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Congress has passed a $2 billion extension of the popular “cash for clunkers” program, clearing the legislation for President Barack Obama’s signature. The Senate passed the extension Thursday evening. The House approved the measure last week.
Lawmakers made sure to keep the popular program alive before heading home for a monthlong vacation.
Acting with unusual haste, the Senate readied a $2 billion fill-up Thursday night for “cash for clunkers,” the economy-boosting program that caught the fancy of car buyers and instantly increased sales for an auto industry long mired in recession.
Supporters of the program hailed its effect on the auto industry — which had its best month in nearly a year in July — as well as its claimed environmental benefits.
“The reality is this is a program that has been working. Consumers believe it’s working. Small business people believe it’s working. People who make steel and aluminum and advertisers … and everyone who’s involved in the larger economic impact of the auto industry believe it is working,” said Sen. Debbie Stabenow, D-Mich.
The legislation had its share of critics, though, most of them Republicans.
The average replacement car gets almost 10mpg better than the clunker it replaced. All but one were compact and medium-size cars – and the trade-ins were almost all SUV’s and trucks.
#25, even for 10 years you have $75 a ton. Generally offsets are about $10 a ton.
And that’s with the wost case numbers. The reality when you include building more used car parts, and building the new car, and that people aren’t trading in for a tinier car, the CO2 savings are not very high.
For example, trading in a 1997 Jeep Grand Cherokee 4WD 4.0L that is used 15000 miles a year for a Ford Escape FWD 2.5L 4Cyl Automatic saves 2 tons per year, not 6.
I have to say I don’t really understand how this is working so well.
You have to buy a new car – which means you must have access to >10k.
We are in a recession, and people are losing their jobs. Presumably if you have a clunker – certainly as a main car, you don’t have much money.
So who’s buying all these cars? Presumably the majority must have been bought on credit – not exactly desirable, seeing as lack of saving seems to be a big part of the problem.
#29, freddie,
invoking censorship is really not what you want.
I disagree. The right wing nuts new method includes shutting up anyone that disagrees with their gawd given right to invent facts.
#31 MikeN
Fair enough. I was only highlighting the number for a year doesn’t really say much.
Does assume carbon credits price will remain fixed – they will go up. And so will fuel prices.
You could argue that the price of a carbon credit right now is hardly likely to be a good measure of the damage it causes. Or you could argue that carbon causes no damage, so the whole thing is stupid.
Either way – you can be confident that the man made economic motivator that is carbon credits is not an accurate measure of the effects (or lack thereof) on the world.
#31, Lyin’ Mike,
…saves 2 tons per year, not 6.
Which is two tons less than would be dumped otherwise. Not to mention the cost of the imported oil or extra pollution from failing systems. And the Escape has almost as many cup holders.
Keep parroting those bullet points jbenson2.
Let’s sum up the neocon view. Tax breaks for billionaires good. Cut a middle class family a break on a new car and the country is going to fall into the ocean.
Stopher,
Here’s a conservative view for you, how about you cut my middle class taxes and let me spend the money what I want?
I follow the rules and it seems as though I get screwed every time. I don’t need a house yet Obomba gives away 8k to new home buyers. I don’t need a new (I want one I just don’t need it) car and Obomba gives them 4.5k (or 3.5k).
At least when GW did it last year I got money and could spend it the way I want and not get forced into buying something for feel good reasons. I’m not saying GW’s plan was better or worse, I’m saying that it is more beneficial to more people. Now that I think about it it was a better idea to give people their money back.
Simple, want to give the economy a boost let us spend the money where we need to.
Too bad they didn’t do the CARS program BEFORE we bailed out GM and such.
Then again I am sure there are people out there who complain about anything and everything. My favorite is the “If you can’t run the CARS program, you can’t update health care” Well health care right now is basically broken so I actually congratulate our administration to at least start talking about fixing things. They haven’t done anything yet. Is it me or are there that many sheep who listen to Rush L.
>7 out of 10 bought American? I guess they’re prepping for the next cash for clunkers.
That’s because many of the ‘foreign’ models are built in US factories.
>Does assume carbon credits price will remain fixed – they will go up. And so will fuel prices.
They could buy the offsets now, for $100 million.
We keep hearing that fuel prices will go up. That just means that people will be buying those fuel efficient cars and dumping these guzzlers sooner, making the environmental benefit of this program even less.
>The “destruction of the replacement parts” issue is of value only to those who make or sell (or salvage) those parts. It’s no favor for Joe Sixpack….
Except for those who want to put that part in their car. You can get a replacement headlight for $80 or buy a new one for $200. Used engines or a new one for your 1994 car?
The trickle down theory at its worst:
Perfectly good automobiles are being trashed that could be used by those that cannot afford that new vehicle, even with my help paying for one.
