Cash for Clunkers racks up 22,782 trade-ins and $95.9 million so far
When the government's Cash for Clunkers program returned 4,026 orders on its first full day of availability, some were surprised by the speed with which the sales booster took off. After only five days, the program seems to have picked up steam rather than lost it: 22,782 trade-ins have funneled through dealer lots in the 3-4 days since Monday when the program began. So far, dealers have requested $95.9 million in reimbursement money from the government, or about 10% of the funds that were supposed to keep the program running into November. The cars.gov website currently shows $75 million left for CAT3 trucks and $779 million out of $1 billion for everything else.
So far, the average rebate value is reportedly $4,209, which means most customers are eligible for the $4,500 voucher that requires a new vehicle purchase with a 10+ mpg improvement verses the model being traded in. Tuesday was the busiest day so far, with $51 million worth of reimbursements filed by dealers, and there were $27 million filed on Wednesday.
The National Automotive Dealers Association says the program will likely run out of money well before the November deadline. If C4C continues at its current pace, the program could end as early as September. According to the National Highway Traffic Safety Association, some 23,000 dealers have submitted registrations and 19,328 have been approved.
[Source: Automotive News, sub. req'd]
Reader Comments (Page 1 of 2)
Iridium 4:43PM (7/30/2009)
SO far 22,782 people have used a portion of my money to buy new cars. Since I have always been responsible and never bought a gas guzzler I am ineligible to use my own tax dollars to purchase a new car even though I have a 1985 Honda that I use as a winter beater. It is by all definition a clunker but isn't eligible for the program.
But a person who owns a 1996 Explorer in excellent condition that doesn't have to turn the car in at all uses it to get $3000 more than the car is worth.
Wonderful country we have. I seriously doubt that the majority of the trade ins are owned by low income people driving a clunker. My bet is that nearly every trade in is an old work truck sitting around rusting and barely driven owned by a person who has at least two other cars in the family.
Because I can't participate in this program I should be allowed to take a $4500 on my taxes this year. That would only be fair.
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Dude 4:49PM (7/30/2009)
That's Government for you.
Bought too big a house for too much money? Can't pay the mortgage? Don't worry we'll just make all the people who live within their means pay your mortgage.
homunculus 5:00PM (7/30/2009)
one month in iraq costs 9 times the cash for clunkers program.
Bob Denley 5:03PM (7/30/2009)
I really don't understand the limit of 18mpg... why not just say the new one has to be X amount more than the trade in? Guess that makes too much sense.
Dccapen 5:17PM (7/30/2009)
I'm not gonna lie. We used the CARS for a nice 97 Explorer we had sitting around that we use as a backup vehicle and to fill deer feeders. Now we can just use the 05 Explorer for that purpose and for trips where a bigger vehicle is better.
Figured the government was going to spend your money anyway.
Prius now owned.
J 5:26PM (7/30/2009)
I'm pretty sure people, during a recession, aren't trading in old work trucks that are "just sitting around" for new cars. If you stop and think about that for a second you'd see how ridiculous that is.
The bottom line is that a $1bn program that helps increase the fleet fuel efficiency of U.S. cars, while increasing sales a few percent, makes sense to me. I already pay too much tax but this is a program that I support. Government should stay out of a whole bunch of issues, but this addresses a collective action problem. In that way, it's completely unlike housing rescue programs, which I wholeheartedly oppose.
Kyakko 6:04PM (7/30/2009)
I think this is one of the better spending ideas. I've posted this before but the people mostly paying for this is the long run are the people trading in the new cars.
They do have to pay taxes on the new cars right? In California, it's 9.75 percent, so on an average $20K car they're giving back nearly 2K. Then registration and licensing fee which is around 300-400 dollars going back to government. Then new cars have higher yearly registration fee; over $100 or more dollars. These are just taxes going back directly back to the government. not including tax on higher 2 way insurance rates, tax on the sales commission etc...
So before people start complaining again....Dccapen, how much tax, admin fees and licensing did it take for you to get your Prius out the door???
*This is of course, this comes with some assumptions:
1.) that most clunker owners would otherwise either keep their cars or buy used cars.And nearly everyone lies on the purchase price of a use car to the DMV.
2.) you don't live in Oregon where there's no sales tax
Kyakko 6:11PM (7/30/2009)
Yes, I do realize I don't have the best grammar, but you get the general idea.
axio.matik 10:10PM (7/30/2009)
bob denley - One of the primary goals of the program (besides stimulating the economy) is to help improve the national fleet average gas mileage. This effect will be much more profound on vehicles that get low mileage. For example, Say a person has a full-size suv (14 mpg) and drives 15,000 miles a year. They would consume 1,071 gallons of gas a year. If they trade it in for something that gets 4 mpg better, they reduce their yearly gas consumption by 238 gallons.
