Cash for clunkers bill passed

Johnnyboy · #1 (**permalink**) 06-09-2009, 08:29 PM

It seems congress has passed the 'Cash for clunkers' bill. Here is The Associated Press article on it:

Quote:

WASHINGTON (AP) — The House on Tuesday approved a "cash for clunkers" bill that aims to boost new auto sales by allowing consumers to turn in their gas-guzzling cars and trucks for vouchers worth up to $4,500 toward more fuel-efficient vehicles.

President Barack Obama has encouraged Congress to approve consumer incentives for new car purchases as part of the government's work to restructure General Motors and Chrysler. The House approved the bill 298-119.

Supporters pushed for the measure to stimulate car sales and increase the fleet of fuel-efficient vehicles on the nation's highways. The auto industry has sought the incentives after months of poor auto sales. In May, overall sales were 34 percent lower than a year ago.

"Stimulating sales is the only way to get the auto industry back on its feet," said Rep. Donald Manzullo, R-Ill.

General Motors Corp. and Chrysler LLC have received billions of dollars in government aid and the entire auto industry has watched car sales plummet during the past year. In May, overall sales were 34 percent lower than a year ago.

"Our industry has been stuck in neutral and really has not started to move," said Larry Kull, president of Marlton, N.J.-based Burns Kull Automotive Group, which includes General Motors, Honda and Toyota dealerships.

The vehicle scrappage bill has been under negotiations for months as lawmakers try to find a solution that boosts car sales while providing some environmental benefits. Proponents have pointed to similar programs in Europe that have enhanced auto sales.

Opponents said the bill failed to include incentives for used vehicles and represented an artificial incentive for the industry.

"It's defying the laws of economics and saying we can manufacture enough of a demand to keep the auto industry afloat," said Rep. Jeff Flake, R-Ariz.

Separately, House and Senate appropriators were discussing providing $1 billion to a supplemental war funding bill for the "cash for clunkers" program, which aims to generate about 1 million new auto sales. Since the yearlong vehicle program is expected to cost $4 billion, lawmakers would attempt to find the additional money later this year.

Under the House bill, car owners could get a voucher worth $3,500 if they traded in a vehicle getting 18 miles per gallon or less for one getting at least 22 miles per gallon. The value of the voucher would grow to $4,500 if the mileage of the new car is 10 mpg higher than the old vehicle. The miles per gallon figures are listed on the window sticker.

Owners of sport utility vehicles, pickup trucks or minivans that get 18 mpg or less could receive a voucher for $3,500 if their new truck or SUV is at least 2 mpg higher than their old vehicle. The voucher would increase to $4,500 if the mileage of the new truck or SUV is at least 5 mpg higher than the older vehicle. Consumers could also receive vouchers for leased vehicles.

Rep. Betty Sutton, D-Ohio, the bill's chief sponsor, said the bill showed that "the multiple goals of helping consumers purchase more fuel efficient vehicles, improving our environment and boosting auto sales can be achieved." Sen. Debbie Stabenow, D-Mich., has backed a similar version in the Senate, which has the support of automakers and their unions.

The bill would direct dealers to ensure that the older vehicles are crushed or shredded to get the clunkers off the road. It was intended to help replace older vehicles — built in model year 1984 or later — and would not make financial sense for consumers owning an older car with a trade-in value greater than $3,500 or $4,500.

The U.S. industry is expected to generate about 9.5 million vehicles sales in 2009, compared to more than 13 million in 2008 and more than 16 million in 2007.

Auto analysts questioned whether it would be enough of an incentive for many consumers burdened by debt or financially stressed by the troubled economy.

"That is the major sticking point for Americans: How do you finance your vehicle? How do you pay for it?" said Rebecca Lindland, an auto industry analyst for the consulting firm IHS Global Insight.

A group of senators led by California Democrat Dianne Feinstein were pushing an alternative version that would require consumers to trade up for more fuel-efficient cars and trucks to qualify. They complained that even a 2009 Hummer H3T, which gets 14 mpg in city driving and 18 mpg on the highway, could qualify for the incentives under the House bill.

