Post Clunker Thoughts..

[JJ_BPK]

I've been reading the discussions about the clunker trade in program.
Today I finally read an article that spoke to the problems I see..

1)take 660,000 clunkers off the road
a)now what do people who can't afford new 30K USD cars buy??

2)Crush those 660,000 thousand cars??
a)who cleans up the 1/2 empty gas tanks??
b)who disposes of the Freon gas in the air conditioners??
c)who cleans up the toxic acid in the batteries??
d)who's city get the new Mount Clunkmore pile of now useless rusting
vehicles??

3)Get those 660,000 off the road BUT
a)what do the small family run used car dealers sell??
b)what happens to all the junk yards that sell used door, hoods, fenders to people that can't afford big-buck auto shop fixes??
c)what happens to the thousands of small auto parts stores and corner gas station mechanics??
d)what do we export to ultra-poor countries that need cheap transportation, like Haiti, Cuba, South America, Africa, California??

4)Move these people with the clunkers into new 30K USD car,, with 6% auto loans
a)who is going to bailout these people that can hardly maintain a clunker who now have a 500 USD monthly car payment???

5)That 6 billion USD you just gave to the auto makers,, for FREE...
a)who's pocket is it coming out?? Yours & Mine

It's great to have an good idea,,,
It's even better to have an idea that is useful to society
It's not good when you don't plan for the consequences...

Think about it Proles..
Jimmy

PS:
Yes, we do drive a Lexus RX300 SUV,, it's a 2002 model, 86,000 mile on it, and still gets 23 MPG,, we'll probably keep it for a while..
Our car before that was a 1991? 4runner, between us and the kids, it had 146,000 miles when sold..
My F250 pick-up had 70K miles when I purchased it for 3100 USD and 150K miles when it died in Hurricane Georges,, a good truck..
So,, Yes,, we drive clunkers...

Destroy assets that could have been converted to cash and distorting the economy.

Originally Posted by Mark Twain

It could probably be shown by facts and figures that there is no distinctly native American criminal class except Congress.

[Ret10Echo]

In case you were wondering:

By The Associated Press


(AP) - Auto dealers reported 690,114 sales under the federal government's $3 billion Cash for Clunkers rebate program, according to final data released Wednesday by the Department of Transportation. The total value of the rebates claimed by dealers totalled $2.88 billion.

The following is a list of the top-selling vehicles under the program, the most popular trade-ins, the share of sales for automakers and the top-selling states.

TOP SELLERS

1. Toyota Corolla

2. Honda Civic

3. Toyota Camry

4. Ford Focus front-wheel drive

5. Hyundai Elantra

6. Nissan Versa

7. Toyota Prius

8. Honda Accord

9. Honda Fit

10. Ford Escape front-wheel drive

TOP TRADE-INS

1. Ford Explorer four-wheel drive

2. Ford F-150 Pickup two-wheel drive

3. Jeep Grand Cherokee four-wheel drive

4. Ford Explorer two-wheel drive

5. Dodge Caravan/Grand Caravan two-wheel drive

6. Jeep Cherokee four-wheel drive

7. Chevrolet Blazer four-wheel drive

8. Chevrolet C1500 pickup two-wheel drive

9. Ford F-150 pickup four-wheel drive

10. Ford Windstar front-wheel drive van

TOP MANUFACTURERS OF NEW VEHICLES SOLD

1. Toyota, 19.4 percent of Cash for Clunkers sales

2. General Motors, 17.6 percent

3. Ford, 14.4 percent

4. Honda, 13 percent

5. Nissan, 8.7 percent

TOP STATES FOR SALES

1. California

2. Texas

3. New York

4. Florida

5. Illinois

[Pete S]

I don't like that the program was expanded past it's budget of $1 billion so quickly.
A pause so that a detailed report could be put out before a push for more money would have been better.

Many of the cars that I have seen turned in for this program were decent vehicles that didn't need to be destroyed.

Send them to a non-for-profit organization to help the poverty stricken get to work.
Give them to an Iraqi family instead of having the US government buy them a brand new car.
Take the titles, bundle them into lots, and auction them to junk yards.
Or keep the titles and set a base price of $5,000 for any vehicle and list them on an internet website.
Recoup some of those costs.

It was a good idea, but very poorly executed.

How long until the first lot defaults on their car loans?

[Gypsy]

Originally Posted by Pete S

I don't like that the program was expanded past it's budget of $1 billion so quickly.

