Cash for Clunkers: Destroying Used Car Supply

[flintlock]

Re: Cash for Clunkers: Destroying Used Car Supply

Exactly. It reminds me of the morons who thought that repairing the hurricane damage in the gulf would be positive for the economy.

If it were that easy we should just spend all our time bulldozing and rebuilding each others' houses. I suppose that's their next ruse!? They're going to want me to tear down my 1200sf 1912 house because it's not as energy efficient as the 2500sf particle board and vinyl replacements that have been added to the housing stock over the last 10 yrs.

Just wait, that is coming.

[thunderdownunder]

Re: Cash for Clunkers: Destroying Used Car Supply

6 days and the parties over lads,the $1Billion boners have been vacuumed up
That will put a hole in the supply chain.
Now comes the hangover
Somethings smelling fishy? Unless of course you fellows imported those fine relics from Cuba (or do you all drive clunkers now?)
My personal view is MAX MOTORS + the AK47 sweetener was the cause. Ima investing in the "Bullet" makers YeHAAAAA
http://www.max71.com/

Auto ‘Clunkers’ Offer Suspended After Going Through $1 Billion
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By Angela Greiling Keane and John Hughes

July 31 (Bloomberg) -- The U.S. government’s $1 billion “cash for clunkers” program to spur new car sales is “suspended” after running through the money six days after it began, Senator Debbie Stabenow said.

Stabenow, a Michigan Democrat, and other lawmakers called for an infusion of taxpayer money to subsidize more new-vehicle purchases in the effort to revive dealerships and automakers while getting older, less fuel-efficient vehicles off the road.

“It is amazing that ‘cash for clunkers’ would be this successful this quickly,” said Stabenow in an e-mailed statement yesterday. “I urge Congress and the administration to provide additional funding.”

Named the Car Allowance Rebate System, the program provides credits of as much as $4,500 for the purchase of a new car when turning in an older vehicle to be scrapped. Lawmakers had expected the program to generate about 250,000 vehicle sales and to have enough money to last until about Nov. 1.

“Any doubt that the CARS program would jump-start auto sales is completely erased,” said Greg Martin, a General Motors Co. spokesman. “More than 200,000 cleaner, more fuel-efficient cars are on the road and a vital industry gets a needed boost. We hope there’s a will and way to keep the CARS program going a little bit longer.”

Officials at the White House and the Transportation Department declined to comment on the program’s status. A White House official, who asked not to be identified because no announcement had been made, said the administration was assessing the situation facing what had turned out to be an overwhelmingly popular program.

Transactions Honored

All valid transactions that have taken place so far under the clunkers program will be honored, the official said.

The Transportation Department had said this week that the money wasn’t running out.

“When we get close, we will start alerting dealers so they don’t get caught with a deal in the pipeline,” said Rae Tyson, a department spokesman, in an interview July 28. “We’re not going to leave them hanging. We’re not going to run out of money in a couple days.”

The administration’s reports on clunkers applications from dealers didn’t indicate that the funds were near exhaustion. The National Highway Traffic Safety Administration, which is running the program, said yesterday that 22,782 vehicles worth $95.9 million had been sold.

Representatives Sander Levin of Michigan and Betty Sutton of Ohio, both Democrats, said this week that they may try to extend the program if the initial allotment was spent swiftly.

‘Maybe Too Successful’

“This was a very successful program, maybe even too successful,” Senator Charles Schumer, a New York Democrat, said yesterday in a statement. “The program should continue, but perhaps with a tune-up so that we get the most stimulus, conservation and efficiency for the buck.”

Patrick McGowan, who with his wife bought a Hyundai Motor Co. Elantra on July 28 under the program, said he wonders whether the dealership in Benton Harbor, Michigan, where they purchased the car will be left without government reimbursement.

“I asked them when I was there what happens if the government runs out of money before the paperwork clears,” said McGowan, 37, an editor for a Catholic publication, in a phone interview yesterday. “They didn’t really know.”

McGowan and his wife Annie Vorhes McGowan, a University of Notre Dame Ph.D. student, wouldn’t have traded in their 1998 Isuzu Motors Ltd. Rodeo for a new car if it weren’t for the $4,500 rebate they got through the clunkers program and the additional $2,000 rebate from Hyundai, he said.

140,000 Miles

“Our car had 140,000 miles on it,” he said. “We in a million years weren’t going to buy a new car.”

