Obama Backs Cash for Clunkers Legislation

Cash4clunkers

President Barack Obama stated during a speech regarding the auto industry this morning that he backs a form of incentives for car buyers who trade up from aging, inefficient vehicles to more fuel-efficient ones.

He specifically mentioned current legislation in need of funding — bills introduced in the Senate in January and House in March that would provide vouchers of up to $7,500 for people giving up their old clunkers. The voucher would be good for use toward either the purchase of a new car or for public transportation.

The Senate bill’s co-sponsor, Susan Collins (R-Maine), says it would help reduce dependence on foreign oil. The plan would operate for four years and is projected to take a million vehicles a year off the road. Buyers would have to purchase a car that is both 25% more efficient than federal guidelines and is a 2004 model year or newer. We’re not sure which numbers regulators would use to determine fuel efficiency, because CAFE figures are not published on car window stickers. The government would likely release a list of eligible vehicles that vouchers could be applied toward.

Theoretically, the money from the government would be more than a dealer would pay for an older car or SUV a buyer would bring as a trade-in.

There are a lot of practical issues we have with such a plan, starting with which cars would be eligible. The other is the fact that the plan isn’t limited to only new cars. With the recent economic struggles, demand for used cars is up, while new-car sales continue to fall. If an added benefit of this program is to help struggling automakers, making it available on the purchase of cars going back to the 2004 model year lessens the impact on new cars purchased.

The president said the plan would be retroactive to today. We’re not sure what that means, either, given there’s no voucher plan in effect. We assume he means that any car purchased from today onward would count, and you could take your old clunker in to get a voucher after the fact. We’ll update this post when more information is known.

Comments 

cody

when this becomes law, i'll retire the blazer...but not before then.

tigerfish

Maybe the President could point out where in the Constitution it says that government can do all of these things he wants to do. Where is the money coming from for this and other feel good programs? Another thing with programs of this type is that if the cars go to a scrapyard to be melted down, that takes a lot of parts off the market and possibly some cars that might appeal to collectors.

DodgeFan

I agree until the bill is signed sealed and deliveried no buying.

Dan

Tigerfish -
Article 1, section 8, clause 18.


J

This is bull, why the hell did I have to pay with my hard earn money to buy my car 2 years ago?!

Ken L.

My suv is not a clunker. It’s very reliable and performs task that most vehicles cannot. I just recently kept track of the mpg and got almost 16, mix city and highway, using 93. But with that said, $7500 + trade in value will get me into a new Prius or Insight; and I’m sure it’s true for most people, whether they admit or not. Also, how does it work if you give opt to take public transportation? Do you get a monthly stipend to offset your metro transit fare???

sparky

Wow! What a great way to subsidize all the IMPORT makers. All the stuff like WTO, etc. forbids the US to discriminate against foreign brands, whether made in the US or imported.

Now Honda will be able to sell all sorts of imported Fits. Hyundai will be able to sell loads of imported Elantras and Accents. Toyota can sells bunches of Yariss.

What could be better than having American taxpayers subsidize the purchase of imported goods? Another brilliant Obama idea.

Ken L.

Sparky,

Not everyone will buy an import small car. Ford is coming out with the Fiesta and GM with the Cruz, Volt, etc. Both companies also have other vehicles in their portfolios that should meet the requirements of the voucher; now, whether anyone wants them is another matter.

sparky

Ken:

Yeah, I know. I actually own an efficient American car - 08 Focus.

The fact is that the overwhelming majority of fuel efficient cars come from foreign brands like Honda, Toyota, Nissan, VW, Hyundai, and many of their most efficient models are imported. The foreign makers also dominate in US/Canada made efficient cars, especially Civic and Corolla.

This junker rebate, because of the "exceed CAFE requirement", actually goes to hurt companies like GM and Chrysler just as Barry is professing to want to "help" them.

Then we also have the joy of knowing that our tax dollars, and our kids' tax dollars, and our grandkids' tax dollars will go to subsidize foreign auto makers due to WTO regs. It's plain stupid.

