Will a Cash-for-Clunkers Program Work?

U.S. Program Has Many More Restrictions than its Successful Counterpart in Germany

(CBS)  In Germany, it worked like a charm - a program to give consumers cash for their old clunkers took gas guzzling cars off the road, and boosted new car sales in Germany by 40 percent, reports CBS News correspondent Randall Pinkston.

But here in the U.S., a similar cash-for-clunkers program is more complicated. Dealers like Jim Russomano in New Jersey say it may not be as effective as Germany's in driving up sales.

"The restrictions are much more severe than I thought they would be," said Russomano, the owner of Nutley Chevrolet. "I thought it would be a lot easier to take some junkers off the road but it's not going to be as easy as I thought."

Germany spent $5 billion to buy back cars. A clunker was defined as any car more than nine years old. Turn one in for scrap and you'd receive the equivalent of $3,300 dollars towards a new car.

The U.S. allocated $1 billion for its program - Car Allowance Rebate System (CARS). Car buyers who qualify received $3,500 or $4,500 towards a new car.

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Click here to find out if your car's gas rating qualifies as a clunker
Click here for general information about the program

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But the qualification for "clunker" isn't easy. It's based on an EPA gas mileage rating of 18 miles per gallon or less when the vehicle was new.

So a 1989 Buick Regal, a 20-year-old car, does not qualify as a clunker, beause it was sold with an EPA rating of 21 miles per gallon. But a 2000 Ford Windstar, only nine years old, does qualify because its original gas mileage was only 17 miles per gallon.

"I think that more than 50 percent of the people will not qualify for any of the vouchers because their vehicle that they're looking to get out of exceeds the 18 miles per gallon," Russomano said.

And there are more rules: the vehicle has to be less than 25 years old, in drivable condition, and registered and insured by the same owner for a full year before trade-in.

"We estimate that about 150,000 people will take advantage of this deal," said Rebecca Lindland, the director of the Autos Group at HIS Global Insight in Lexington, Mass. "It seems like a good idea except when you really go and try to qualify for it you don't."

For car owners able to meet the requirements, there's only one more wrinkle: while the program took effect on July 1, the rules won't be in place until July 23. To find out if you're car's gas rating qualifies as a clunker, click here and for general information about the program, click here.

[jhenry1807]

so if you have two or more clunkers at your house you cannot trade both of them for one car. The program is for one per
person.


Jimhenry
Blogger
www.cashforclunkersfacts.info
http://www.cashforclunkersfacts.info

[fleabag75]

One must check the 'official' web-sight for mileage. Believe it or not a lot 'stickers' lied back then.(yeah, who would believe) Also, I did indeed already take advantage of the program and like it or not, I consider it my personal little piece of an AIG bonus! That's the only bail-out I'll be getting.

[bugbyyy]

This reporter is WRONG!, It is the NEW EPA rating of the old car, not as it was sold!

[rdupuy11]

Why don't reporters ever do anything useful?

I read the article, I visited the link. I still don't know if my vehicle qualifies. Is it the combined City/Highway, is it under the new EPA calculations or the old?

You say the 2000 Windstar qualifies, but it has a Highway over 18 mpg...did you calculate your own Highway/City combined rate that the website absolutely does not display for 2000 model years? If so, did you use a 50/50 ratio?

Why did you suggest the website tells you if you are qualified or not, when it does not?

[grabandgo]

How about GM built better quality cars. Clunkers? Vega Chevette Pontiac Fiero for a few.
The auto industry and unions created this mess, not us.
We don't need to fund buying cars with more tax dollars!

[cecil1961]

it was a good idea to start, but as usually our government takes a good idea and screws it up. I have a clunker but have only own it for 7 months, I would buy me a new car, but I can't because I have only had it for 7 months. Again, how stupid, most clunkers I have own dont even last a year.

[whatsup49]

my 10 year old saturn won't qualify even though my actual mileage now is about 16 city miles and 19 highway miles. i've kept the car maintained, but the mileage just keeps on dropping. but because of the way this program is designed that car won't qualify, but my friend's 2-year-old gas guzzeling suv does. this just stinks.

[Bobthefirst]

If it makes you feel any better, your friend's two year old vehicle doesn't qualify, either. Vehicles have to be model year 2001 or earlier to be eligible for trade-in under this program.

I can sympathize with your plight, however. My wife and I have a 1999 Buick Regal that gets far less than 18 mpg, but is rated at 21 mpg according to the government. We don't qualify, either.

Frankly, it wouldn't matter if we did; this money was confiscated by force from people who earned it, and is being given to people who didn't work for it at all. It's redistribution of wealth in the purest form, and it's wrong.

[bill517]

Classic example of govt screwing around where it doesn't belong. Be much more effective to just hand the cash over to the UAW.

