• Jan 14, 2010
Cash-for-Clunkers was among the more watched auto-related story lines of 2009. With the industry hurting, the government provided cash vouchers of between $3,500 and $4,500 to anyone who turned in a vehicle that was eight (or more) years-old and with between two and 10 miles-per-gallon worse fuel economy numbers than the new car or truck with which it was replaced. The program went from fledgling idea to a done deal in a matter of a few months, showing that the U.S. government is capable of move quickly when it really wants to, albeit with the help of a big fat $3 billion check.

The feat was reportedly so impressive to Department of Transportation Ray LaHood that he openly wondered whether the program should be reincarnated for 2010. Motor Trend reports that LaHood told reporters at the Detroit Auto Show that Clunkers was "the most wildly successful program ever, selling 800,000 cars in less than 30 days." It sounds like LaHood was really impressed with how C4C panned out, but will the program and its multi-billion dollar price tag resurface in 2010? LaHood says the DOT won't be begging for any spending money, and he insists that any decisions will need to be made by Congress in the year ahead.

Motor Trend
says that despite LaHood's hands-off approach to Clunkers, there are persistent rumors that C4C could resurface in the second quarter of 2010 with perhaps less bountiful tax incentives and a less exorbitant price tag. We have no idea if C4C has any chance of making a cameo in 2010, though we're thinking that the consistent uptick in sales after Clunkers expired shows that the industry is beginning to improve without additional government intervention. Why spend money propping up an industry that seems to be doing a swell job of helping itself? Let us know what you think by heading over to the Comments and giving us your two-cents.

[Source: Motor Trend | Image: Justin Sullivan/Getty]


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    • 1 Second Ago
  • 81 Comments
      • 5 Years Ago
      AB: "With the industry hurting, the government provided cash vouchers of between $3,500 and $4,500 "

      Meaning: "With the industry hurting, the government provided _other_taxpayer's_money_ of between $3,500 and $4500 to anyone who turned in a vehicle..."

      Fixed!

      Whoops, sorry. Really meant "With the industry hurting, the government provided _money_borrowed_from_China_that_will_be_repaid_by_taxpayers_and_their_offspring_ of between $3,500 and $4500 to anyone who turned in a vehicle..."

      Whew! Now, Fixed!
      • 5 Years Ago
      NOT FRICKIN' AGAIN!!!!!!!!!!

      LET THE MARKET HANDLE IT'S DAMN SELF. THE THREE BILLION DOLLARS AND THE MESS MADE FROM THE FIRST ONE (after less than a month of operation) STILL ISN'T CLEANED UP.

      THE GOVERNMENT CAN'T AFFORD IT, BY THAT I MEAN THE TAXPAYERS.

      And, YES, I mean to yell, scream, shout, curse, holler, or anything else I can do to keep that debacle from happening again.

      There was not one single good side to that program. EVERYTHING about it was a down-side, for EVERYONE involved.

      I thought we were done with that $#!+.
        • 5 Years Ago
        Every dealer I know has been paid in full. We were paid in full months ago.

        All the clunked cars are off their lots and sitting in a junk yard waiting to be parted out then crushed. They are even extending the time they can sit on the yard so the people complaining that they won't be able to get parts before the cars are crushed can stop complaining.

        The used car market for those vehicles was not effected a bit. I have access to historical wholesale data going back years and for the most part the value of cars that were traded in under C4C performed the same as they did in years past for the same season. The market for used cars was already pretty strong so values were going up but the cars that were going up in value weren't C4C contenders. They were going up in value because the supply of off lease vehicles had dried up to almost nothing.

        The best example of this is the Volvo XC90. Here is a vehicle where only four or five were traded in under C4C and only FWD 2010 models were eligible to be purchased as new under C4C. They make almost no FWD XC90s and at the time only a hundred or so 2010 MY XC90s were in the country. Ok so that means the value of those vehicles should not have gone up during the program or right after it if C4C was the primary cause of value change on used cars.

        The Value of XC90s skyrocketed from July to November. XC90s with twice the miles were selling for several thousand dollars more in October then they were in the spring. The reason that was happening is that all the off lease cars were gone so supply had been constrained considerably. For years you could lease a XC90 for 450-550 a month with minimal out of pocket. Now that same lease was 650-850 and they wanted 3,000 out of pocket for a longer term lease. No one was taking that deal so they were buying pre-owned ones and further constraining the tight supply.
      • 5 Years Ago
      I've always had a problem with C4Clunkers. It goes against simple supply and demand logic. We're pushing new cars into a market already saturated with countless used and repossessed cars (i.e. repofinder.com). Now new cars depreciate faster, more Americans are in debt, and more repossessions are on the horizon.
      • 5 Years Ago
      The market has already recovered. No need for more government PORK.
        • 4 Years Ago
        Err... I don't think so. If the unemployment rate starts to become a single digit number then I will believe you. Right now it's hovering around 10%.
      Carlos
      • 5 Years Ago
      I'd like to see a C4C that only applies to vehicles manufactured in the US. It would allow more money to stay in the US rather than go completely to foreign manufactures.
        Carlos
        • 5 Years Ago
        @Carlos
        Like someone said earlier America has a huge deficit with China and Japan. Though doing something like this wont be a huge factor it tipping the balance back into our favor it will be a step in the right direct. Now we just need to work on lowering our budget deficit, paying off debt bonds and then tell china to take a hike.
        • 5 Years Ago
        @Carlos
        Mofan,

        the numbers you are referring to exclude petroleum:

