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News CARS Program

  1. Jul 31, 2009 #1

    j93

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    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
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  3. Jul 31, 2009 #2

    OmCheeto

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    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
  4. Jul 31, 2009 #3

    Ivan Seeking

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    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
  5. Jul 31, 2009 #4

    Pengwuino

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

    (stay on topic people!! o:) o:) o:) )

    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.
     
  6. Jul 31, 2009 #5

    Ivan Seeking

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    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
  7. Jul 31, 2009 #6
    From what I was hearing on the radio it sounds like they should kill the program before it costs too much more. The $2B they just added is probably already mostly gone with all of the back applications piled up.
     
  8. Jul 31, 2009 #7

    Office_Shredder

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    Honestly, a couple billion dollars to push another million car sales isn't a big deal. Far more cost efficient than trying to bail out Ford if it goes under also
     
  9. Jul 31, 2009 #8
    I'm not adverse to the idea and what they are accomplishing. I am just wondering how much more money it is going to cost. Apparently dealers have been racking up applications since July 1st. In less than a week the number of applications they had processed already broke the bank and there are still plenty more waiting to be processed right now. If they keep accepting applications I'm wondering how many dealerships are going to be left holding the bag.
     
  10. Aug 1, 2009 #9

    Office_Shredder

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    Wouldn't that be an argument for putting more money into it? To get through that backlog of applications
     
  11. Aug 1, 2009 #10
    Certainly. But they haven't stopped accepting them! Sorry. That's what I meant by 'kill it', stop accepting applications. It just seems like it could spiral out of control and turn into a big money hole if they don't stop accepting the applications. Now that it has been in the news so much there will probably be more people looking to take advantage.
     
  12. Aug 1, 2009 #11

    j93

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    I meant private-party sale by someone who hasnt traded their car in , any piece of s--- car that barely runs buy it for 800 then keep it for a year and then turn it into the dealer for a 3500-4500 credit effectively using it as a coupon.
     
  13. Aug 1, 2009 #12

    j93

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    It has no provisions about buying american cars.
     
  14. Aug 1, 2009 #13

    russ_watters

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    And another billion dollars we don't have, to be subtracted from our GDP (plus interest) over the next few years! :rolleyes:

    Don't get me wrong, it's not a terrible idea, but just because the money went fast, that doesn't have anything to do with whether the idea was a "great success".
    I'm glad he didn't do that either, but you can't give someone credit for doing something good by not doing something bad. I didn't kill anyone today, so that makes me a great person! :rolleyes:
     
  15. Aug 1, 2009 #14

    mgb_phys

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    The system in Canada is slightly smarter. You can trade in your car for $X in public transit passes or 75% of X toward a bicycle or 50% of X in cash.

    Th system in the UK is impressively stupider, last year they announced possible large rebates for clunkers. Which might start this year or next year, they are looking into the details. The result is zero car sales because nobody wants to buy a car now when they might get a few $1000 off in 6months.
     
  16. Aug 1, 2009 #15

    Ivan Seeking

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    And if no one took advantage of the program? The goal was to stimulate auto sales and put money into the system. It couldn't have been more successful.

    As for the increased debt: Hopefully you know by now the working theory that by spending the stimulus money now, we will help to stimulate growth and ultimately reduce the debt to GDP ratio by growing the GDP. There are no guarantess that this will be successful, but I put much more faith in Obama, Geitner, and Bernanke, than I do the Republicans who are complaining - the ones who got us into this mess.

    Were the GDP to remain flat, as happened with Japan for over a decade, our long=term debt would be far worse than by providing a stimulus now. The Japan model results from not acting aggressively. That is why we are acting aggressively. The Republican solution is to bury our heads, adhere blindly to a failed ideology, and ignore history.

    Many economists wanted him to nationalize the banks - many said he had no choice if he was to prevent a national and perhaps a global economic meltdown. Obama was convinced that he didn't need to do this, and he was right. It wouldn't be "bad" to nationalize the banks if it was the only way to save the country from an even bigger disaster.

    What's more, the right wing wants to portray him as a socialist when in fact he went out of his way to avoid socialist solutions. But, have any Republicans given him credit for this? Of course not. That would mean admitting they are lying...again!
     
    Last edited: Aug 1, 2009
  17. Aug 1, 2009 #16
    Never actually read the rules did you?

    The trade-in must have been registered and insured by the owner for 12 months prior to the trade-in.
     
  18. Aug 1, 2009 #17

    j93

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    :rolleyes:
    Yes I did, but you didnt actually bother to read my post did you?

    maybe if I simplify
    12 months = 1 year

     
  19. Aug 1, 2009 #18

    j93

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    Its an great idea in theory in practice a bad execution by the US.
     
  20. Aug 1, 2009 #19

    Ivan Seeking

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    Also noteworthy: 250,000 cars lands in the neighborhood of $5-6 billion in auto sales.

    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
  21. Aug 1, 2009 #20

    OmCheeto

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    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
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