“Cash for Clunkers”. Use that phrase in front of a car hobbyist, and you’re almost sure to ignite a hell of a conversation. This whole deal, run by the government, just recently started here in America, but follows closely on the heals of similar programs that have sprung up in Europe. The fear for guys that are really into rebuilding old Chevys or think it’s total fun to restore a 1975 Mustang looked at the program with dread and revulsion. They were worried that people who didn’t know any better would be trading in Rocket 88s et al, and cars that used to be fun and easy to find would be gone forever. Turns out, the system doesn’t exactly work that way.
For starters, it’s not literal cash money for your car, it’s a voucher from Uncle Sam to go buy a NEW car down at the dealership.
Now, think about that for just a second. The government will give you XX-thousands of dollars in voucher form that you can only spend at anew car dealer. For all the spin of this being a green initiative, which it IS, and there ARE environmental benefits, what you’ll notice is that this is a way to get people to buy new cars, and thereby, prop up the ailing car industry.
When similar initiatives were started in various EU countries over the past few months, various Euro governments literally said that much. To them, and to me, they are killing two birds with one stone: You get to prop up an ailing industrial segment AND you get more fuel efficient and modern cars on the road.
It’s a twofer, and a good one.
Now, on to how this will not be taking 55-56-57 Bel Airs et al off of the roads.
The deal is set up in such a way that cars have to fall within certain parameters, most notably cars of a given time period (so stuff like 1928 Dubonnets are excluded) and of certain bad MPG figures.
So you can’t take in your Gen 1 Prius, get $4500 in a cash for clunkers voucher and go buy a new Gen 3 Prius. But you COULD take in your 1984 malaise-era Detroit lead sled that’s lucky to get 12 miles to the gallon and get a hefty voucher for that.
So, now that it’s been up and rolling for a bit, how all this Cash for clunkers working? Quite well, if you ask the folks at Kelly Blue Book.
They’ve noted that there’s an “Overwhelming consumer response … ” to the point where the money may run out before the program reaches its November 1st cut off date. And there’s also some confusion as to which cars are eligible.
“Massive paperwork backlogs on what could be in excess of 200,000 total sales are further complicating efforts to determine just how much, if any, funding actually remains,” say the folks at Kelly.
We say great. Sure, it’s our enlightened self-interest, but if it gets people off the roads in older, probably less well maintained rides, and into newer, more fuel-efficient rides, then we’re all for it. The more people that are out there with cars that actually have working brakes and track straight, the safer it will be. And the more fuel-efficient cars there are the better.
Check out the Cash for Clunkers Calculator at Edmunds.com to see if you can get a rebate.
Here’s the press release from KBB:
Cash for Clunkers Status Update
As of Friday morning it appears Cash for Clunkers is still on, subject to individual dealers\’ discretion.
Overwhelming consumer response to the government\’s highly-publicized Cash for Clunkers program has created some serious questions about its future financial viability. As of early Friday, those questions remained largely unanswered. Officially known as the CARS (Car Allowance Rebate System) Act, it kicked off last Friday and was set to formally expire on November 1, although its de facto end had always been tied to whenever its nearly $1 billion in allocated funding ran out. Thursday afternoon, NHTSA (National Highway Transportation Safety Administration), which oversees the CARS Act, told members of congress that it planned to suspend operations at midnight based on transaction information received from the National Automobile Dealers Association (NADA). A NADA poll indicated that virtually all of the money allocated to cover reimbursement of the $3,500-$4,500 in CARS credits its dealers have been providing to consumers who traded in their eligible gas guzzlers on new, more fuel-efficient vehicles may have already been appropriated. Massive paperwork backlogs on what could be in excess of 200,000 total sales are further complicating efforts to determine just how much, if any, funding actually remains. Shortly thereafter, a White House spokesperson put a slightly different spin on things stating that the phenomenally successful Cash for Clunkers program was not being \”suspended,\” but merely being placed under \”review\” to allow congress and the White House to assess new options regarding how CARS could be extended and recapitalized.
Attempting to quell rising fears about the uncertainties of this situation, a White House statement on Thursday night reaffirmed that: \”Dealers and consumers should have confidence that all valid CARS transactions that have taken place to date will be honored.\” Unfortunately, it neglected to say anything about the status of any subsequent deals, which should make for some rather interesting dealer/customer interactions this weekend – or until a definitive resolution takes place. Among the possibilities already being discussed is allocating additional monies from the remaining TARP (Trouble Asset Relief Program) funds or even creating a new CARS II package that would come with even more total money but also carry more stringent mileage requirements.
Be sure to check with KBB.com a regular basis for the latest updates on where things stand with the Cash for Clunkers program.
Photo from Flickr user youngthousands