Cash For Clunkers Insanity

I don't get that either. I guess we need trucks and SUVs, at least some people do. So it's good to get better gas mileage if you have to drive them. It seems like there should be a push to motivate people to get vehicles with better mileage, like giving more of a rebate when they buy cars with better mileage.

Do you know the full details of the Cash for Clunkers program -- what quelifies? Is there a web site that explains it? I'm a little fuzzy about the details.

Is there a web site that explains it?

Regarding the above quote from Joe Bpsplk's comment #2.4:

Below is a link to the official govenment website, which tells about the program, eligibility requirements, etc.

http://www.cars.gov/

Thanks. Here are some facts I took off that site about how the program works. I see there is a distinction between category 1 and category 2 trucks. And they are treated differently than cars.

What is the value of the credit for the purchase or lease of a new van, pickup truck or SUV?

The value of the credit given for the purchase or lease of a category 1 or 2 truck also generally depends on the difference between the combined fuel economy of the vehicle that is traded in and that of the new vehicle that is purchased or leased. If the new vehicle is a category 1 truck that has a combined fuel economy value that is at least 2, but less than 5, miles per gallon higher than the traded-in vehicle, the credit is $3,500. If the new category 1 truck has a combined fuel economy value that is at least 5 miles per gallon higher than the traded-in vehicle, the credit is $4,500.

If both the new vehicle and the traded-in vehicle are category 2 trucks and the combined fuel economy value of the new vehicle is at least 1, but less than 2, miles per gallon higher than the combined fuel economy value of the traded in vehicle, the credit is $3,500. If both the new vehicle and the traded-in vehicle are category 2 trucks and the combined fuel economy of the new vehicle is at least 2 miles per gallon higher than that of the traded-in vehicle, the credit is $4,500. A $3,500 credit applies to the purchase or lease of a category 2 truck if the trade-in vehicle is a category 3 (work) truck that was manufactured not later than model year 2001, but not earlier than 25 years before the date of the trade in.

In earlier discussion, I was surprised at how little improvement was required to qualify for this program. Then I discovered that the 1 MPG increase was only for category 2 trucks (work trucks). The discussion didn't deal with the majority of purchases, which are automobiles.

Here is the data for cars. It looks like the required increase in mileage for cars is much higher than for trucks, which makes sense.

What is the value of the credit for the purchase or lease of a new passenger car?

The value of the credit for the purchase or lease of a new passenger car depends upon the difference between the combined fuel economy of the vehicle that is traded in and that of the new vehicle that is purchased or leased. If the new vehicle has a combined fuel economy that is at least 4, but less than 10, miles per gallon higher than the traded-in vehicle, the credit is $3,500. If the new vehicle has a combined fuel economy value that is at least 10 miles per gallon higher than the traded-in vehicle, the credit is $4,500.

Ah, that's better. I read in the paper that Ford is producing the Focus and Escape as fast as they can to sell to people as part of the Cash for Clunkers program. Apparently a large number of people are trading in those SUVs and buying cars with much better mileage. So besides giving the auto companies the boost they need right now, one good thing is happening -- this will save a LOT of gasoline, reducing our dependence on foreign oil imports. I remember a friend of mine who owned a Ford Expedition complaining every time he filled the tank in the thing. He wanted to sell it a few years ago but hung onto it because the thing was so expensive he would have taken a beating selling it. Maybe he finally traded it in.

If you trade in a vehicle, to get $4,500 rebate you have to buy a car that gets more than 10 MPG better than the one you traded in. It would be pretty easy to make that jump if you trade in an old SUV.

I have a couple of older Saturns that get 38 MPG. I would have to buy a car that gets better than 48 MPG to get a rebate! But then, the Saturns have been so reliable that by the time I do need to get a new car, I'll probably be looking at battery / gas hybrids or even 100% battery powered cars.

Forgive me Kathy if I think you might be going a bit overboard against the Cash for Clunkers program. The purpose of the plan is to get cars with better mileage on the road and to keep the U.S. car companies the help that they need.

One can always find spin words to denigrate any project, especially if you have an agenda to support a particular political party and attack the other regardless of the issue. Perhaps that played a part in the statement about "punishing" people who already drive fuel efficient cars? However, the point of the program is to address the problems, not appease everyone who drives a car. Besides, my Saturns have been so cheap to buy, drive and fuel, who is complaining? I don't need another reward!

Ok, it just seemed like you were focusing on the oddball parts of the program, like category 2 trucks, and ignoring the big picture. In USA Today a couple of days ago, I read that Ford was moving out all of the Focuses and Escapes they could make. So it seems like the pogram is working on both goals -- moving fuel efficient cars onto the road and boosting car manufacturers. But wait, there's more!

I think one of the things we haven't mentioned is what I think is the THIRD goal of the program -- the fact that this is buying time for the car manufacturers. They need to survive one or two years until they get the new hybrids and battery operated vehicles out onto the lots. Long-term survival will be all about these new types of vehicles. Once they hit the roads, the game will change, demand will ramp up for an exciting new breed of cars, and the car manufacturers will have beaten this crisis. Then we'll thank Obama and the Cash for Clunkers program. He made a bold choice and it worked -- American auto manufacturers dodged a bullet. American car suppliers are still in business, these people aren't getting unemployment checks, the economy gets a boost.

How about if we introduce Kathy Gill's new "Cash for Junkers" program? Old Saturns and Mazdas qualify!!!

Thanks for the discussion. We'll see how the auto companies do in the next few years. The new battery-operated vehicles should be interesting. I'm hoping that the new batteries get sufficient miles, don't cost too much and don't explode too often.

I wish that there had been incentives to push the new engine technologies many years ago. The "lower taxes" mantra kept the money in our pockets and out of the reach of scientists and engineers who could have used it to produce new battery, hydrogen or fuel pump engines. So instead, we waited until a crisis occurred and then spent the money to bail out the car companies and give them a little more life. Boy, was that ever short-sighted! We have to start looking at what is best overall and for the long term from now on.

I take it you have never taken a macro economics class or even played Sim City before, have you?

Our national debt is $11,670,587,920,251.78

Adding to this is insanity.

Economic theory be damned.

George Bush is responsible for half that debt - 5 trillion dollars! I find it pretty disgusting that conservative Republicans said nothing about that debt and did nothing to stop Bush during the entire 8 years he racked up debt in order to destroy Iraq. Now they are using Bush's national debt total in attacks against the need to borrow money to fix the problems caused by Bush -- the economic crisis and the automobile company bankruptcies.

Obama certainly would rather spend the money on moving forward. But he's got to repair the damage of the Bush administration before doing that. We know that we would be in deep recesion or another Great Depression had Obama not acted. Why fault him for doing the right thing for America?

If increasing the federal debt will do away with debt, then throwing virgins into a volcano will increase GDP and end the recession.

Better not throw in any Alaskan "virgins" who opted for abstinence. They may be a bit over-ripe!

If you believe that article, a 3 Billion infusion ended the recession and turned our economy around.

The $180 billion to AIG and the Billions to Goldman Sachs didn't really help much, but cash for clunkers saved the economy.

Bull hockey. You wait till the inflation hits next year, then tell me all about it.

And interesting take on how buying new and scrapping old impacts other business.

The Dark Side of 'Cash For Clunkers'