Auto repair shops miss the businees those ‘clunkers’ provide
Tire dealerships won’t be putting tires on them
Auto parts retailers won’t be selling parts to anyone for their repair.
Here’s another idea to help the economy- let’s all take a brick and throw it through our windows. Brick manufacturers and glass replacement companies will surely benefit!
Will the taxpayers buy that brick for me?
Mike,
The whole point is to get those inefficient engines off the road. ALl the rest of the parts on the car can be resold. If the engines were resold the program would be a waste of time. I repeat, the whole program’s purpose is to take those inefficient engines off the road.
A better question to ask is why aren’t (then again, maybe they are) e-car converter companies buying up the nicer discarded bodies?
According to the governments own website the cars must be crushed or shredded within 180 days. No resale of good bodies to turn into e-cars and no salvage other than the scrap value. Every news report I have seen shows the same thing, nice cars getting crushed after the engines are fill with silica.
For Dallas, who I respect so much here is the info from the website.
” These certifications, which are legally binding on the disposal facility, include a certification that the CARS trade-in vehicle will be crushed or shredded onsite within 180 days of receipt of the vehicle, that all toxic or hazardous components will be removed and properly disposed of prior to crushing or shredding, and that the vehicle will not be transferred to any other disposal facility before it is crushed or shredded. “
1. This is not about health care – it is an economic stimulus program. The sole purpose was to get people spending money again.
2. This program will not result in a housing finance fiasco – you have to apply for loans from banks that are gun shy – you have to have a good credit score and income – the loans are not just being handed out.
3. This is destroying the cars that we would not want people of ‘low income’ purchasing as used – not with gas heading back to $5+ per gallon.
I used the program to get rid of a ’95 pickup that was not a ‘perfectly good car’ and that I would not have traded in for several more years had it not been for the program. The electrical system was flakey, AC was hosed, dents, dings, etc. This is the type of vehicle that would not have been good for ‘someone else’ to have and since I could only have gotten maybe $800 for it on trade, that trade was not going to happen.
There are things that could have been done to make this a better program – like simply offer the program to anyone if you could improve your gas mileage by 10MPG or more. But then you would have been getting rid of “perfectly good used cars”.
One interesting item to note, SMART cars is offering a $99/month payment for a Cash For Clunkers trade in – but that finance package is a little ‘suspicious’ as it includes a ballon payment at the end.
>The whole point is to get those inefficient engines off the road.
Then the government could have just bought the cars off the used car lots. Or from poor people who are driving them, instead of giving money to the better off while making the poorer people pay more for a car or do without.
#46, Lyin’ Mike,
I just drove past two New Car Dealers and one used car lot. The two New Dealers have reduced their new car inventory substantially. Three months ago they were both full, today they are less than half.
BUT, their used car lots and the Used Car Dealer still had full or near full lots.
So please explain how the “poor are suffering” because they can’t buy a car?
44,
Mr Diesel,
That may be the case. I saw an interview on one of the idiot networks where they were interviewing a scrap yard that was “losing” money because they had to crush the engines and could only sell the other parts.
However, steel is still worth money, too, and the increased number of large heavy vehicles junked will give scrap yards other additional revenue.
I’d rather have had the process occur in other fashions myself, but this program is good enough and does achieve its goal of increasing tyhe average gas milage of the US fleet. That alone is worth EVERY PENNY of this, as every penny saved on gas is one less we have to give to those ratf*cks tht want to kill us.
Why do you people want to support Saudi Princes?
#44 Diesel.. “No resale of good bodies to turn into e-cars and no salvage other than the scrap value”.
Never done any research that suggests it is profitable or even practical to turn a old junk car into an e-Car (never mind aerodynamics).
I would say (as an engineer), it is as ridiculous an idea as straightening out a transporting crushed cans, straightening and washing to refill them.
#48 smartalix
Steel scrap prices are way down right now since the Chinese aren’t willing to pay more. About $100-250 depending on the region of the country. Given say an average of 3,000lbs per vehicle that runs $300-750 per car scrap. Not much. I have military trailer I’m scrapping for about 2 tons and I’m waiting for prices to go back up.
No, I don’t want to support Saudi’s or anyone overseas but yet you are willing to let the Chinese drill off our coast when we can’t.
#10
“Walked into” a 1.9 trillion dollar deficit?! I blew my coffee over my desk when I read that. If by “walked into” you mean “walked into the disaster he created” then sure.
Bush’s deficit at the end of 2008 was about 570 billion of which a huge chunk was TARP money and thus expected to be paid back. Obama’s estimated deficit is anywhere from 1 to 2 trillion. That means anywhere from 2x to 4x bigger than Bush’s. You cannot blame Bush for the crazy spending that Obama has done since he took office and none that includes what he has in mind for health care!