Under Feinstein's plan, a passenger car owner's trade-in would need to get 17 mpg or less to qualify and only new passenger cars getting at least 24 mpg would be eligible. Owners could receive a $2,500 voucher for a new car that gets at least 7 mpg more than their old car. The voucher would increase to $3,500 for new cars with a 10 mpg improvement and $4,500 for new cars with a 13 mpg increase in fuel efficiency.

Copyright © 2009 The Associated Press. All rights reserved.

Some auto enthusiasts are afraid that this could cause many classic cars and future classics to be destroyed.
It could also raise low end used car prices due to much higher demand. If someone is in the market for a new car, but doesn't have a clunker to get the voucher... the obvious thing to do is to go buy a cheap car off of a junk lot for a few hundred, so that they can get the voucher and save several grand.

What are your guys thoughts?

cyberwaste · #2 (**permalink**) 06-09-2009, 08:46 PM

i love lower end cars

and this pisses me off

apolloGT · #3 (**permalink**) 06-09-2009, 08:59 PM

I agree with "some auto enthusiasts"

This is just stupid. Automotive legislation these past months has earned a solid F.

mesarius · #4 (**permalink**) 06-09-2009, 09:31 PM

Ok, so if I were to buy a $500 piece of crap car, like an old gas guzzler like a Chrysler New Yorker which gets around 15mpg, then trade that in for a Chevy Camaro LT2, which gets a combined mpg of 23, that would give me a $3500 credit, which is $3000 free overall. Trade in the Monte Carlo which has a trade in value somewhere around $7000 and I nearly cut the price of the camaro in half

FBody_Lover · #5 (**permalink**) 06-09-2009, 09:59 PM

Quote:

Originally Posted by mesarius

Ok, so if I were to buy a $500 piece of crap car, like an old gas guzzler like a Chrysler New Yorker which gets around 15mpg, then trade that in for a Chevy Camaro LT2, which gets a combined mpg of 23, that would give me a $3500 credit, which is $3000 free overall. Trade in the Monte Carlo which has a trade in value somewhere around $7000 and I nearly cut the price of the camaro in half

You sly bastard

kendallcschm · #6 (**permalink**) 06-10-2009, 03:40 PM

**** them.. excuse my language but **** them... im gonna have my V8 and waste gas and have a damn good time doing it!

sccavette · #7 (**permalink**) 06-10-2009, 05:54 PM

This bill is nothing to worrry about! Few cars will even make the requirements to get the rebate!

1. The car has to have a combined fuel mileage of less than 18MPG. There are very few vehicles that fit into this and the majority that do (old muscle cars) will not be traded in for a new vehicle. I will give you a example! My old 89 S10 beater that I paid 100 bucks for shows a combined MPG of 18 and would not qualify.

2. You have to have owned and insured the car for the last year to be able to trade it in.

3. To get $3500 rebate you have to buy a car that gets 4 MPG better than the one you are trading in. To get the full $4500 the vehicle you buy must get 10MPG more than the one you trade in.

4. Most HD trucks and older SUV's can fit into the plan however most of these vehicles are worth more on the private market than the $4500 for the rebate, keep in mind the dealers will not give you market value for the truck or SUV because they are unable to sell it and recoop any money. People would be fools to trade a "decent" vehicle when they could sell it on the market and make more than the $4500.

Webstad · #8 (**permalink**) 06-11-2009, 12:18 PM

Quote:

Originally Posted by sccavette

4. Most HD trucks and older SUV's can fit into the plan however most of these vehicles are worth more on the private market than the $4500 for the rebate, keep in mind the dealers will not give you market value for the truck or SUV because they are unable to sell it and recoop any money. People would be fools to trade a "decent" vehicle when they could sell it on the market and make more than the $4500.

Keep in mind that you get the $4500 PLUS the trade-in value of the vehicle (the 4500 from the gov't and the trade-in value of your old car from the dealership). Using mesarius's example, he'd get a total of around $10,000 towards a new vehicle. You can get a reasonable number of new eco-friendly cars for almost $10k. Also, the bill only applies to vehicles made in 1984 and newer, so musclecars and other classics are out anyways. And, you'd be surprised at just how economical some classic cars are.

