bobb1951 - Have you figured out the answer to your question from 11/6 post??

Hannah, thanks for responding but your situation is very different than the regular person. An approx. 40% discount is not available to anyone outside the auto industry.Even with the discount it's still a bad investment. Luck has absolutely nothing to do with my(or anyone else's) ability to buy an auto for cash. By not doing stupid things with my money allows me to do that and more. I'm not criticizing you but you are not taking ALL costs into the equation. To all others who's vanity has driven(ha,ha) them to purchase a new car: "There is no necessary relationship between the level of posession and the level of well being". Bill Mckibben:Deep Economy

There is absolutely, positively, 100%, nothing that is even close as bad as an investment for your money than buying a new car. If people were to actually sit down with a calculator and figure out what they REALLY cost, I think sales would fall off the chart. But vanity in America is a very powerful force! P.S. I haven't had a car payment since 1977.

I believe these are "Category 1 trucks" which means that the $3500 credit only applies for gas mileage differences between the trade-in and new vehicle of 2-5 mpg. (For Category 1 cars, it's 4-10 mpg.)
http://www.cars.gov/faq

As an exboyfriend used to tell me when my car broke down, "SwissChickie, it's just a machine. It's only as strong as it's weakest link".

Hanna: I do realize that just because a car looks good doesn't mean it will pass a safty inspection, but I know for a fact that many cars that would pass a safty inspection were crushed for cash for clunkers. I have been around the automotive business in one way or another for my entire life.
As for people thinking that they will never have problems with a used car, how many people think that they will never have a new car break down? It all comes down to if it is mechanical sooner or later it will break down.
And yes I do agree that the fedalis extended warranty is a big ripoff.

Hanna: That may have been the case at the dealership that you are at, but at many of the large dealerships that I saw there were many vehicles that would have passed safty inspections.

The purpose of C4C was to stimulate the economy, nothing else. The government was smart to include a fuel efficiency component, however small. It wouldn't have been environmentally wise to provide incentives for people to trade in their clunker neon for a new SUV, for example.

Ezoner wrote:
"1. CFC destroyed residual value in the autos/trucks"

Not any more than the huge incentives already being offered by the manufacturers. GM and Chrsyler have been destroying their residual value for years with huge rebates. In many instances, the manufacturer rebates plus your trade-in value would have been MORE than the $4,500 C4C rebate.

"2. The Gov money will be considered income and taxes."

A widely spread idea that is mostly false. The cash-for-clunkers measure, known as the Consumer Assistance to Recycle and Save Act of 2009, exempts consumers who take advantage of the program from paying (Federal) taxes on the rebate. But it does not exempt car dealers.
http://www.autonews.com/article/20090803...

Each state is handling state sales differently. For purposes of Wisconsin's sales and use tax laws, the amount of the electronic voucher applied by the car dealer under the "CARS" program as a partial payment or down payment towards a person's purchase of a new fuel efficient vehicle is NOT subject to Wisconsin sales or use tax.
http://www.dor.state.wi.us/taxpro/news/0...

Because the CARS payment is NOT included in federal taxable income, it will NOT be included in state taxable income unless the state legislature enacts a provision requiring an add-back adjustment. No state has done that so far.

"3. Dealers, manufactures had less of a reason to negotiate on price - they new a demand was coming."

They had no idea it would be so popular, or they would have ramped up production ahead of time. Ask an actual dealer or salesperson.

"4. Increased warrranty risk for manufacturers"

What? Selling MORE cars increases warranty risk? That make no sense. Warranty cost is built into the price of every vehicle, or no manufacturer would ever make a profit. By your logic, manufacturers would want to sell as few vehicles as possible. Wow.

"5. Lower repair and aftermarket demand for parts and services -- higher margin business."

This was a one-for-one trade. Yes, newer vehicles get repaired less than old vehicles, but the economic activity of pulling forward thousands of sales is huge compared to fewer repairs done to cars almost ready for the scrap pile.

"6. Gov money interest to taxpayers"

You mean interest on national debt? Well, that's a cost of any stimulus. I won't argue economic policy in this post.

"7. Higher payment or increased personal debt carried, may take some out of the home market."

You seriously think a significant number of people saving to buy a home purchased a car instead? There is no evidence to suggest that. As someone else pointed out, most of the transactions were paid with cash.

"8. Some states have personal property tax laws that include property taxes on vehicles (New cars would mean higher tax revenues and higher taxes)."

What states will tax the CARS rebate? See #2 above.

