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2010 Toyota Camry, one of the top five selling vehicles under the "Cash for Clunkers" program.
Extra money is expected to keep the program operating until Labor Day

Automakers have arguably been the hardest hit in the global economic recession. While computer makers had a hard time making profits, some of the largest vehicle manufacturers like GM were very nearly forced out of business by the lack of sales.

To help spur the automotive industry with sales and simultaneously remove some of the least fuel efficient and most polluting vehicles form the road, the Cash for Clunkers program was started with $1 billion in funds. The program gave rebates of up to $4,500 for drivers who trade in drivable cars towards new, more fuel-efficient vehicles.

The program was a smashing success and led to sales growth for companies like Ford who had not seen sales increase since 2007. The original $1 billion in funds for the program ran out last week. The Senate voted to add $2 billion more in funds for the program and Obama signed the bill this week. The new endowment of money is expected to keep the Cash for Clunkers program afloat until Labor Day.

President Obama said in a statement, "Now more American consumers will have the chance to purchase newer, more fuel-efficient cars and the American economy will continue to get a much-needed boost."

Not everyone in Washington is happy with the new funds that were approved for the program. Many Senate Republicans opposed the program and were concerned about the effectiveness and cost of the program. The Republicans believe that the people buying vehicles using the new incentives would have purchased new vehicles even if the incentives weren't renewed.

Senator Richard Shelby from Alabama said, "These buyers would have bought the cars anyway."

Analysts say that the frenzied pace of buying that the program is inciting now simply won't last. The program is expected to boost car sales in 2009, but sales next year are predicted to be low because buyers have already taken advantage of government incentives.

Democratic Senator Debbie Stabenow from Michigan said, "The reality is this is a program that has been working."


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Thanks Shelby, you're a genius
By mdogs444 on 8/7/2009 9:39:56 AM , Rating: 4
quote:
Senator Richard Shelby from Alabama said, "These buyers would have bought the cars anyway."

Yes, of course they would. But now all you've done is taken water from one bucket, poured it into another bucket, and spilled a bunch of it all over the ground.

You sacrificed sales & economic numbers for the next few years to get them now, and in the process, you just wasted $3 billion dollars to artificially manufacture results into this years figures to make like the stimulus has actually worked.

What a bunch of bologna.




RE: Thanks Shelby, you're a genius
By mdogs444 on 8/7/2009 9:41:41 AM , Rating: 2
And by "you" I don't mean Shelby only. I mean the entire Senate and House. Even if he voted against it, he's part of the problem if he didn't bother to get the word out BEFORE they passed the bill.


RE: Thanks Shelby, you're a genius
By MatthiasF on 8/7/2009 11:36:26 PM , Rating: 3
quote:
"There is no question that the program has generated results. The shopping activity we've witnessed has generated a SAAR of 19.6 million, remarkable compared with the industry's sales record of 17.4 million set in 2000," noted Edmunds.com Senior Analyst Jessica Caldwell. "Of course, this level of activity will not continue, as it reflects the behavior of those anxious and able to participate in the program — and that is a limited set of people."


http://www.edmunds.com/help/about/press/154387/art...

So, no. I find it hard to believe that during a recession car sales would hit a new sales milestone without help from the Cars for Clunkers program, during the first month of the program and for the first time in nine years.


RE: Thanks Shelby, you're a genius
By jhb116 on 8/8/2009 11:20:08 AM , Rating: 3
And this is where the average person needs to take 5 seconds to open up whatever calculator app they have available to them and apply some common sense.

The original 1B/4500 = 222,222.2222. Even with the new 2B that gets us to a total of 666,666.6666. Putting the obvious "666" references aside, it should be absolutely clear that CARS program could not have "produced" 2.2 million sales over the record. This isn't to say it hasn't had an impact - because it has - just not the breakthrough success that the administration needs to raise it poor grades as reported on CNN.

Just because it is posted on the I-net doesn't make it a "fact"......


By MatthiasF on 8/8/2009 11:32:55 PM , Rating: 2
The Seasonally Adjusted Annual Rate (SAAR) is extrapolated from the first week of sales for the Cars for Clunkers program (last week of July 2009). They took the seasonal statistics for car sales (a pattern defined by averages from every year of sales to date), plugged in the last week of July to find how the year would have been if every week during the year had the program running.