IIRC the original allottment was $4M, but then was downgraded to $1M. After a few weeks they realized $1M wouldn't go far based on the success of the program so they were able to get an additional $2M funded.

[nmap]

Originally Posted by HowardCohodas

Destroy assets that could have been converted to cash and distorting the economy.

Exactly.

The consumer had an asset and owed nothing on that asset. After the deal, they had an asset that depreciates rapidly and a large debt. I strongly suspect that the net value of the car minus the debt, even after the stimulus check, is less than zero already.

The Federal Government added 3 billion in debt. But it will get back about $750 million in taxes...since those checks were fully taxable.

The car companies got some good sales this time. But this pulls demand forward - it robs future sales to improve sales today. What do the car companies do next month?

What happens to all those new car - not owners! - rather, call them new car debt slaves. Especially if the unemployment situation strikes them?

Curing the problems of excessive debt with more debt is like curing obesity with a triple cheeseburger and biggie fries.

[Ret10Echo]

I am waiting to see if there is some level of statistics on:

The amount of Tax revenue generated in states with sales tax....

The amount of revenue created in states for registration and title fees

The amount of tax revenue that will be LOST due to lower fuel consumption (higher mileage vehicles)

How much MORE the insurance industry is making on "Full Coverage" insurance (as opposed to an assumed liability-only status on a clunker)

How much the banking industry is making in interest on loans related to the clunker buy....

[Praetorian]

Originally Posted by Ret10Echo

TOP SELLERS

1. Toyota Corolla

2. Honda Civic

3. Toyota Camry

4. Ford Focus front-wheel drive

5. Hyundai Elantra

6. Nissan Versa

7. Toyota Prius

8. Honda Accord

9. Honda Fit

10. Ford Escape front-wheel drive

TOP TRADE-INS

1. Ford Explorer four-wheel drive

2. Ford F-150 Pickup two-wheel drive

3. Jeep Grand Cherokee four-wheel drive

4. Ford Explorer two-wheel drive

5. Dodge Caravan/Grand Caravan two-wheel drive

6. Jeep Cherokee four-wheel drive

7. Chevrolet Blazer four-wheel drive

8. Chevrolet C1500 pickup two-wheel drive

9. Ford F-150 pickup four-wheel drive

10. Ford Windstar front-wheel drive van

TOP MANUFACTURERS OF NEW VEHICLES SOLD

1. Toyota, 19.4 percent of Cash for Clunkers sales

2. General Motors, 17.6 percent

3. Ford, 14.4 percent

4. Honda, 13 percent

5. Nissan, 8.7 percent

Wow.... I see a lot of American cars (that would have presumably continued to be serviced to some degree by American dealerships and their parts suppliers) being replaced with a lot of Asia-based autos..... GM looks like they got a bit, but if American taxpayers had had a say in this I'm guessing the offer would have been limited to the troubled U.S. Manufacturers.... Not their competitors.

[Slantwire]

Originally Posted by Ret10Echo

TOP SELLERS

1. Toyota Corolla

2. Honda Civic

3. Toyota Camry

4. Ford Focus front-wheel drive

5. Hyundai Elantra

6. Nissan Versa

7. Toyota Prius

8. Honda Accord

9. Honda Fit

10. Ford Escape front-wheel drive


TOP MANUFACTURERS OF NEW VEHICLES SOLD

1. Toyota, 19.4 percent of Cash for Clunkers sales

2. General Motors, 17.6 percent

3. Ford, 14.4 percent

4. Honda, 13 percent

5. Nissan, 8.7 percent

The relative positions of Toyota, Ford, Honda and Nissan seem plausible enough to me. I don't get how GM came in second. Did they have every model placing 11-20?

[Vic]

Many of the turned-in vehicles, if not most, were trucks, that are by definition have low fuel economy. I wonder if people didn’t buy trucks having never planned on working with them, only to trade them in for the $4500 toward some sexy little car. I just put a grand into my 94 Chevy, because it is my life blood, and I have to hear about my government crushing a 2004 Dodge on NPR. It is very disheartening, to say the least.

[BMT (RIP)]

Anyone diagree with these figure's??

BMT

A vehicle at 15 mpg and 12,000 miles per year uses 800 gallons a year of gasoline.
A vehicle at 25 mpg and 12,000 miles per year uses 480 gallons a year. So, the average clunker transaction will reduce US gasoline consumption by 320 gallons per year.
They claim 700,000 vehicles – so that's 224 million gallons / year.
That equates to a bit over 5 million barrels of oil.
5 million barrels of oil is about ¼ of one day's US consumption.
And, 5 million barrels of oil costs about $350 million dollars at $75/bbl.
· So, we all contributed to spending $3 billion to save $350 million.

