Cash for Clunkers - Good or Bad Idea?

4110 messages, Last post on Nov 23, 2009 at 11:42 AM

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What is this discussion about? Legislation, Truck, Sedan, Wagon, SUV

For questions about how the program works or to discuss program details, please visit our discussion titled, "Cash for Clunkers - Does it Work for You?"

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#1554 of 4110 Re: Someone pays for it. [maryh3] by dtownfb Jul 10, 2009 (9:52 am)
Replying to: maryh3 (Jul 10, 2009 5:19 am) mary, i read your post with great interest and respect but when I read this line: "For a government supposedly founded on the principles that men were equal and should have equal rights to compete -- there is something rotten in the State. I have to agree with others that you are being very naive in your thinking. Money controls this country. We don't live in a democratic society. We live in a capitalistic society (officially we are considered a republic). The simple fact we only have two political parties and there is no realistic way a third party could ever become president or hold a major political office is added proof. Money drives our politics. Why else would millionaires spend $$millions to get elected to a job that pays $200k? that statement bothers me on other levels as well. I wish our country was run like this but history has shown time and time again this is not the case. for the record, i have written many times that we should do a government backed bankruptcy for Gm and absolutely nothing for Chrysler. A failure of both would have destroyed the suppliers and dealership network. Based on your thinking of not having TARP, you would have to pay cash for your car because banks would be very reluctant to offer credit.. Ask some of the salesmen that hang out on these boards how tough credit has gotten in the past year. Now imagine what it would be like if AIG and Citi had failed along with Lehman. think sales are down now.... and no Honda and Toyota would not simply fill the void. Both of those companies are struggling as well. The difference is their business model and credit rating allow them to survive in this environment. Both have major production reductions this year compared to the last several years. Nissan was in talks with Chrysler for a year to merge but backed out. Fiat merged with Chrysler without spending a dime. And there were no better offers for Chrysler! that should tell you how bad the auto industry is right now. I don't like all the spending or government involvement but again, this is not 2006 when everything was flowing nicely and the stock market was over 13,000. The fact that there was serious talk of nationalizing the banks should tell you how serious the situation is/was. BTW, even with Chrysler and GM coming out of bankruptcy, there is still a good chance that both companies fail. will I ever buy a Fiat/Chrysler or GM? F/C probably not but Chrysler hasn't sold anything in the past 15 years that has appealed to me. GM? I had a pretty bad experience with 2001 Malibu. I need more time with them plus there are still better cars available for the price.
#1555 of 4110 Re: Scrap Value Received under Program [kdhspyder] by steve_ HOST Jul 10, 2009 (9:56 am)
Replying to: kdhspyder (Jul 10, 2009 9:51 am) I took it to read that you could negotiate with the dealer for extra money based on the scrap value, over and above the $60 the dealer will get from the feds. I wonder if I can take off the catalytic converter on my minivan, trade it as a clunker, and not get tagged by the feds for the $11,000 fine or whatever it is? Replies to this message: kdhspyder (Jul 10, 2009 10:10 am)
#1556 of 4110 Re: Tangential bit of information [maryh3] by kdhspyder Jul 10, 2009 (9:59 am)
Replying to: maryh3 (Jul 10, 2009 5:44 am) Convenient hypocrisy. But thank you for participating in the program and helping to further the goals of improving the auto industry. Your assitance is appreciated. Replies to this message: dtownfb (Jul 10, 2009 10:06 am)
#1557 of 4110 Re: Tangential bit of information [maryh3] by dtownfb Jul 10, 2009 (10:03 am)
Replying to: maryh3 (Jul 10, 2009 5:44 am) Actually Gm and Chrysler came begging to Congress back in November for the bailout money. I think Rick Wagoner and Bob Nardelli got Raspberry nominations for Worst Performance by a CEO testifying in front of Congress. congress said no; bush said yes and i will use the TARP money and let my buddy Obama deal with it. Obama said GM and Chrysler show me your plans for revival; his auto task force said this plan sucks (yes it is an official term now). You want the money, you need to do A,B and C by xx date or go into bankruptcy. Oh yeah, Rick Wagoner, get to steppin'. Take advantage of the C4C bill. You aren't screwing the government, you are actually screwing the taxpayers (and we will not go into that any further). It's nice to debate all of this but you would be foolish not to use this to your advantage. last year I hated getting that $600 stimulus check that Bush authorized, but i cashed it and spent it.....on $4 gas What car are you looking to get?
#1558 of 4110 Re: Tangential bit of information [kdhspyder] by dtownfb Jul 10, 2009 (10:06 am)
Replying to: kdhspyder (Jul 10, 2009 9:59 am) Be nice kdhspyder. if my vehicle had qualified, I most certainly would have taken advantage of this program. but my Intrigue (178k miles) was too efficient.
#1559 of 4110 Re: Scrap Value Received under Program [steve_] by kdhspyder Jul 10, 2009 (10:10 am)