It's not a real yearly sales number, just a way of speculating how the year would have been had the Cars for Clunkers began in January and ran the entire year.


RE: Thanks Shelby, you're a genius
By FITCamaro on 8/7/2009 9:53:04 AM , Rating: 2
I think he was saying we didn't need the program cause the people would have bought cars anyway. Just basing that on the prior sentence.


By mdogs444 on 8/7/2009 10:06:15 AM , Rating: 1
I know - see my second addition.


RE: Thanks Shelby, you're a genius
By spread on 8/7/2009 10:04:45 AM , Rating: 4
And not only that but destroyed perfectly good cars in the process, some of which could have easily been donated to lesser income individuals, or recycled for parts. Good luck trying to use anything out of an engine filled with liquid glass.... (sodium silicate).

And the so called environmental focus of this program is BS. It takes energy and fuel to produce a vehicle, significantly more than is saved by replacing clunkers.


RE: Thanks Shelby, you're a genius
By MatthiasF on 8/7/09, Rating: 0
RE: Thanks Shelby, you're a genius
By jhb116 on 8/8/2009 11:25:52 AM , Rating: 3
So, Einstein, how is pouring liquid glass into the engine recycling? It would be much more environmentally friendly to just send the engine to metal recyclers to be recast as fuel efficient engine - or maybe two or three depending on the relative sizes.....


By MatthiasF on 8/8/2009 11:22:26 PM , Rating: 1
It stops the car from being resold since the engine is the majority of the car's worth (and no one sane would replace the engine in a car so old), making recycling the only option. The cars are being sent to metal recyclers, albeit not specifically for new car engines.


RE: Thanks Shelby, you're a genius
By dr4gon on 8/7/2009 10:08:01 AM , Rating: 4
That's actually not true. I was thinking of replacing my current car with a newer used car. With CARS, I'm thinking it could be wise to use the $4,500 towards the purchase of a new car since my car is worth far less than $4,500. So really, this program does more than transfer water between buckets, there is some potential stimulation.


RE: Thanks Shelby, you're a genius
By SublimeSimplicity on 8/7/2009 10:27:40 AM , Rating: 3
But the OP's point is that the $4.5K didn't come out of thin air, it came from future tax revenue or trade imbalance (selling t-bills). So at some point, either someone's taxes are being raised or they get hit with inflation to make up the difference. Either way sometime in the future someone who would likely have purchased a new car will be forced to buy a used one.


RE: Thanks Shelby, you're a genius
By 67STANG on 8/7/2009 11:01:06 AM , Rating: 2
Nothing wrong with buying a used car-- in fact, it's usually much wiser. I typically like to find a used car that has <10,000 miles and is in excellent shape.

That way, the sucker that originally drove the car off the lot was the one who instantly lost $5,000-$8,000.


RE: Thanks Shelby, you're a genius
By Spuke on 8/7/2009 12:15:47 PM , Rating: 2
quote:
Nothing wrong with buying a used car-- in fact, it's usually much wiser. I typically like to find a used car that has <10,000 miles and is in excellent shape. That way, the sucker that originally drove the car off the lot was the one who instantly lost $5,000-$8,000.
Bingo!!! And that sucker will no longer be me!!!


RE: Thanks Shelby, you're a genius
By SublimeSimplicity on 8/7/2009 1:17:47 PM , Rating: 5
You're preaching to the choir... I haven't bought a new car since I was very young and naive over a decade ago.

But I was replying on the grounds of stimulating the economy. The purchase of a new car is more stimulating to the economy than a used car.


RE: Thanks Shelby, you're a genius
By Spuke on 8/7/2009 3:50:26 PM , Rating: 2
quote:
The purchase of a new car is more stimulating to the economy than a used car.
Why?


By WackyDan on 8/7/2009 3:51:21 PM , Rating: 2
Nothing wrong with that at all for most people.

I bought my truck brand new in December of 1998. 10.5 years later, it still looks great, runs perfect. I admit I overly maintain it/baby it. I plan on having it another 3 to 5 years as I put more miles on my bike and wife's car than the truck - due to that I'll buy a used truck next, but for me buying new and keeping a vehicle that long and knowing it has been maintained and pampered is worth the up front cost as I ultimately end up keeping it longer than a used car.