[JJ_BPK]

Originally Posted by BMT

So, we all contributed to spending $3 billion to save $350 million.

Ah,, but you forgot to add in the positive feedback from the auto unions at election time.. Should off-set double the amount in campaign contributions..

[Red Flag 1]

Originally Posted by JJ_BPK

Ah,, but you forgot to add in the positive feedback from the auto unions at election time.. Should off-set double the amount in campaign contributions..

"Zero" help!?????

We have again sent many bucks out the country. Not much help for our auto industry. My local Ford dealer, and close friend, has yet to see a dime of promised money. I expect participating dealers are having trouble meeting payrolls. Looks to me as yet another card played to control more of the auto industry, at the expense of the US companies.

As things are playing out, I have to ask how much funding for Zero comes from off shore intrests? We may find ourselves in a position to be unable to compete with forigen intrests funding our political process. I think Zero is doing a fine job for Zero !

My $.02.

RF 1

[Richard]

As with everything - there are always those complicated unintended consequences...

And so it goes...

Richard's $.02

Crash For Clunkers: Demolition Derbies Hard Up for Cars
Ada Calhoun, Time, 3 Sep 2009

There's at least one group of people who are happy Cash for Clunkers is over: demolition-derby drivers. Participants in these events, in which drivers smash into one another until there's only one engine left running, don't enjoy the sight of old cars going out of commission without making a pit stop at the county fairground. "Obama is an anti-demo-derby guy," says Tory Schutte, head of the Demolition Derby Drivers Association. "He's targeting the cars we've been using."

Also contributing to the shortage of derby-worthy cars: scrap-metal prices have doubled in the past two years, leading more owners to sell their cars to the junkyard instead of to a local kid with demo-derby dreams.

Eric Coss, a teenager in New York's Delaware County, managed to buy his first derby car, a little four-cylinder he decorated with markers, this summer for $150, plus $6 for parts. His reason for entering the county's Aug. 21 event was simple: "You can smash your car without getting in trouble."

Since the 1950s, demolition derbies have offered cheap catharsis that embodies America's can-do spirit. A crumpled car sputtering along in the mud on its rims can bring a crowd of thousands to their feet.

There are an estimated 3,500 derbies in the U.S. each year, and they tend to be the main attraction at county fairs, where attendance has hit record highs in many places this summer. "It's been a stellar year for fairs across the country," confirms Marla Calico, spokesperson for the International Association of Fairs & Expositions.

A lot of preparation goes into crashing these clunkers. Cars must be stripped of all extraneous parts, including windows; any reinforcements other than roll bars and contestants will get disqualified. Gas tanks must be moved to the backseat and covered with scrap metal. Doors must be welded or chained shut.

Drivers, who are not allowed to ram driver's-side doors, have to wear helmets. Many accessorize with neck braces.

There's a lot of pageantry on display at derbies, too. Veteran demolition driver Lynn Buchanan paid $600 for his mid-'70s Chevy wagon, which he decorated with an American-flag motif for the Delaware County derby. He puts a lot of hours into fixing up the clunkers he's getting ready to crash and sees the derby as a healthy way to blow off steam in stressful times. "I tell my wife, at least I'm not at the bar or doing drugs," he says. "You know where I am — in the garage turning a wrench."

But the derby ultimately rewards fearlessness. Andrew Dougherty paid $100 for his Oldsmobile Delta 88, which got double-teamed by two Chevy Imperials in the Delaware County finals. Yet he never gave up — even after his trunk was flattened into the backseat — and was awarded the coveted Best in Show trophy and $300. Later, in the parking lot, he leaned against what was left of the car and crowed, "It still starts!" He cranked it. Nothing. "Well, it did!"

http://www.time.com/time/nation/arti...919833,00.html

[Axe]

I just did a quick look to confirm the math I had done in my head when they announced the program:

A 2009 Toyota Corolla, basic trim, manual transmission lists at $16,300 in my area.

The same 2008 model with 10 miles on it has a Kelly Blue Book private party value of $11,900.

$16,300-$11,900 = $4400.00

The first year of depreciation on that new car pretty much eats the whole rebate. The second year of depreciation makes sure the rebate is wiped out and then some. Meanwhile, people's payments go on...

I never saw where this was a good deal for anyone but the auto companies.