[vietnamwar]

Germany spent $5 billion to buy back cars. A clunker was defined as any car more than nine years old. Turn one in for scrap and you'd receive the equivalent of $3,300 dollars towards a new car.

The U.S. allocated $1 billion for its program -

We are so Broke because of OBAMA TRILLION DEBT..

[Newster1]

We are so Broke because of OBAMA TRILLION DEBT.."

He's not the one who DOUBLED the debt from 5 trillion to over 11 trillion in 7 years, threatening other countries, including Russia and almost restarting the cold war, threatening Iran etc and destabilizing oil prices due to that- effectively trippling the price we pay at the pump.
That in turn caused the economic collapse and unemployment we are seeing now, it is Obama who is trying to clean that mess y our buddy king george hte last made.

[vietnamwar]

Yep, the restricted program will not work here in the US...Dump policy..people have an old Honda can't not trade in .....

[Bobthefirst]

Nobody denies that Bush spent a lot of money when he shouldn't have. To do so would be ludicrous. That being said, Obama passed (in his first year of office) a budget larger than any of Bush's - including the war spending. That doesn't account for the $1,300,000,000,000 porkulus package he passed, too. Since that package was such an abysmal failure, there is now talk (still in the first year of office, mind you) of another porkulus bill. When it comes to budget deficits, people in glass houses should forget about the existence of rocks.

[lawyertom1]

If the function of the program is to get polluting, gas guzzling cars off the road, the concept is good. If the function is to get hi mileage, low pollution cars on the road, the program is deeply flawed. If you want to have a real impact, then any car getting 20 mpg should be included in the program, and the requirement should be the purchase of a car getting a least 35 mpg. Make it count; make it effective. Afterall, it is my tax dollars that are subsidizing this farce.

[despido]

It's a great idea if done properly, this is not. My '96 and my old work truck don't qualify - and I was looking to replace them. No incentive there.

This is a thinly diguised bribe to lure buyers into government prescibed vehicles. Next come limitations on mileage through factory installed GPS units, then will come the government issued 'use permits' allowing where you might venture.
Strange but true... Barney Frank has pushed to have auto loan requirements reduced (sub-prime auto loans). Haven't paid attention, huh Barney?

I'm only surprised they don't limit it to American made vehicles - like Toyota, Nissan, BMW, Mazda, Suzuki, etc.... not those made in Mexico or Canada, like Ford & GM.

[iam4honesty]

Actually, the 'sub-prime' auto loan business is huge in this country, and growing. Has been around for many years.

Haven't been paying attention, huh despido?

[despido]

Actually, the 'sub-prime' auto loan business is huge in this country, and growing. Has been around for many years.
by iam4honesty July 12, 2009 7:41 AM PDT
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Government sponsored, with tax payer money?

Not til Obama took over the banking system (GMAC is now a bank with government provided capital) and Barney demanded a reduction in established loan requirments.

[xlib]

o_the_potus-or should you say totus??
More tax give aways to the "rich". Wow, you sure are a student of the thug in charge.
Try thinking for just a second and tell us how giving people who can't afford a new "green"car now money that amounts to a down payment on a new government approved "green" car. Just how will they make the payments?? Ever thought that far, libtard?
See, do a bit of history research and see how well it worked for fannie & freddie and sub prime loans for mortgages.
BTW-your thug administration is now pushing for fannie & freddie to make money more available for mortgages. You libs never learn.
'

[xlib]

Well, golly, sure it will work cause that's the word the msm and this thug administration will put out. AND, if for some reason it doesn't work and is so obvious that even the most rabid lemmings see it, they'll blame the Republicans! See how easy that is.
So, we'll put the used car dealers out of business, no problem! Besides, they're probably conservatives anyway.
Then, we'll give the money to those who drive the administrations so called "clunkers" money to put down on one of the government motors cars. Chances are there will be many defaults on the car loans and guess what! We'll have the same thing as the subprime debacle brought to us by fannie and freddie, thanks to the Community Reinvestment Acts of the 70's & 90's.
So, the thugs in power need to tell us how people who can't afford one of the "green" cars now are going to afford one after they have a down payment thanks to the thug in charge? Just how will that work?

[Aldymac]

It never ceases to amase me about the liberals, once they have a response down pat thats all they know.

[bobnjersey]

[So, the thugs in power need to tell us how people who can't afford one of the "green" cars now are going to afford one after they have a down payment thanks to the thug in charge? Just how will that work? ]

it works like this:

- you crawl back in your hole
- with the next proposal you crawl back out of your hole
- you broadbrush everything to outline anyone who doesn't think like you as 'a thug'
- you crawl back in your hole
- repeat

[pepperwood2]

Car buyers who qualify received $3,500 or $4,500 towards a new car.