The Cars for Clunkers program was a complete waste of money. Don’t we have a better use for $2 billion? What part of “we don’t have the money” does the government not understand? Obama’s running up a near 2 trillion dollar deficit and then pissing some of that money away to get a few older cars off the road. Whoop-de-do-da-day. Tell you what, I’ll buy into such a program when the government is out of debt. Then we can talk about whether such a program is worth the cost.
This sounds more like a one-two punch against the all electric cars and hybrids. First the major makers get bailed out. So they no longer even have to pretend they’ll be making them, anytime soon. And then the dealers of all the current stock and models, get this bailout in disguise. So citizen will have a new non-electric car to wear out for the next decade. And wouldn’t be looking for, or asking for an electric car. I’ll bet that as long as there is even the slightest hint of such a demand. Congress will dangle more CFC extensions in the public’s face. And if all that failings, the Oil czars will drop their price to kill the technology.
Interesting. Cash For Clunkers. “CFC”. Weren’t we once told that CFCs were bad for the environment. Well, maybe somebody was right. Just got the wrong type of CFC to complain about.
At least as things stand now alcohol for fuel is using grain for fuel. Anyone who thinks that doesn’t impact food costs doesn’t think but it is good for some farmers. It isn’t good for people feeding livestock or buying meat.
Many studies suggest that people who buy fuel sippers drive more miles so in the end they use about the same amount of fuel as those that don’t buy fuel sippers. Not sure if that’s true in this case.
I’m sure Cash for Clunkers is increasing business at least in the short run. I also doubt that the people that just bought new vehicles will do so again any time soon. I do expect car sells to plummet when the cash for clunkers program ends.
How come I never see mention of the revenue to states that collect sales tax? The US Government gives $4500 for the clunker. Given the price of efficient new cars, the state collects about $1300 tax on each cash-for-clunkers sale. No big deal I guess. But the buyers really only get $3200 of assistance and the state gets the rest. Except high pressure sales at the dealership eat away at the $3200 by selling extended warrantees, paint protection, prepaid service plans, et-cetera, to distracted buyers who hadn’t prepared their defense due to cash-for-clunkers. Ahhh, but new cars smell nice. And 10 mpg savings helps boost spirits.
as I said,
I HAD seen sales of $4000-6000 OFF the prices BEFORE this happened..
NOW they wont even DEAL.
Fusion despite your anecdotes, 250 thousand cars destroyed is 250 thousand cars destroyed. Basic laws of supply and demand, which you might have learned if you could read.
#56, Lyin’ Mike,
True. A finite number of anything destroyed is that finite number destroyed. However, the manufacturers have been building that finite number PLUS another untold number of vehicles. The extra number have been collecting on manufacturers lots and dealers lots.
Have you forgotten this post?
http://www.dvorak.org/blog/2009/01/21/automakers-struggling-to-find-places-to-stash-unsold-vehicles/
Check out some links to see various stockpiled cars.
What will future generations be saddled with by more decades of sending untold trillion$ to countries that hate us, enriching them beyond dreams of avarice and impoverishing us?
The price of used cars has been going up for at least six months; as fewer and fewer people can afford new ones, there’s more competition for the old ones.
The repair shops, tire dealers and parts retailers will be happy to service the new cars that have replaced the old clunkers, (and they save money and space by not having to keep so many old parts). Remember, it’s a one-to-one replacement deal. Amazing the arguments people will make (and apparently believe), that giving a boost to the economy will kill the economy. I guess that’s why hungry people beg you not to feed them? Reminds me of Abbot & Costello’s Mustard Sketch.
#58
The repair shops won’t be servicing new cars as there will be no substantive service on them for four or five years.
I wonder if in the “carbon gain” calculations that the greenies have claimed, if they accounted for all of the energy consumed in disposing of the older vehicles as well as the manufacturing of the new vehicles. I doubt it.
If its a boost to the economy that you want, why not just give people their money back? After all, you are taking money from people and giving it back to some others. Why not just stop taking it in the first place? I bet that would result in a far greater boost to the economy than this flower child subsidy to the car manufacturers. You don’t want to give it back to the people? Fine. Use it to pay down the ginormous debt that the messiah has racked up. Either way, pissing it away so Jed can get a new pickup truck for his old pickup truck is a waste taxpayer money.
Well of course it works. Its what you call “consumer-side stimulus”, which is what republicans absolutely HATE.
Their psychotic misguided political theories adore the concept of “supply-side stimulus”, essentially give money to the rich and it trickles down. Problem is it has NEVER worked.
Consumer-side stimulus works immediately, whether in the form of a tax cut for the lower to middle class, or a subsidy that the consumer can take advantage of.