        "The petroleum deficit makes up more than 50% of the total U.S. trade deficit from November 2007 to October 2008 (with a peak of 64.5 % in July 2008), and again from February 2009 to October 2009, reaching 63.7% in June 2009. In November 2009, petroleum accounted for 54.6% of the total goods and services trade deficit."

        http://www.census.gov/foreign-trade/statistics/graphs/PetroleumImports.html

        The more cars go on the road in the new largest car market (China) and in the developing world, the more the price of oil will go up, and the more money we will ship out of our country.
        • 5 Years Ago
        @Carlos
        We have biggest trade deficits with China and Japan, not much oil from those countries.
        Screw them, exclude asian countries
      • 5 Years Ago
      If the Feds do this again can they at least wait until the Fiesta is out.
      • 5 Years Ago
      As much good as the program probably did for the industry, I don't want to see it happen again. Too many useful 4x4s and pickups were destroyed and too much money was spent by a government that is trillions of dollars in debt. Also, I plan on buying a used cherokee in the next 12 months as a weekend vehicle and I don't want the rest of them being crushed because their owners want a new crossover.
      invisiblepigeon3
      • 5 Years Ago
      I LOVE how I have to click "reply" multiple times before it even has a remote chance in hell of working!!!!

      Then I have to click "Add Comment" TWICE before it'll do a ****ing thing!!!!!

      Fix the ****ING comment system already!!!!
        • 5 Years Ago
        @invisiblepigeon3
        What the hell would your poor browser performance have to do with Autoblog's comment system? Works fine for me. You probably got a virus in your Infernal Deplorer while looking at porn.
        • 5 Years Ago
        @invisiblepigeon3
        Okay, but being honest and straightforward here: If you're clicking the button and it does not respond, I seriously doubt it is autoblog causing that issue. Have you tried using an alternative browser?
        invisiblepigeon3
        • 5 Years Ago
        @invisiblepigeon3
        Based on how many repeat posts, disconnected replies, and how many people say something like "fix the comment system FFS!", I don't think it's my computer. My anti-virus and Windows are both fully up to date, and this is the only website that the problem occurrs on. Empirical evidence doesn't point to the problem being on my computer.
        invisiblepigeon3
        • 5 Years Ago
        @invisiblepigeon3
        case in point! that was a reply to daleam. FFS
      • 5 Years Ago
      Mofan,

      the numbers you are referring to exclude petroleum:

      "The petroleum deficit makes up more than 50% of the total U.S. trade deficit from November 2007 to October 2008 (with a peak of 64.5 % in July 2008), and again from February 2009 to October 2009, reaching 63.7% in June 2009. In November 2009, petroleum accounted for 54.6% of the total goods and services trade deficit."

      http://www.census.gov/foreign-trade/statistics/graphs/PetroleumImports.html

      The more cars go on the road in the new largest car market (China) and in the developing world, the more the price of oil will go up, and the more money we will ship out of our country.
        • 5 Years Ago
        I dont care about your numbers, we have HUGE trade deficit with Japan ( and we dont get any oil from Japan), exclude them, they exclude us
        • 4 Years Ago
        "I don't care about your number"

        It's so sad and yet so funny that I'm not sure if I should cry or laugh at this. On one hand Colbert was right about certain people ignoring facts and on the other hand it's true... Thank you for the good laugh ^___^.
        • 5 Years Ago
        Bah don't bother with facts they have no place here.

        "I don't care about your numbers(facts)"

        Wow that could be the RWNJ mantra.

      • 5 Years Ago
      I would be much more "for" something like this (even though it has no real effect) if we were not 12 TRILLION in the hole.

      Is there ever a plan to go back to saving money or paying off debt? or are we just going to run the money printing presses 24/7 with wreck less abandon from now on?
      • 5 Years Ago
      If there is a new program, I hope it is completely bespoke.
      • 5 Years Ago
      Dan,

      WSJ figured that every dollar of the C4C spent on incentives generated 6 times as much in total spending (car, insurance, crushing, taxes and fees, etc.). If you figure that ~28% of all spending in this country eventually ends up as taxes (mostly through the income taxes of people employed by that spending)... on the face of it, much of the $3 Billion spent ends up back as taxes...

      The question then becomes how much of that spending was incremental? How much will it stimulate future car sales due to reduced used car supply?....

      Regardless, it has been very successful in terms of stimulus.
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