I spent less than $20k on it when new.... so far in 1.5 years that's less than $2k a year to own +gas and maint which has been minimal.

So to each their own strategy.

Now, We bought my wife's car new during the GM employee discounts in summer of 05. Great deal, and we'll keep it probably 10 years... Last new car I ever buy her as she likes to run into things with it. :)


RE: Thanks Shelby, you're a genius
By clovell on 8/7/2009 11:26:50 AM , Rating: 2
So, let me make sure I'm getting this. This $4500, for you, could be the difference between a new car and a used car. The disparity in resale values between a new and used car will likely eat a pretty big hole in that $4500 - most cars lose 10-20% of their value as soon as you drive them off the lot. That's the water that's being spilt all over the ground. I'm not sure if the stimulation you're talking about is really enough to make up for that...


RE: Thanks Shelby, you're a genius
By dr4gon on 8/7/2009 11:47:25 AM , Rating: 1
My car is worth no more than ~$1500, so yes. There are some things that make buying a new car worth while. For one, everything is new (who doesn't like new?) and has the warranty. Also, new cars tend to run smoother. I'm just saying the CARS program isn't so bad as people make it out to be. This money had already been allocated for "stimulus" and they might as well be giving it to the people to spend (not a cash check which people ended up saving) to stimulate the economy. By doing it now (rather than later), people go back to work NOW, people gain confidence, start spending in other areas, and the economy starts to turn around sooner than later.


By mdogs444 on 8/7/2009 11:51:28 AM , Rating: 1
quote:
By doing it now (rather than later), people go back to work NOW, people gain confidence, start spending in other areas, and the economy starts to turn around sooner than later.

Sorry to burst your bubble - but the car dealerships are NOT hiring anymore people just because of this incentive. It has done nothing but move car sales from three years out to right now, and took that total amount and gave $3B+ of it to China.

The economy would turn around just as well, if not better and sooner without the whole pork-ulous bill. Artificial market manipulation has NEVER worked, nor has it ever only achieved its intended purpose. There is always side effects no matter what - that's what happens when you mess with a free market system. Why they haven't quite figured that out yet is well beyond me.


RE: Thanks Shelby, you're a genius
By Crank the Planet on 8/7/2009 8:51:27 PM , Rating: 2
Why is everyone falling for this BS!!!
1 billion dollars was given to this program (that's $1,000,000,000). The rebate is $4,500 max if you qualify for the max. Most people don't. Even if everyone who bought a car got the max amount of $4,500 that would equal a little over $100,000,000. Where is the other $900,000,000??? Obama promised countless times there would be transparency with this administration. Funny how no one is given access to the cash for clunkers data. Now they just voted another $2,000,000,000 for the program. This congress is out of control. How long can this go on?

Everybody was pissed at Bush for spending too much money. Nobody was saying squat about Obama but now his ratings are going down, down, down. Just because you have checks in the checkbook does not mean you have money in the bank. You can't spend your way out of a hole. Now we are 1,000,000,000,000 in debt and they want to keep spending. They have no real plan to get out. They are cooking the books just like Enron so that short term numbers look good so they can say they are being successful.

Democrats and republicans- I say we need a new party, and maybe even a couple of them!


RE: Thanks Shelby, you're a genius
By MatthiasF on 8/7/2009 11:30:07 PM , Rating: 2
Alright, so only 2,222 cars were sold? Why am I asking, because if only $100 million was spent at $4,500, that's how many cars it works out to be (100,000,000/4,500 = 2222.2 repeating).

You can barely do arithmetic, so how about you go sit in the corner while the adults handle things.


RE: Thanks Shelby, you're a genius
By ChronoReverse on 8/8/2009 2:37:06 PM , Rating: 2
I hope you meant 22,222 cars ;)

Anyway, that's 222,222 cars for $1 billion


By MatthiasF on 8/8/2009 11:10:32 PM , Rating: 2
Epic fail on my part. Yes, 22 thousand not 2 thousand.