Dealers, who are reimbursed by the federal government for the clunkers rebates they give consumers, are required to immediately junk the trade-in cars under the program by disabling the engines.

Jill Zuckman, a Transportation Department spokeswoman, declined to comment. Tom Gavin, a spokesman for the Office of Management and Budget, the White House branch that oversees government spending, didn’t respond to requests for comment.

Mike Moran, a spokesman for Ford Motor Co., said in an e- mail that he had no immediate comment.

“We had a lot of good feedback from dealers as far as how much traffic they had as a result of this program,” said Greg Thome, a spokesman for Toyota Motor Corp. “Everybody is surprised that the popularity was that immediate.”

Charles Cyrill, a spokesman for the National Automobile Dealers Association, said, “If the program is indeed suspended, NADA will continue to work with the Department of Transportation to emphasize the importance that every dealer is reimbursed for a valid deal.”

President Barack Obama signed the clunkers program into law June 24 after Congress approved it the previous week as part of legislation to finance the Iraq and Afghanistan wars.

To contact the reporters on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net; John Hughes in Washington at jhughes5@bloomberg.net

Link : http://www.bloomberg.com/apps/news?p...d=aWKYBKED5EKI

[don]

Re: Cash for Clunkers: Destroying Used Car Supply

‘Clunkers’ Auto Rebate Plan So Popular That It’s Broke

By MATTHEW L. WALD
WASHINGTON — New-car shoppers appear to have already snapped up all the $1 billion that Congress appropriated for the “cash for clunkers” program, leading the Transportation Department to tell auto dealers Thursday night to stop offering the rebates.

Though that may be the case, Smilin' Sammy and me, Vinny, both think this should be like a permanent part of our thing. It's good...you know, for business.

[seanm123]

Re: Cash for Clunkers: Destroying Used Car Supply

MSM in wonderment says “It is amazing that ‘cash for clunkers’ would be this successful this quickly”.


Now Pavlov’s dog is conditioned, don’t buy unless accompanied with a govt handout. No incentive from government to buy a house, no tax break? Not to worry, sit on the fence and wait for the 16K tax break.



Presently, why would anybody buy a house or a car without a free handout?



Result? You get a blip in the market and the pundits cheer from the rafters. What’s next? The slide down the slope of HOPE moves to the next chapter.

[don]

Re: Cash for Clunkers: Destroying Used Car Supply

Hey, don't worry about it. Vinny took care....

August 1, 2009
White House Says ‘Clunkers’ Rebate Plan Will Go On

By MATTHEW L. WALD

WASHINGTON — The White House said Friday that the “cash for clunkers” program was still alive even though new-car shoppers appear to have already snapped up all the $1 billion that Congress had appropriated for it.

Robert Gibbs, a White House spokesman, said the administration was looking for ways to continue the popular new program, which offers $3,500 to $4,500 for people who trade in an old car for a new one with higher fuel economy.

“If you were planning on going to buy a car this weekend using this program, the program continues to run,” he said.

http://www.nytimes.com/2009/08/01/bu...unkers.html?hp

[flintlock]

Re: Cash for Clunkers: Destroying Used Car Supply

MSM in wonderment says “It is amazing that ‘cash for clunkers’ would be this successful this quickly”.


Now Pavlov’s dog is conditioned, don’t buy unless accompanied with a govt handout. No incentive from government to buy a house, no tax break? Not to worry, sit on the fence and wait for the 16K tax break.



Presently, why would anybody buy a house or a car without a free handout?



Result? You get a blip in the market and the pundits cheer from the rafters. What’s next? The slide down the slope of HOPE moves to the next chapter.

I'm still waiting for that "live within your means" handout.

[Ghent12]

Re: Cash for Clunkers: Destroying Used Car Supply

I'm still waiting for that "live within your means" handout.

Don't hold your breath.
(Seriously, it would be fatal.)

[don]

Re: Cash for Clunkers: Destroying Used Car Supply

Like cans, you don't get your dough until they're crushed....and dough they got!

Dealers Race to Get Their Clunkers Crushed

The White House and Congress may be giving the “cash for clunkers” program a reprieve, but one can’t help wondering how many dealers and customers will have the confidence to go forward at this point. Things sound like a total mess in the showrooms.

“There is absolute frustration across the board,” Alex Kurkin, a lawyer based in Miami who represents several car dealerships, tells The Lede today. “As of this morning, they’re not really confident about any deals, and no one can give them advice about what they should be telling their customers.”

