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#1 of 4291 A National "Clunker Plan" - Good or Bad Idea?
Jan 15, 2009 (8:17 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 4291 Re: A National "Clunker Plan" - Good or Bad Idea? [hpmctorque]
by Stever@Edmunds HOST
Jan 15, 2009 (9:12 pm)
I'm in - sign me up. Especially since my 10 year old minivan is only worth maybe $1500 on trade-in.
#3 of 4291 Re: A National "Clunker Plan"- Good or Bad Idea? (steve_ HOST)
Jan 16, 2009 (5:50 am)
"I'm in - sign me up."
I could also be a potential winner, since one of my cars is worth about $2,500. However, if this program were to be enacted, it wouldn't be free for society. It would ultimately be paid for by us tax payers, or by future generations. I feel that it would be a poor allocation of economic bailout resources.
#4 of 4291 Re: A National "Clunker Plan"- Good or Bad Idea? (steve_ HOST) [hpmctorque]
Jan 16, 2009 (6:16 am)
It would ultimately be paid for by us tax payers, or by future generations. I feel that it would be a poor allocation of economic bailout resources.
What a spoil sport. Just pass it on to the grandkids. I see no end to the bailout mania that has taken over the last 6 months. When the porn industry is looking for a bailout you know that no one is in charge of the till. It is only going to get worse. Your post already had me thinking about buying an old $300 wreck to use as a trade on a new BMW X5 diesel. You can get them up from Mexico. I am sure the fellow that works for me would take that much for his old Ford. It would not pass smog so that is another $1000 from the state of CA. The key here is how can we get back some of the wasted tax dollars?
#5 of 4291 I posted this elsewhere...
Jan 16, 2009 (6:25 am)
but it looks appropo here, too. If this is the plan I'm thinking of, 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.
#6 of 4291 Re: A National "Clunker Plan"- Good or Bad Idea? (gagrice)
Jan 16, 2009 (6:27 am)
That's an excellent example of an unintended consequence of this program, gagrice. Again, the cost of the tactic you describe would be borne by us tax payers and future generations.
#7 of 4291 Re: I posted this elsewhere... [andre1969]
Jan 16, 2009 (6:38 am)
Not enough of an incentive for me. I'd rather keep my 1988 Buick Park Ave. If I do ever replace it, it will probably be with another old car.
#8 of 4291 Re: I posted this elsewhere... [lemko]
Jan 16, 2009 (6:50 am)
Lemko, your Park Ave wouldn't even qualify if you wanted to take advantage of this incentive, because it's still too economical. FWIW, I think that 18 mpg figure is the combined rating. I'd imagine that very few cars made in the last 25 years would get a combined rating of worse than 18 mpg. It would mainly be larger trucks and SUVs.
I wonder how it would apply to vehicles that are so large they don't get EPA-rated? For example, the Ford Excursion was heavy enough to be exempted. Most 3/4 ton and up trucks have also been exempt for years now. I think even some versions of the Ford Expedition don't get tested anymore.
So if they don't get tested for an EPA rating, I wonder how they factor into this incentive program? Granted, most people don't buy a 3/4 ton truck as a daily driver, unless they really need it and nothing else will suffice. So maybe this would be a moot point?
#9 of 4291 Re: I posted this elsewhere... [andre1969]
Jan 16, 2009 (7:13 am)
It would mainly be larger trucks and SUVs.
That would not produce many takers. A 15 year old PU that runs will bring over $2000 any day of the week. A 2002 Chevy work truck with 100k miles will bring $4500 in trade. Easy bring $6000 on Craigslist. I am glad I did not offer Ricardo $300 for his old Ford...
#10 of 4291 Re: A National "Clunker Plan" - Good or Bad Idea? [hpmctorque]
Jan 16, 2009 (7:27 am)
I guess Congress has to feel like they are trying to do something. It still doesn't address the credit issue as many people still may not be able to qualify for a loan. Also we are at a time where people (myself included) need to tighten their belts and work on removing outstanding debt not incur more.
We've had unprecedented new car sales over the past decade. Most of this was driven by easy credit, rebates, incentives, wants vs. needs, etc. Enough is enough. No where is it written that people NEED a brand new car. There are millions of perfectly good used cars sitting on dealer's lots that are more affordable and will accomplish the same task as a new car. Heck we can toss in a can of "new car smell" to make you feel better.
Why bribe Americans to go further in debt? We are in this financial mess because of greed, wants vs. needs, and easy credit. Let's stop the shenanigans and get back to the basics. You buy a new car when you cna afford a new car. If you only have $4000 and terrible credit, pay cash for a used car. Run for two years while you re-establish your credit. Don't buy a $20k car at some horrific interest rate just so your neighbors think better of you.