One big problem I had with the program is that there was alot of perfectly good vehicles with many more miles of use left on them that were destroyed. Instead of flooding the scrap steel market and driving down the price to next to nothing, why couldn't they sell the good vehicles that would of passed a safty inspection to low income families at a reduced rate? This would of removed alot of even older and unsafe vehicles off of the road as well as helping out the lower income families that are struggling trying to keep their old cars running.

I never once referred to those people as "rich". I agreed that most of the people purchasing those vehicles were probably more well off than people like me.

You claim it wasn't a "rich" persons plan, but then further claim that most of those people "paid cash". You just made my point.

Bun Bun is correct and I will elaborate.

1. CFC destroyed residual value in the autos/trucks
2. The Gov money will be considered income and taxes.
3. Dealers, manufactures had less of a reason to negotiate on price - they new a demand was coming.
4. Increased warrranty risk for manufacturers
5. Lower repair and aftermarket demand for parts and services -- higher margin business.
6. Gov money interest to taxpayers
7. Higher payment or increased personal debt carried, may take some out of the home market.
8. Some states have personal property tax laws that include property taxes on vehicles (New cars would mean higher tax revenues and higher taxes).

I cannot believe that anyone fell for this nor believes this program was a positive.

A better idea is a tax break for middle class, putting more money in their pockets.

hannah - Apparently, you have all the answers. I haven't had a raise in 3 years. With the economy like it is, I didn't want to compromise my future earnings with an added payment in case I lost my job. I work for a construction company and, in case you haven't noticed, there isn't a whole lot of building going on right now. Got it?

One point that was probably missed, it the program was for clunker trades to get more gas milage. Isn't 1-3 mpg "more". Also, any new vehicle complies with Gen IV technology and not only gets better gas milage, but better tailpipe emissions. I am NOT for these government programs, but here is one that worked, was easily tracked, and they shut it down. Half way into the $730B bank bailout, the GAO asked banks to provide details of where the money went, and nobody knew. Nobody can provide details that the bank bailout worked. It seems to be the opposite with this program. Keep in mind, that only 10% (national average) of people are unemployed, that means 90% (of eligible) are working. It is that 90% that is going to turn this economy around.

As for the program benefitting the rich I have 2 problems with that idea. 1. The rich probably do not have old "clunkers". If they do have a gas guzzler it is because they want that size. 2. Rich people do not need to trade. They can buy. I think the program was meant to help low/middle income people. Those are the people who drive their cars until they die. Unfortunately, a new car payment is out of reach for the low income and even some middle income people. Try as you may, no program for whatever situation will help more than 50-60% of the people intended. There will always be others who were not intended to get help but are able to capitalize. That is human nature and the American way.

I've never been to college or taking economics but it seems to me 3 billion dollars to keep people working is a better investment than 3 billion to extend unemployment benefits. But I do know that standing around with your thumb in your backside gives you nothing but a sore back!

I've always had a problem with Cash4Clunkers. To me it seems to go against simple supply and demand economics. How can we push all of these new cars into a market already saturated with used and repossessed vehicles (see www.repofinder.com)? Now new cars are worth even less, we have more Amerians in debt, and eventually more repossessions.

Another program the government could not make work.

enutpenfry - I definitely agree with the first line of your post. I would've like to have a newer vehicle, but I simply couldn't have afforded 4 years (or more) of payments on new vehicles. If you're well off, you benefitted from this program. I would've like to see something that would get me out of my 14 year old car and into a newer used vehicle.

The Cash for Clunkers program may have been promoted as a way to help the environment, but it turned out to be a tax break for the "rich" (defined as those who could afford a new car). To add insult to injury, the Cash for Clunkers program has driven up the price of used cars, making it harder for the "poor" to get a replacement vehicle. According to several news reports, the Cash for Clunkers program resulted in the destruction of many perfectly good vehicles that got decent gas mileage.

http://content.usatoday.com/communities/...

Ultimately, I think this was truly intended to be a kick-back to the auto unions from the Democrats, but people instead mostly purchased Toyotas and Hondas, thereby pouring more salt into a wound.

Well 1-3 mpg is better but I also think they were trying to get people to buy new cars and trucks to help get the economy moving. The trade ins are also off the road for good not in a used car lot. Has the program been perfect? No but it was one of the better ideas I have seen.

it doesnt make sense. but they had to set some kind of parameters. and the truck for truck fell into the parameters they set. not a perfect program but it did waaaay more for the auto industry than the billions they gave gm to only delay bankruptcy...

just wait till the suckers that bought under this program get hit on thier taxes for the "income" gained for the cash for clunkers--ha, ha!