RE: Thanks Shelby, you're a genius
By kattanna on 8/7/2009 10:27:33 AM , Rating: 3
quote:
You sacrificed sales & economic numbers for the next few years to get them now


thats exactly what this program has and is doing. after this program has run it course, auto sales will fall off a cliff.. and then of course, they will cry out for yet another bail out

its trully sad to see that all there appears left in this country's leadership is short term thinking.


By FITCamaro on 8/7/2009 10:34:55 AM , Rating: 2
They only care about getting reelected. People have the WoW mentality. Give me it now. Long term goals and prosperity (or lack thereof) don't matter.


RE: Thanks Shelby, you're a genius
By MrBungle123 on 8/7/2009 10:42:43 AM , Rating: 3
Is it 2010 yet? We really need to throw most of these people out of office.


By Machinegear on 8/7/2009 4:12:15 PM , Rating: 2
By Lord 666 on 8/7/2009 4:48:43 PM , Rating: 2
Really looking forward to 2012!


RE: Thanks Shelby, you're a genius
By clovell on 8/7/2009 11:21:37 AM , Rating: 2
Great point - I was watching Good morning Chicago today while eating breakfast, and they had an economist from Perdue on. The guy was talking about how retail sales are going to suffer, especially back-to-school and holiday spending, because of this.

His main arguement was that now you've got all these people who squeezed themselves into committing ~$400/month of their available cash, who would have otherwise spent that money at shops & restaurants, which make up a far larger portion of the US economy than Autos. It was a very interesting viewpoint.


By mdogs444 on 8/7/2009 11:54:03 AM , Rating: 2
Well yeah. We got into this mess because of unsustainable personal debt in the housing market and people buying things that they shouldn't have bought - because long term, they could not afford them.

So what is the plan? Lets make an incentive for people to take out even more 3, 4, 5, and even 6 year loans.

We take out more debt, owe more debt to China.....this is 100% counter productive.


RE: Thanks Shelby, you're a genius
By Skott on 8/7/2009 1:17:02 PM , Rating: 2
I'm in agreement with the senator on this. Most of the people using the CfC (Cash for Clunker) Rebate would be buying new cars this year anyway if the economy was good. People who are truly hurting dont really get much, if anything, out of the CfC Rebate. Basically the CfC Rebate was just a perk for those who already had the money to buy a car but were just holding out for a good deal to come along.


By geddarkstorm on 8/7/2009 1:49:29 PM , Rating: 2
It's an interesting debate, as it hearkens to differences in philosophy. Would one rather a program like this, giving money to the consumer to stimulate buying, or the previous programs of just giving away trillions of dollars to companies behind the scenes?

There's the other option of not doing bailouts at all and letting the system reset, but let's put that option aside as it didn't happen, and just look at the differences between the two bailout strategies. Personally.. I like this method more than the mysterious TARP and such. The consumer gets something, and the company is still helped and spurred to continue product production, maintain jobs, etc. On the other hand, it could risk dropping sales in the future... In either case, we're just shuffling money around like you said; so a lot of it seems to be just perception: smoke and mirrors, heh.


Let's not forget the $200 Million...
By Beenthere on 8/7/2009 10:23:04 AM , Rating: 2
...just spent for new jets to chauffeur the VIP's in Congress around the globe. Our elected officials sure have skewed priorities, that we are paying for.




RE: Let's not forget the $200 Million...
By FITCamaro on 8/7/2009 10:38:39 AM , Rating: 2
That was just for buying new planes. There was another hundred million or so thrown around for other things to make our nobles and lords, I mean Congress, more comfortable.


RE: Let's not forget the $200 Million...
By FITCamaro on 8/7/2009 10:39:41 AM , Rating: 3
Pelosi will pitch it as green since now she can fly in a smaller jet than before to Commifornia from DC without stopping for fuel. Take commercial b*tch.


RE: Let's not forget the $200 Million...
By oab on 8/7/2009 12:38:22 PM , Rating: 2
After 9/11, it was determined that important positions in Congress (like House leader as they are 3rd in line) needed military provided 'secure' transport. They passed a law saying this too (this was back in the Bush years, but it had bi-partisan support so you can blame both parties).

Even if Pelosi wanted to (which I doubt she would) it is illegal for her to take commercial flights.


