Success Threatens to Sink 'Cash for Clunkers' Program

[Chris_]

Success Threatens to Sink 'Cash for Clunkers' Program



WASHINGTON - The White House said Thursday it was reviewing what has turned out to be a wildly popular "cash for clunkers" program amid concerns the $1 billion budget for rebates for new auto purchases may have been exhausted in only a week.

Transportation Department officials called lawmakers' offices earlier Thursday to alert them of plans to suspend the program as early as Friday. But a White House official said later the program had not been suspended and officials there were assessing their options.

"We are working tonight to assess the situation facing what is obviously an incredibly popular program," White House press secretary Robert Gibbs said of the Car Allowance Rebate System.

"Auto dealers and consumers should have confidence that all valid CARS transactions that have taken place to date will be honored."

*snip*

"Cash for Clunkers may have run out of cash, but America's consumers haven't run out of clunkers. We're going to work with the Obama administration to keep this wildly successful program going until it reaches its goal of helping consumers take 1 million gas guzzlers off the road," he said.

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Hmmmm.  1 billion dollars to get 1 million cars off the road at $3500 to $4500 each.  Must be liberal math again.   

[NHSparky]

Ah, yes--da gubmint will provide!  It's FREE, dontcha know.

[JohnnyReb]

That's just great. Now they can lose their house and their car at the same time.

Wasn't it people that couldn't afford to spend any more spending more than they could afford to spend that got us in this mess?

Just trying to use spend and more a lot in one sentence.

[TheSarge]

Levin was saying the other night that not one dealership has seen their money yet from this program.

The auto makers and their dealerships have shelled out the $4,500 per car to buyers...sent in all the required paperwork...and not seen one dime back yet.

[NHSparky]

And here's the thing--people with 700 FICO scores are getting turned down for car loans, so now all of a sudden we're supposed to see huge increases in car purchases from people who couldn't afford them in the first place?  "Uh, sorry, sir.  You don't qualify for our regular lending program at 5 percent for 60 months, but there IS this program where for 1/3 down and 12 percent interest...."

And I can see this shit happening.  A LOT.

[DumbAss Tanker]

Well, honestly, I'm glad it seems to have worked, but I don't know how much more 'mileage' there would be in it.  As tight as credit has been, it seems like this probably represents the cream of the borrowing crop deciding to stop sitting on their hands and dump the oldest car in the family for a bonus.  Continuing the program would likely run into problems with prospective customers not having high enough FICO scores to get the main loan, and the pool of the credit-worthy who had just been sitting it out is probably running low already - after all, they would have been the ones in a position to respond quickly, so most of those who would be interested in that group probably already bit.  Easier credit from lenders would make extension of the program workable, but that is pretty much out of the Government's hands and God willing will remain so.

The deal doesn't make any sense for me personally, mileage is a tertiary concern behind avoiding new debt and ruggedness/reliability...a paid-off smaller SUV or small/medium pick-up of 10+ years age is the vehicle best-suited to my own needs. 

[NHSparky]

The deal doesn't make any sense for me personally, mileage is a tertiary concern behind avoiding new debt and ruggedness/reliability...a paid-off smaller SUV or small/medium pick-up of 10+ years age is the vehicle best-suited to my own needs. 

And yet this program is going to kill auto parts manufacturers (a dozen of which have already gone out of business this year alone).  Try having one of those older vehicles only to be told parts are unobtainable because the manufacturer simply wasn't making enough of them anymore and went under.  There was a related thread on this in Economic, IIRC.

[Chris_]

Hmm I bought a used 2007 pickup in May....got 4.8% with CapitalOneAuto check by mail program...I walk in, get the price I want then fill out the check. I don't know where this credit crunch is for people that can afford it.

[Chris]

Hmmmm.  1 billion dollars to get 1 million cars off the road at $3500 to $4500 each.  Must be liberal math again.   

Just wait until the gummint gets into the health care business.  It'll be loads better.

[thundley4]

Hmm I bought a used 2007 pickup in May....got 4.8% with CapitalOneAuto check by mail program...I walk in, get the price I want then fill out the check. I don't know where this credit crunch is for people that can afford it.

Most people that I know use the credit unions, less hassle and easier to get the loan.

[Chris_]

House Racing to Pass $2 Billion Bill to Boost 'Cash for Clunkers' Program

The House raced Friday to pass legislation to inject an additional $2 billion into the "cash for clunkers" program, whose immediate popularity this week threatened to sink the program.

The $2 billion boost would be created by shuffling around funds from the Recovery and Reinvestment Act, an emergency stimulus for the original $1 billion budget for rebates on new cars that lawmakers worried had been exhausted in only a week.

*snip*

House Minority Leader John Boehner, R-Ohio, said it was unclear how many Republicans would support the infusion plan. "There are a lot of questions about how the administration administered this program. If they can't handle something as simple as this, how would we handle health care?" he said, a sentiment echoed by Sen. David Vitter, R-La.

"Cash for Clunkers has only been active for a short period of time, and it has already run a deficit," Senator Vitter said in a statement. "But we are supposed to trust the president and his Congressional allies to accurately 'reform' the health care industry, which makes up one-seventh of our entire economy? "

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[NHSparky]

Kinda makes you wonder how surprised they're going to be when those healthcare costs turn out to be so much higher than initially projected as well.

[thundley4]

Kinda makes you wonder how surprised they're going to be when those healthcare costs turn out to be so much higher than initially projected as well.

Nope.  Those idiots already that every government entitlement program runs over budget.  They're are even preparing for it ahead of time. The Magically Doubling Surtax

[JohnnyReb]

I read the link....these idiots should go into stand up comedy.

....and don't say a thing about Al Franken, he never was funny....he ran for the senate so he could learn how to be funny.

[dutch508]

I never saw how al frankin was funny- even when he was writing for SNL.

[debk]

The morning news showed one of the local Ford dealers (one of the largest in the area) taking their sign down for cash for clunkers....they did 7...and were told yesterday to halt.

Glenn Beck is on a rant about it right now on Fox....

[thundley4]

The morning news showed one of the local Ford dealers (one of the largest in the area) taking their sign down for cash for clunkers....they did 7...and were told yesterday to halt.

Glenn Beck is on a rant about it right now on Fox....

It would be interesting to find out which makes were bought at the end of this. So far Chevy is the only one that I have heard is matching the government on this, but others are offering other incentive amounts.

[debk]

It would be interesting to find out which makes were bought at the end of this. So far Chevy is the only one that I have heard is matching the government on this, but others are offering other incentive amounts.

One of the Jeep dealers here was offering $4500 on any car in brought into their dealership, in addition to the government monies.