Now lets say the same driver had a car that got 30 mpg (500 gal/yr). In order to save the same amount of gasoline each year, he would have to buy a car that got 57 mpg (263 gal/yr).
xtasi 4:44PM (7/30/2009)
19,328 dealers approved and 22k sales? averages to 1 per dealer. Not quite the huge surge that I was expecting. Is there to get a breakdown on the average mpg gains?
ie, average car traded in has 15mpg, new car/truck/suv/cuv/whaterver gets 24mpg?
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xtasi 4:46PM (7/30/2009)
@iridium: hate to break it to you, but that's how all democratic governments work.
I don't think European taxpayers feel that great that around 50% of their income gets taken for healthcare for everyone.
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Erik 4:52PM (7/30/2009)
Exactly. Don't you love when people talk about "my money". Newsflash - it's not your money. It's the government's money. You gave it to them April 15th, remember? Do you think the money you gave Best Buy for that TV last year is "yours" too?
I mean I despise this aweful progam as much as anyone, but there is no sense is getting all worked up about how the government chooses to spend it's money - you will make yourself miserable.
Nozferat 6:57PM (7/30/2009)
Actually you're wrong. Most Europeans are very happy that they have health care that isn't tied to their jobs. Their health care system is not perfect, but that is one expense that I'd be glad to pay for knowing that I'll always have as a safety net.
Americans don't quite understand nor appreciate the true magnitude of how important of a piece of mind that is.
Iridium 1:12AM (7/31/2009)
No buying a TV at Best Buy makes the money Best Buy's money. I made a choice to part with my cash and recieved something in return.
I didn't have a choice in giving the government my money. It was taken out of my paycheck before it was even put in the bank. Then the majority of it was spent by a federal government that never asked me how they should spend it. Other that 3 people within congress I have no ability to influence the decision of how to spend the money. The majority of the funds will be spent on programs that I will never see any benefit from.
Of a $3 trillion plus budget only around $650 billion will be spent on defense, which is the only major program that directly affects my quality of life and that is debatable.
So I stand by my statement of the government using my money and giving it to people that are not worthy to recieve it. When you purchase something you are making a decision that what you trade for is worth the cash you part with. The government says I make X ammount per year. That is only a paper number. What I really made is what ended up in my bank. If the balnace of that number has been taken away from me I should have complete control over where this money goes.
Every American should be able to chose where every one of thier tax dollars goes. You want to fund the "save the sea otters foundation" then go ahead and fund it. You don't want to pay into Social Security, you shouldn't have to. This was far easier when your local government had the most control, as the founding fathers intended.
In a true capitalist system every person has complete control over what they decide to part with their money for.
Stephen 10:21AM (7/31/2009)
@Iridium: "I didn't have a choice in giving the government my money. ... Then the majority of it was spent by a federal government that never asked me how they should spend it."
Ah, but you do have a choice which government you call your own. We live in a great democratic nation. The pendulum swings both ways and you not always going to be 100% satisfied with all the decision our ELECTED government makes, but it's still a great country and you still choose to live in it. So yes, you CHOOSE to give the U.S.A. your tax dollars. And the officials that got the majority of votes are deciding how it should be spent. So, while you personally were not asked how every dollar you paid the government should be spent (that's just not feasible), collectively, we the people, are asked every 2 or 4 years.
Dax 4:48PM (7/30/2009)
What a huge success! Way beyond the initial estimates!
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mr.ed 5:14PM (7/30/2009)
This will help clean out 2008/09 inventory and stop the floor plan interest of the dealers, who are in desperate need of stopping the expense. A great time to get a great deal, if you have any credit. Interesting that a tenth of the money's already gone.
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The Other Bob 5:10PM (7/30/2009)
If the average incentive is $4k, then only 250k cars will be sold before the cash runs out. That doesn't really boost sales in a market that will sell 10 million cars.
Its not really worth $1 Billion to increase unit sales by only 2.5%
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British_Rover 5:51PM (7/30/2009)
Umhh the money is going to run out two times faster then they thought I think that is a huge success. The original plan was for four billion dollars to be appropriated over one year to bump the overall annual sales by one million units. They couldn't get that bill passed so they compromised at one billion dollars for one quarter to see how things went.
VP 5:15PM (7/30/2009)
I have a 91 Maxima and the gov't decided it gets 19 MPG. But if you have a 1999 Explorer are something that gov't will be more than happy to help you. I truly need a new car because my current one is broken down yet i can't get any part of this rebate. BOOOOOO.
Any chance the program will be changed to include all cars that are over say 15 years?
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