MY69GOAT · #9 (**permalink**) 06-11-2009, 04:44 PM

You know, I can't help but think that this all could have been done very differently. If, instead of spending hundreds of billions for company bailouts, they had divided that money equally amongst American households, each household would have received in excess of $150,000. Call me crazy, but I believe many Americans would not be so quick to sit on a bank account with that many zero's. Not only would most bills be paid off (to include many mortgages), but many would have enough left over to pay cash for a brand new vehicle. That's enough cash to keep the welfare class from building lavish new homes but more than enough for them to spend frivolously and "BOOM!" there goes the economic struggle we are all putting up with. Of course, something like that would never happen because the government would not be in the position of owning the entire corporate sector. Can anyone say "Communism". Watching our government work is like watching a horrific accident in slow motion. You can see it coming and there is NOTHING you can do about it.

sccavette · #10 (**permalink**) 06-11-2009, 07:59 PM

Quote:

Originally Posted by Webstad

Keep in mind that you get the $4500 PLUS the trade-in value of the vehicle (the 4500 from the gov't and the trade-in value of your old car from the dealership). Using mesarius's example, he'd get a total of around $10,000 towards a new vehicle. You can get a reasonable number of new eco-friendly cars for almost $10k. Also, the bill only applies to vehicles made in 1984 and newer, so musclecars and other classics are out anyways. And, you'd be surprised at just how economical some classic cars are.

You will not get over the 4500 for your trade! They are going to scrap the car so it has 0 value to the dealer. If they were to give u trade in PLUS the 4500 where are they going to offset the loss?

Johnnyboy · #11 (**permalink**) 06-12-2009, 12:32 PM

I think he was talking about trading in 2 cars. 1 clunker, which the dealer would be reimbursed by the government, and then trade in his Monte Carlo as a regular trade.

sniperofbuffalo · #12 (**permalink**) 07-06-2009, 06:57 PM

I should purposely **** up my car to get less MPG and get that voucher and get me a decent car like maybe a Subaru WRX or Nissan 350Z

Johnnyboy · #13 (**permalink**) 07-06-2009, 10:01 PM

The MPG requirements are based on the official EPA ratings.

sniperofbuffalo · #14 (**permalink**) 07-07-2009, 01:00 AM

dam...

MY69GOAT · #15 (**permalink**) 07-18-2009, 01:09 AM

The Classic Car Senate passed legislation today that would reward Americans with up to $5,000 in tax incentives to scrap old, inefficient senators and representatives.

“We need new senators,” said Classic Car majority leader Pontiac GTO, “Old senators are polluting our air and using up our resources at an astounding rate. Let’s get some new, young senators inside the beltway who spout out less hot air and don’t consume as many cheeseburgers.”

The move was backed by an overwhelming majority of classic automobiles.

“It’s about time this legislation passed,” said Oldsmobile 442, “I’m excited about the influx of recycled material that will become available when these old senators are crushed and melted down. Now that’s what I call ‘going green.’”

The new legislation, HR-101.4, provides Americans who scrap older model senators with up $5,000 in tax rebates on the election of a new, smaller, more efficient senator.

“These old senators have ruled Washington so long that people don’t know what’s good for them anymore,” said Chevrolet Chevelle SuperSport, Classic Car senator from Michigan, “It’ll do my heart good to see these guys rounded up, cut to pieces and possibly shipped overseas to countries in need of their raw materials.”

Other American automobiles opposed the bill, unwilling to let go of their old lawmakers.

“I just like things the way he had them,” said Toyota Corolla of West Palm Beach, Florida, “My old Senator knows how to raise some taxes can stall a bill in congress for eight years. You can’t get that out of a new senator.”

Others questioned why a congress of classic muscle cars was pushing to scrap older people.

“I tried to ask Senator Plymouth Superbird why he was so interested in scrapping old senators,” said Toyota Prius, “But I couldn’t catch up to him. I’m not anywhere near as fast off the line and my top speed doesn’t even come close.”

Classic Car Senators did confirm speculation that the bill was crafted in response to Representative Henry Waxman and his scrappage legislation.

“Want to get us old clunkers off the road, huh Waxman?” said Buick GSX, “Before you can make us into tin cans, we’ll have you guys pureed into Soylent Green.”

“One more important message to our old senators,” added Representative Mercury Cyclone, “We are prettier, louder, and faster. Don’t mess with us.”