RE: Let's not forget the $200 Million...
By mdogs444 on 8/7/2009 11:06:56 AM , Rating: 2
Actually, its been updated to over $500M now...

http://online.wsj.com/article/SB124960404730212955...

Here comes Nazi Pelosi flying by herself, while her business is $13TR in debt....right after she scolds a private business for flying when their company is in debt.

Hypocrite?


RE: Let's not forget the $200 Million...
By tallcool1 on 8/7/2009 1:39:52 PM , Rating: 2
quote:
Lawmakers disclosed they spent about $13 million traveling the world last year, a tenfold increase since 1995, when travel records first were made available electronically. The travel costs are covered by an unlimited fund created by a three-decade-old law.

Glad they think of the tax payers money as unlimited...


By geddarkstorm on 8/7/2009 1:55:41 PM , Rating: 2
Sure it is! We can just print more at the Federal Reserve, after all :D! Absolutely no consequences. Right? */sarcasm*


The REAL top 10 figures
By mdogs444 on 8/7/2009 12:51:30 PM , Rating: 3
For those of you who want the real top 10 list of what people bought, a study was put out by Edmunds.com that totally contradicts what the Obama administration did. Sounds to me like Obama is trying to make everyone think that small cars were what EVERYONE wanted - when that couldn't be furter from the truth. Sure some wanted small cars as they have in the past, and many wanted bigger cars and trucks as they have in the past...

Not everything has to be a conspiracy. But skewing the results to meet a predetermined agenda is just wrong...

http://money.cnn.com/2009/08/07/autos/cash_for_clu...




RE: The REAL top 10 figures
By tallcool1 on 8/7/2009 1:35:45 PM , Rating: 2
Correct, here are the REAL sales numbers (source edmunds.com), not what the govt was publishing:
quote:
Rank of Vehicle Including all drivetrain options

1 Ford Escape

2 Ford Focus

3 Jeep Patriot

4 Dodge Caliber

5 Ford F-150

6 Honda Civic

7 Chevrolet Silverado

8 Chevrolet Cobalt

9 Toyota Corolla

10 Ford Fusion


RE: The REAL top 10 figures
By Spuke on 8/7/2009 3:58:48 PM , Rating: 2
quote:
Not everything has to be a conspiracy. But skewing the results to meet a predetermined agenda is just wrong...
Son of a b!tch!! What the hell is up with that?


RE: The REAL top 10 figures
By ClownPuncher on 8/7/2009 3:45:19 PM , Rating: 2
I do not like small cars, Uncle Sam I am. I will not drive them, in the rain. I will not drive them, on the roads of spain. When I drive them, they cause me pain.


RE: The REAL top 10 figures
By MatthiasF on 8/7/09, Rating: 0
what a bunch of crap
By Masospaghetti on 8/7/2009 9:54:59 AM , Rating: 4
^^ LOL you're dead on with that...

but seriously - because I drive older used vehicles that I fix myself, why should I be paying for someone else to have a brand new vehicle? What ever happened to Obama's promise for "an era of personal responsibility"? Who can have responsibility when you aren't punished for doing anything wrong?

And this IS just moving forward vehicle purchases, its not creating any new demand. This seems to be the latest trend - spend now, don't worry about the future, that'll be on our kids!! make today's numbers look as good as possible so I can brag about it in the next election and get back into office! seriously, when the debt begins to be completely crushing, social security has gone bankrupt, and everyone is paying for health care for everyone else so theres no incentive to be healthy, I don't want to be around either.




RE: what a bunch of crap
By FITCamaro on 8/7/2009 10:37:05 AM , Rating: 2
The debt is already crushing and Social Security is already broke. We'll soon be paying more on interest towards the debt than we do on defense the way we're going.


Quick sum up
By bighairycamel on 8/7/2009 9:40:33 AM , Rating: 2
Poster1: ...This is good for the economy

Poster2: But this is my tax money!!!

Rinse and repeat




RE: Quick sum up
By geddarkstorm on 8/7/2009 1:59:50 PM , Rating: 2
Or...

Poster3: This is horribly bad for our economy in the long run: risks devaluing our money to Zimbabwean levels and causing rampant inflation. One day China will be repoing the country.


RE: Quick sum up
By MatthiasF on 8/7/09, Rating: 0
"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation











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