Phil

Hey my house is not close enough to the beach. When will the 'House to Beach' legislation get passed?? A $750,000 incentive for me selling my house so I can get close to the beach sounds good.

I can't believe I actually voted for this jack-azz.

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

Elaina

http://www.craigslistmaster.info


cody

phil,

although i would think your house on the beach legislature idea is hilarious...i actually think this is a decent idea to get some of the aging vehicles that aren't as clean as today's vehicles off the road. other countries do it.

C

Sparky,

Then you are just blaming the fact that the domestic made vehicles are not as efficient as the foreign made vehicles as it is the fault of the foreign made vehicles.
Wasn't that the fault of the domestic makers then? For not making competitive efficient vehicles to begin with.

Juan Carlos

i better get the 75 hundred for sure. nothing of "may" and "up to" depending on my taxes. if i have to pay 10k in taxes, now i pay 2.5k or i am already getting 2k, now i get 9.5k. period. perhaps bill gates won't get anything, but regular people should get it all no questions.

if i know i would get 1.5k for putting insulation in my house, i would. but i might spend 2k and only get $100 next april.

bill

THE CASH FOR CLUNKER PROGAM AND ANYTHING LIKE THIS IS A PLOY I FEEL. FIRST THE USED CAR MARKET IS CRUMBELLING IN AMERICA AND THIS IS A BIGER PROBLEM THAT PEOPLE THINK! ITS CALLED FREE ENTERPRIZE AND THAT IS THE AMERICAN DREAM. BUT THE POWERS TO BE ARE NOT OFFERING ANY INSENTIVES TO BUYING A USED CAR ONLY A NEW ONE. WHY?BECAUSE THE BAIL OUTS ARE SET ONLY TO HELP THE RICH NOT THE MIDLE OR LOWER CLASS. WITH JOB OSS AT A RECORD HIGH AS WELL AS FORCLOSURES AND ALL WHY IS NOT CONGRESS LOOKING AT HELPING TO BAIL OUT THE COMON JOE IN AMERICA? THE CASH FOR CLUNKERS IS A WAY THAT THE NEW CAR DEALERS AND COMPANY CAN GET THE COMPATITION OUT OF THE MARKET BY CREATING LESS OF A RESORCE TO THEM ON THERE INVENTORY. NEW CAR DEALERS ARE PAYING OVER BOOK FOR USED CARS AND THIS MAKES THE USED CAR DEALERS UNABLE TO BUY THE NEEDED CARS AT THE BOOK PRICE. IN SO DRIVING UP COST ON THERE INVENTORY AND MAKING THE PROFIT THEY NEED NOT THERE. LENDERS ARE ONLY WILLING TO LEND 80% OF WHOLE SALE TO MOST BUYERS AND IF THE DEALER IS PAYING 100% OF WHOLE SALE THAT MEANS THE CONSUMER NEEDS TO HAVE A 800 CREDIT RATING FOR NOTHING DOWN OR A SUBSTANCHAL DOWN PAYMENT OF 1000-2000 DOLARS. AND THE AVERAGE AMEICAN CAN NOT AFORD THAT IN THIS TIME IN HISTORY. AND WITH THE CASH FOR CLUNKER PROGRAM IT WOULD MAKE IT TO WHERE THE GOVERMENT WILL SEND THESE CARS TO THE CRUSHER MAKING IT HARDER TO HAVE THE USED CARS ON THE MARKET. I FEEL THATTHIS IS A WAY THAT THE BIG AUTO MAKERS CAN SHUT OUT THE SMALL USED CAR DEALERS AND SHUT THEM DOWN SO THAT IN TIME THERE WILL BE NO USE CAR DEALERS IF THIS PROGAM IS INACTED. BECAUSE THIS PROGRAM IS ONLY AIMED AT NEW CAR DEALERS NOT USED CAR DEALER. THE SAME IS SET FOR THE TAX BRAKES IF YOU BUY A NEW CAR THEN YOU GET THE TAX BRAKE. BUT IF YOU BUY A USED CAR FOR 23,000.00 YOU GET NO BRAKE. WHAT IF YOU BUY A 7,000.00 KIA YOU GET A TAX BRAKE. BUT BUY A 2007 TAHOE FOR 23,00.00 AND YOU DO NOT QUALIFY FOR A TAX BRAKE. DOES OBAMA HAVE STOCKS IN THE BIG AUTO MAKERS? OR IS IT BECAUSE HE HAS NO CARE FOR THE FREE ENTERPRISE AND THE COMON AMERICAN WHITH A CREDIT SCORE THAT IS NOT GOOD ENUGH FOR A NEW CAR? YOU BUY A NEW CAR AND THERE IS A 2,000-7,000 DEPRESEATION WITH ONLY 1 MILE ONE THE CAR AFTER YOU BUY IT. I AM NOT SAYING NOT TO BUY NEW CARS BUT WHAT I AM SAYING IS THAT THE BAILOUT AND ALL THAT GOES ALONG WITH IT IS SELECTIV AND PREGIDUCE TOWORDS THE INDEPENDENT AUTO MARKET. AND THAT IS NOT WHAT AMERICA TO ME AND MANY OTHER IS ABOUT. MAKE THE TAX BRAKES AND THE INCENTIVES BY THE GOVERMENT EVEN TO ALL THE AUTO INDUSTRY. NOT JUST THE BIG GUYS THAT WOULD RATHER HAVE THE SMALL INDEPENDENT AUTO DEALER OUT OF THERE WAY.