One thing still not clear is how many older cars have actually been sold and scrapped with the original $1 billion, and how many more the new $2 billion will be able to cover. Mr. Kurkin tells us that the government Web site where dealers are supposed to register their deals has been crashing, and the dealers haven’t been able to plug in their information.

We spent a couple of days earlier this week following the whole complex program, from dealer to scrap heap, and found twists and turns in it that are making it a nightmare now for everyone involved.

The program requires that the clunkers be put out of service for good, so dealers must destroy the engines on cars that are traded in. We watched this process yesterday at the DCH Paramus Honda in Paramus, N.J. It is quite laborious and potentially dangerous. And it certainly is final.

So here is one question: With the program now on shaky ground, even with a new infusion of money, what consumer and what dealer will risk rendering an engine irretrievably unusable?

Well, as it turns out, a lot of them are doing so, because unless the dealers can prove to the government that they have killed the engines and scrapped the cars, the government will not reimburse them for the $3,500 or $4,500 discount that they have given the customer on a new, more efficient vehicle.

Barry Magnus, the general manager of DCH Paramus Honda, told us he was owed more than $80,000, and he wondered if he would ever see it. The government has said it would take 10 days to reimburse the dealers, but that was before the program apparently ran out of money and devolved into chaos Thursday night.

Today, dealers are frantically trying to move the old trade-ins to the scrap heap so that they can get reimbursement before the money tap shuts off. Until they can certify that the car has been decommissioned, they cannot submit their paperwork to be repaid.

“Oh my God, what a mess today,” Sally Ann Maggio, who co-owns Hackensack Auto Wreckers, also in New Jersey, said on Friday.

Hey, watch the Jersey cracks....

http://thelede.blogs.nytimes.com/200...rs-crushed/?hp

[thunderdownunder]

Re: Cash for Clunkers: Destroying Used Car Supply

Like an Alcoholic bender feed by free booze (for as long as it is available) the HANGOVER will be painful.
Where does the money go -mostly out of the country.
Local inventory will fall, Durable goods orders will rise with a bang, Fire economy will cheer the auto loans and call for more free booze as the stock prices rise.
Then the music stops, the bar is shuttered, the dance floor will be littered with detritus.
Then comes the silence and repurcushions of excess.

NOT good "free" market policy

You will pay tomorrow!!

http://www.youtube.com/watch?v=XdeIZkZo2PM

This is what you need to stop doing now. From the same people who it, would appear predated even Itulip

http://www.youtube.com/watch?v=m5KiZ8Jp-JM&NR=1

I repeat myself but as Cicero was wise enough to understand
The Roman Republic, the foremost power of its day, had reached its zenith. Its leadership had attained unbounded wealth and unstinted power. The rulers were intolerant of restraint, indifferent to the demands of the middle class, and contemptuous of the Constitution which was designed to curb their ambitions. The time was some 70 years before the birth of Christ.

Young Marcus Tullius Cicero, then a student of law under old Scaevola, the eminent lawyer of his day, was just about to suffer his first great disillusionment with grasping government. Rome, by force of arms, guile and trickery, dominated the world. Its citizens had grown slick and fat, careless of their rights, and had fallen prey to the ruthless politicians who craved more and ever more power and riches.

He preached (in vane) but
His friends, the lawyers, the doctors, and the businessmen told him: "We do not meddle in politics. Rome is prosperous and at peace. We have our villas in Caprae, our racing vessels, our houses, our servants, our pretty mistresses, and our comfort and treasures. We implore you, Cicero, do not disturb us with your lamentations of disaster. Rome is on the march to the mighty society, for all Romans."

Still he could understand.
"The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced, if the nation doesn't want to go bankrupt. People must again learn to work, instead of living on public assistance."
-- Cicero, 55 BC

[roxtar]

Re: Cash for Clunkers: Destroying Used Car Supply

Like an Alcoholic bender feed by free booze (for as long as it is available) the HANGOVER will be painful.
Where does the money go -mostly out of the country.
Local inventory will fall, Durable goods orders will rise with a bang, Fire economy will cheer the auto loans and call for more free booze as the stock prices rise.
Then the music stops, the bar is shuttered, the dance floor will be littered with detritus.
Then comes the silence and repurcushions of excess.

NOT good "free" market policy

You will pay tomorrow!!

