# News CARS Program

1. Jul 31, 2009

### j93

I was wondering what people thought about the CARS program.

http://www.cars.gov/ [Broken]

It is a program with niche audience and clearly ill advised. Who is it for?

The only thing I imagine it could do is drive the price up of used junkers cars due to people hoping to buy one cheaply but less than a 2500 and waiting a year hoping to use it as a coupon.

Last edited by a moderator: May 4, 2017
2. Jul 31, 2009

### OmCheeto

Well. I was a bit pissed that I traded in a clunker, trying to stimulate this freakin' economy, for a 2009 California compliant emission vehicle 2 months ago only to find out today that the $1E9 had been spent in 1 week. And now I hear (yes. hearsay) that another$2E9 has been approved for the program.

Actually, I'm not pissed.

I like my new truck. :!!)

Oops. http://www.newser.com/article/d99pl1o80/house-passes-2-billion-to-replenish-cash-for-clunkers-car-purchase-program.html" [Broken]

Last edited by a moderator: May 4, 2017
3. Jul 31, 2009

### Ivan Seeking

Staff Emeritus
It has given the auto industry a huge booster shot. The auto dealers are thrilled. One dealer in NY said that half of all sales this week were driven by the cash for clunkers stimulus.

The money was expected to last twelve weeks and it was gone in four days! Congress had to rush through legislation to extend the program due to its raging success. So there's an additional 1 billion in the economy that we didn't have four days ago [as soon as the auto dealers file for their reimburstments].

Another great success brought to you by the Obama admin.

The long-term benefit is to not only stimulate the economy, but also to help reduce our dependence on foreign oil, which directly affects the GDP by reducing the trade deficit. The ~ 250,000 gas hogs traded in will be destroyed.

Last edited: Jul 31, 2009
4. Jul 31, 2009

### Pengwuino

Doesn't the word "another" imply there's been more then one? :rofl:

(stay on topic people!! )

This is quite a coincidence! I was reading the wikipedia entry not 5 minutes ago and noticed something quite interesting.

http://en.wikipedia.org/wiki/Cash_for_clunkers

So it looks like there won't be an influx of junkers to purchase.

5. Jul 31, 2009

### Ivan Seeking

Staff Emeritus
Obviously you haven't been watching the news. The credit markets have mostly stabilized; home prices are up for the first time in 34 months; the DJIA is up 40% since the low in march [that would yield an annual gain of about 120%]; the GDP was five times better than last quarter and growth is expected next quarter. And most importantly, the world economy did not collapse. This was all accomplished without nationalizing the banks, in spite of intense pressure on some fronts to do so.

The cars program is just the latest good news.

Last edited: Jul 31, 2009
6. Jul 31, 2009

These numbers ars impossible to quantify absolutely, but we can get a ballpark estimate of the effect the cars for clunkers has on oil consumption and the GDP. If we assume that we gained an advantage of 5 miles per gallon, say from 15 to 20 miles per gallon, by replacing gas hogs with more efficient gas hogs, and assuming an average of 15000 miles per year per vehicle, we can expect a reduced demand of about 62.5 million gallons of gasoline per year. We get about 19.5 gallons of gas from every barrel of crude, so if we assume the current price of about $70 per barrel, this respresents reduced imports of about$225 million dollars per year. If we also assume that we get a five-year benefit from this, we find a net benefit from the stimulus of about $125 million above the cost of the stimulus! So in fact by spending a billion, we get more than that back from the energy savings alone - even the superficial net effect on the GDP is less than zero. It is a money maker! The advantage gained through stimulating the economy is more difficult to quantify, but any advantage at all is icing on the cake. Presumably this will provide a significant boost to the auto industry and the economy. Summary: The cars for clunkers program pays Americans instead of OPEC. OPEC is the only loser in this scheme. It was reported earlier that Ford Focuses were flying out the showrooms this week. Last edited: Aug 1, 2009 20. Aug 1, 2009 ### OmCheeto I think it's funny that the CARS.gov website lists the 2010 vehicles. You can trade in your brand new$180,000 12 cylinder 12 mpg http://www.fueleconomy.gov/feg/CarsSelectEng.jsp?year=2010&make=Bentley&model=Continental%20Flying%20Spur&hiddenField=Findacar" [Broken] for $4500, as long as it's in running condition of course. And I was happy to see that the car I traded in did not qualify for the rebate. It's hard to imagine that I could have picked up my brand new vehicle for only$5500 when the MSRP was almost \$17,000.

But I like the program. I've long felt that the only thing keeping death trap micro cars from taking over the road were death inducing behemoths. It's odd to think that the program might eventually turn my truck from being one of the smallest on the road into one of the largest.

Last edited by a moderator: May 4, 2017