't keep all our old hot water heaters and refrigerators (well in some states you do I guess ) so worn out utilitarian cars have no historical value and should be re-cycled IMO.
#9 of 16 Re: A National "Clunker Plan"- Bad For Classic Enthusiasts? (Mr_Shiftright)
Jan 17, 2009 (12:50 am)
Wouldn't raising the gasoline tax be a simpler, less bureaucratic and more cost efficient way to apply "incentive economics?"
#10 of 16 Re: A National "Clunker Plan"- Bad For Classic Enthusiasts? (Mr_Shiftright) [hpmctorque]
Jan 17, 2009 (8:29 am)
Of course, but logic and public policy have an inverse relationship.
Gas taxes hit everyone, and anything called a "tax" creates howls, so this kind of scheme is friendlier for politicos, and it takes on a half-baked "green" charade at the same time.