I did a little repo work a few years back but got out of it when I finished college...... Perhaps in a few months it'll be time to get back into the game.

[flintlock]

Re: Cash for Clunkers: Destroying Used Car Supply

Like an Alcoholic bender feed by free booze (for as long as it is available) the HANGOVER will be painful.
Where does the money go -mostly out of the country.
Local inventory will fall, Durable goods orders will rise with a bang, Fire economy will cheer the auto loans and call for more free booze as the stock prices rise.
Then the music stops, the bar is shuttered, the dance floor will be littered with detritus.
Then comes the silence and repurcushions of excess.

NOT good "free" market policy

You will pay tomorrow!!

http://www.youtube.com/watch?v=XdeIZkZo2PM

This is what you need to stop doing now. From the same people who it, would appear predated even Itulip

http://www.youtube.com/watch?v=m5KiZ8Jp-JM&NR=1

I repeat myself but as Cicero was wise enough to understand
The Roman Republic, the foremost power of its day, had reached its zenith. Its leadership had attained unbounded wealth and unstinted power. The rulers were intolerant of restraint, indifferent to the demands of the middle class, and contemptuous of the Constitution which was designed to curb their ambitions. The time was some 70 years before the birth of Christ.

Young Marcus Tullius Cicero, then a student of law under old Scaevola, the eminent lawyer of his day, was just about to suffer his first great disillusionment with grasping government. Rome, by force of arms, guile and trickery, dominated the world. Its citizens had grown slick and fat, careless of their rights, and had fallen prey to the ruthless politicians who craved more and ever more power and riches.

He preached (in vane) but
His friends, the lawyers, the doctors, and the businessmen told him: "We do not meddle in politics. Rome is prosperous and at peace. We have our villas in Caprae, our racing vessels, our houses, our servants, our pretty mistresses, and our comfort and treasures. We implore you, Cicero, do not disturb us with your lamentations of disaster. Rome is on the march to the mighty society, for all Romans."

Still he could understand.
"The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced, if the nation doesn't want to go bankrupt. People must again learn to work, instead of living on public assistance."
-- Cicero, 55 BC

And you know what they did to him!

[thunderdownunder]

Re: Cash for Clunkers: Destroying Used Car Supply

Hey I don't stick a screwdriver in a wall socket and I keep a low profile
OK!
Benefits of a classical education haunt me to this day - "Oh that history would deny its self to be repeated but alas, we are forever trapped in a circle of natural traits that predict human suffrage and make fools of the great men, now past"

[mikedev10]

Re: Cash for Clunkers: Destroying Used Car Supply

Regular itulip readers heard about this new $4,500 rebate program here, but I hadn't heard the details of the program until I was listening to the radio today, and I had to check it out before asking other folks about this.


Source: cars.gov (emphasis added)

Hmm. So, the Federal government is giving your tax dollars to people to destroy the supply of used cars?

With the disparity between classes widening, this law seems to make it harder for poor people to afford a usable car (or fix up a damaged one) without indebting themselves to the rentier class.

Whaddya think? Horrific? Diabolical? Ingenious?

made a cash for clunkers dashboard - http://mike.developer10.com/clunkers.swf

[cobben]

Re: Cash for Clunkers: Destroying Used Car Supply

"Benefits of a classical education haunt me to this day "

Heh-heh, don't ask me what use I have had through the years of having studied Latin for 2 years in junior high school . . .

My classical culturally-wurming grandmother once gave me as a birthday present a book entitled something like "Greek and Roman Epitaphs", a simply fantastic present for any teen-age boy, don't you think?

[Fiat Currency]

Re: Cash for Clunkers: Destroying Used Car Supply

An excerpt from Doug Casey ...

(Something about the law of unintended consequences comes to mind)

http://www.caseyresearch.com/displayCdd.php?id=225

A clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year.

A vehicle that travels 12,000 miles a year at 25 mpg uses 480 gallons a year.

So, the average Cash for Clunkers transaction will reduce U.S. gasoline consumption by 320 gallons per year.

They claim 700,000 vehicles so that's 224 million gallons saved per year.

That equates to a bit over 5 million barrels of oil. 5 million barrels is about 5 hours worth of U.S. consumption.

More importantly, 5 million barrels of oil at $70 per barrel cost about $350 million dollars.

So, the government paid $3 billion of our tax dollars to save $350 million.

The government spent $8.57 for every dollar saved.