Bob

Cars like the Honda Civic seats 4 comfortably and gets close to 30 miles per gallon, and cost $17-21K. Any reasonable person can live with such a car--including long road trips.

Cash for clunkers and the new milage requirements (35.5 m.p.g.) announced today are long overdue. The claimed Constitutional arguments against the Federal government's authority to set mileage standards are bogus. They would lose at the Supreme Court 9-zip.

Get real, people.

Original sheth

Bob:

Some people have kids. Some people have pets. Some people need to haul large objects in their personal vehicle. To suggest that a Civic is large enough for any "reasonable" person is ridiculous. Its reasonable if you are single or childless and have no need for cargo space or a decent backseat.

Skinner

I'm with OS on this one. My wife had a 2001 Civic. Great mileage, but with tradeoffs. When my oldest would sit in the back seat - which was almost directly over the rear wheels - he would throw up after every trip longer than an hour. Once the third kid came along (an unplanned surprise for all you Sierra Club members, but still a very good surprise) it was virtually impossible to fit three government-mandated child seats side by side in the back seat of the Civic. She traded it for a FWD, 4 cyl Highlander and couldn't be happier.
And my ride? Grand Caravan. Enough room for mom&dad, three kids, the father-in-law, and my music gear for my side job.

Allie

I think this is actually a good idea, so all the obama bashers can cring. I have a 2000 Jeep Grand Cherokee with 126K miles on it. I need to trade it in to get a newer more fuel efficient car but I cannot get any money for it really, and I cannot afford to get a new car without getting a certain amount of money for it to put as a down payment on my next car. This would help me tremendously.

The Cars For Clunkers legislation is actually very focused and is only available for a limited four month time frame. It offers participants the opportunity to trade in certain older cars for certain other new ones. Unfortunately, many cars do not qualify for the program and therefore are still ideal for the 'traditional' car donor option. Such non-qualifying cars let people give their cars to non-profit organizations who help people with many different kinds of needs, like supporting youth organizations or our older folks or to help promote the arts and health research.

Help yourself with the Cash for Clunkers program if you qualify or if you don't qualify or would like to help others, give your "clunker" to charity and take a tax write-off!

Here are 400 not-for-profit organizations that can always benefit from your 'clunker' or unneeded vehicle. To donate your car, just click on the link to the charity on the web pages below.

http://www.donatecarusa.com/charities/full_list

http://www.donatecarusa.com

jim

dose the government get paid from the scrapyard for the clunker or do they pay the scrapyard to take it?

peanut

wow. the program is working, hours in AMERICAN plants have just been revealed as going UP to meet the new demand the program has brought.

As for collectors and parts, no one would be stupid enough to just crush working cars if there is a high demand for parts. These folks are not complete idiots.

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