Typical Bureaucratic Scheme - Like owning your own home. All the future Cap & Trade, Sales Taxes, Closure charges, Etc. Sometimes the best deals or buys are the ones you don't make.

If they like though I can take my old clunker to my local Auto Dealership that we bailed out, they can give me the cash, I'll help to save the planet by keeping my paid off clunker. No sense polluting the environment refining & mining our planets resources to build new clunkers. I'll be happy to use the cash, after taxes on it, to help stimulate the BO economy. So Sad, The American Scheme they call it eh!

[TrickynWV]

My old 1996 is a clunker, but its paid for, AND my WV personal property taxes on it are about $16 a year. Compared to property taxes on a brand new truck valued at $30,000 which would be approximately $585 a year. THANKS BUT NO THANKS. I'm sick and tired of paying taxes on something that I have already bought with income that was taxed, sales taxed at the time of purchase (5%), and then to CONTINUED to be taxed for the privilege of owning it? Again, NO THANKS.

[PatDaddy67]

Hey, it's your state. Get involved and fix the problem. You need to talk to this guy: http://en.wikipedia.org/wiki/Tim_Eyman

[sjc_1]

In Germany it works because they have good paying union jobs. The auto union at VW and Mercedes is much stronger than the UAW. They pay well, so the workers can buy new cars.

[Newster1]

payasyougo
So if you are planning on buying a new car, first go out and buy an 84 v8 bronco or any of the large PU trucks that are for sale ragged out for less than $500. Then use that $500 vehicle to get a $3500-$4500 CARS cash bonus."

That little scam is EXACTLY why the program rules state you have to be the owner of that car for at least one YEAR, license and insure it for one year, and it has to be newer than '84 and driving.

That prevents idiots from trying to rip the program off by buying a used car cheap that doesnt even run and 2 days later trade it in.

WHat a stupid program anyway, get a whopping $3500 allowance on an over priced P.O.S. $25,000 car made by one of th US companies going or gone bankrupt, that is made to last at best 5 years, with paper thin sheet metal that rusts thru, recalls galore', needing expensive full coverage insurance... wow what a deal!

What I want them to explain is why my '82 civic got 38 MPG, and whose special head valve system even today meets stringent air pollution standards, and yet today- more than 25 years later we still build a car that barely gets 38 MPG if even that much!!

After 25 years we should be getting 100 MPG!!


So for a little work you can make 3-4k towards the purchase of that new vehicle that you were going to buy anyway.

[PatDaddy67]

I want to know why GM/Suzuki quit making the GEO Metro. I regularly got 40+ MPG on the highway. The car was easy and cheap to maintain and more efficient that the current hybrids. It really is a flippin' joke! The cars the need to be off the road are the smokin' oil burners that all the meth heads up here in North Idaho are driving around. The gas mileage of an 81 Honda may not be too bad, but the oil mileage is terrible.

[tmittelstaed]

The only thing that really sucks about the cash-4-clunkers program is that they should have only made the vouchers available for GM and Chrysler, so that those companies could more quickly become profitable and the government could then get rid of it's ownership in them.

[rbstrcklnd]

Is this a program where tax payer pay for someone's piece of sh*t so they can buy a new piece of sh*t?

[whitemale08]

...and Al Gore will still be chafeurred around in a Rolls Royce, just like the movie Children of Men where the chaffuer takes the main character in a Rolls Royce to the house of the 'Crimson King' admist the gunfire and chaos happening in the city of London all around him.

Global Warmers just love serfdom and fuedalism.

Instead of re-industrializing America, which is what brought mankind all of the civil ways of life and endless luxuries for everyone, the financiers/oligarchs just want that for themselves while everybody else lives like serfs.

[bobnjersey]

[Is this a program where tax payer pay for someone's piece of sh*t so they can buy a new piece of sh*t? ]

yea ... they spend $500 billion every year doing this ... it's called the defense budget.

get rid of the old helis so we can buy new helis ... get rid of the new tankers so we can buy new tankers ... get rid of the old jets so we can buy new jets.

[Bobthefirst]

@ bobnjersey

Defense spending isn't in question. Defense spending is a necessary part of maintaining the United States position in the world as a premier superpower. The fact is, when you stop improving your technology in the realm of defense, you become stagnant, eventually fall behind, and become vulnerable to attack on your own soil. Why, exactly, do you think that the world at large doesn't respect the United States but doesn't attempt to engage in a war on our soil, terrorist attacks excluded (since they are not sanctioned by any country's government)?

The Cash for Clunkers program is for private vehicles, and shouldn't be paid for with taxpayer dollars. Defense spending benefits everyone. Giving your neighbor $4,500 to buy a new car benefits your neighbor, and nobody else.