Replying to: steve_ (Jul 10, 2009 9:56 am) I sincerely doubt that, steve, but it's not absolutely clear either. The dealer gets nothing from the scrapper unless he can negotiate some deal to share in the scrap values...or unless the dealer dismantles the vehicle prior to sending the frame and engine to the scrapper. This is something that the trader could do on his own as well if he has the interest and wherewithall to do it. Dealers usually don't have any specific knowledge of what scrapped parts bring 'at retail'. They only have auction values from the Black Book and other sources. This is one of the multitude of clarifications that will be made in the next several days.
#1560 of 4110 Re: "those who forget history are...." [srs_49] by Mr_Shiftright HOST Jul 10, 2009 (10:14 am)
Replying to: srs_49 (Jul 10, 2009 9:18 am) All right then, picture Microsoft, Boeing and Intel all collapsing and declaring bankruptcy on next Monday morning? Scared yet? If one giant can go, why not others? And if others can go, what does that say about consumer confidence, the stock market, faith in government, etc. Exactly....horrendous case of the jitters. America's auto industry changed the world. We are not talking about the bankruptcy of Ms. Field's cookies here. Replies to this message: steve_ (Jul 10, 2009 10:22 am) Mr_Shiftright (Jul 10, 2009 11:20 am) erniesdad (Jul 10, 2009 11:12 am) kdhspyder (Jul 10, 2009 12:01 pm) srs_49 (Jul 10, 2009 12:20 pm) Mr_Shiftright (Jul 10, 2009 12:39 pm) srs_49 (Jul 10, 2009 2:13 pm) isellhondas (Jul 10, 2009 5:23 pm)
#1561 of 4110 Re: "those who forget history are...." [Mr_Shiftright] by steve_ HOST Jul 10, 2009 (10:22 am)
Replying to: Mr_Shiftright (Jul 10, 2009 10:14 am) She (Mrs. Field), got out of bankruptcy just last October. Things have been looking up since then, right? Khspyder, I suspect the salvage yards are all working the rounds trying to tie in relationships with the dealers. C4C should be a bit of a boon for stocking up on spare parts for their inventory. Replies to this message: Mr_Shiftright (Jul 10, 2009 11:20 am)
#1562 of 4110 Re: Tangential bit of information [erniesdad] by kdhspyder Jul 10, 2009 (10:45 am)
Replying to: erniesdad (Jul 10, 2009 6:55 am) Actually labor is a tiny tiny factor in the pricing of vehicles. It's almost not worth mentioning. Seriously, I've done these calculations. There are according the Harbour Report almost no differences in plant efficiencies in NA. GM's best are close to Honda's and Toyota's. Ford is right there with Hyundai. So that issue is not significant. The Jobs Bank program is finito. Non-issue What is significant are Fixed Costs, Legacy Costs and Debt Load. These were huge expenses that GM and Chrysler and Ford were fighting for the last 15 years. These are all but gone due to BK. GM for example.. .. had plants with the capacity to make 5 million vehicles yet it only sold 3 million units, shrinking to less than 2 million units this year. Those plants are mostly closed and gone. Pffft, ZERO cost. .. had nearly $40 Billion in Fixed Cost Bond Debt....now it has $9 Billion. .. had $2000 - $4000 per vehicle in Legacy Costs....now these are gone, ZERO. .. had staffing to support 6000 dealers....2400 of these dealers are now being closed. Variable costs for all vehicle makers are roughly the same. I know I was there for 25 years. The big issues that caused the D3 to be crushed are all related to Fixed Costs....and bad management. This is something that cannot be gauged yet. Are the managements of the new companies up to the task of making GM and Chrysler profitable. Ford seems to have an edge here.
#1563 of 4110 Re: Tangential bit of information [erniesdad] by kdhspyder Jul 10, 2009 (11:08 am)
Replying to: erniesdad (Jul 10, 2009 6:55 am) If Gov't Motors had gone Chap. 11 from the beginning, the taxpayers would have been saved billions of dollars, the featherbedded UAW contracts would have gone out the window, and instead of being a wholly owned subsidiary of the US Government, we'd have a reinvented car company capable of being a world beater. Sorry this statement is just wrong because you don't understand the ins and outs of bankruptcies. To go into Chap 11 the debtor must have pre-arranged financing in place, or soon after, so that it can continue to do business on a daily basis while it's in bankruptcy. Businesses while in bankruptcy need to continue to pay for lights and computer services and steel and gas and welding wire and..and..and ...etc, etc, etc. This is called Debtor-in-Possession financing ( DIP ) and it's controlled by the BK court to ensure against any questionable payments. Normally banks compete for this type of business because it's easy guaranteed money on a short term basis while the debtor is in BK court. But when did GM and Chrysler begin to fail?...last Fall. What else was happening last Fall? The entire banking system all over the world was failing at the same time. NO BANK IN THE ENTIRE WORLD was willing to offer the B2 any DIP financing. As a result Chapter 11 was out of the question at that time. Since Chap 11 was out of the question without any DIP financing being available the only other option was Chap 7 ( liquidation ) in Jan 2009. The Bush administration didn't want to go out with its final act being the murder of GM, arguably the most important industrial icon of the entire 20th Century, so it gave the B2 temporary loans and punted the ball 3 months downfield to let the Obama administration handle it. Replies to this message: british_rover (Jul 10, 2009 11:18 am)