Feds To Offer Cash For Your Clunker 740
coondoggie sends along a NetworkWorld piece that begins, "The government... wants to motivate you to get rid of your clunker of a car for the good of the country (and the moribund car industry). A 'Cash for Clunkers' measure introduced this week by three US Senators, two Democrats and a Republican, would set up a national voucher program to encourage drivers to voluntarily trade in their older, less fuel-efficient car, truck, or SUV for a car that gets better gas mileage. Should the bill pass, the program would pay out a credit of $2,500 to $4,500 for drivers who turn in fuel-inefficient vehicles to be scrapped and purchase a more fuel-efficient vehicle."
Busses (Score:1, Interesting)
They need to sub out the city buses instead, those things are a pollution nightmare
My old car is fine (Score:3, Interesting)
Sounds like what we have in Singapore (Score:5, Interesting)
To encourage car owners to scrap cars before 10 years, we have
1. Road tax increases for cars > 10 years old [lta.gov.sg]
2. Rebates for cars unregistered before 10 years [onemotoring.com.sg]
The majority of the cars on the roads here are 10 years old. Cars unregistered are either scrapped or exported to another country for resale.
Re:Same crappy idea (Score:3, Interesting)
For a nine year old car I'd be happy to get US$2500. Granted, Americans drive more. I live in Los Angeles where most people drive 20+ mi each way to work every day--never mind running errands, shopping, taking kids to school, etc. My five year old car has 175,000 miles on it.
Not environmental costs, think cost of lost lives (Score:3, Interesting)
The real cost is that many old vehicles aren't safe to drive. Steering, brakes, crash test ratings, restraints, airbags, etc are all much better today than they were 10, 15, 20 years ago. In addition to fatal accidents, there are many accidents with hospitalizations or permanent injuries, or even just property damage to other vehicles.
We're talking about on the order of $300 billion a year in economic losses from auto crashes. I don't know what percentage of that is due to old vehicles that would be traded in, but if 1% of it is, that's enough to justify taking a million of these vehicles off the road.
Re:What environmental cost to build a new car? (Score:5, Interesting)
Here in BC, they have a ScrapIt program, where you 'sell' your car to a scrapyard, and in exchange you get either a big discount on a bike, bus passes for a number of months, or a relatively small amount of cash. So it encourages switching/using a alternate form of transportation.
Of course, when I put my car into ScrapIt, I resold the bus passes and bought another car...
Re:Won't Help Big Three (Score:2, Interesting)
As for my car, it's a 2000 Mercury Cougar V6 but somehow it gets 28 on the highway (they say that but it really gets 30-31 at 70 MPH) so I don't think it'd qualify. Sad that Ford could make an automatic V6 with that good of gas mileage 9 years ago and just decided to make worse cars.
Re:The environmental cost? (Score:5, Interesting)
Re:They pay more to scrap fuel efficient cars (Score:5, Interesting)
>>If this was about reducing emissions, they would pay more to get older, dirtier, and less fuel efficient cars off the road.
The sad fact is, older (10+ year old cars) are at least, if not more, fuel-efficient than modern cars. I drive a '98 Buick Regal. The equivalent 2009 model has 1MPG less efficiency than my model. Let alone cars like the early 90s Civic hatchbacks, which still have MPGs which are only reached, if at all, by hybrids nowadays. Do we really want to remove a 94 Civic from the road and replace it with a lower-MPG modern Civic?
Re:What environmental cost to build a new car? (Score:3, Interesting)
Speaking of which, that's something I see and notice quite a lot in US-made films and TV drama - people regularly driving after being at a bar drinking for (presumably) some time, and rarely is any comment made about them doing it ("Gremlins" is about the only example I can think of that did). Is this really fairly accepted practice in the US, or just artistic licence?
Re:Won't Help Big Three (Score:5, Interesting)
Such a scheme worked here in Ireland, but it was about the era of the dot-com boom, and also the start of cheap credit (and we all know where that led...)
However, it has meant that once and for all we got rid of all the bangers. This allows the government to get away with bringing in a "National Car Test" to ensure cars are a certain operational standard. As a result, most cars on the road are no older than 10 years. The few "bangers" nowadays are maybe 15 years old and they have at least passed the NCT.
Re:Limited government (Score:3, Interesting)
Government is there to govern.
Bozo Economics (Score:4, Interesting)
This reminds me of a program the police had in California to reduce guns by offering several hundred bucks, no questions asked, for each firearm turned in by a citizen. People were going out to Walmart, buying all the cheapest rifles in stock, and exchanging them for bundles of cash. I think the program went bankrupt (having burned through all the taxpayer money available) without actually reducing the number of weapons owned.
Re:Won't Help Big Three (Score:5, Interesting)
I'm also afraid a little over this required scrap clause. It might cause us to lose more of some classic cars that can and SHOULD be restored.
Someone might have what is currently a 'junker' GTO or Camaro...and with this, the car is scrapped, and a piece of history is lost.
If they have to do this law, maybe they can make some provisions that antique and historically valuable cars can be saved if they are to be restored.
Re:Won't Help Big Three (Score:3, Interesting)
And why should we help them? They REFUSE to bring in efficient cars, choosing, instead, to market them in the UK.
Probably because their North American factories are set up to produce the gas guzzlers they decided on a few years back and they can't change overnight. The cars sold in the UK- and the rest of Europe- are mainly made in the EU, so importing them would effectively waste their North American capacity (and put lots of you guys out of work).
Also, EU-made cars would face an economic hurdle since they came from outside NAFTA (the opposite is also true, which is one reason why there are comparatively few North American sold within the EU; South-East Asian produced models are- I suspect- cheap enough to overcome that hurdle).
The third issue is that Americans generally have their own, different taste in cars with European models doing less well. (Even when a European model does decently in the US, it's usually in a lower class, e.g. what would be considered a medium-sized family car in Europe would be considered a small car in the US). Although the desire for increased energy efficiency brings them closer together, I still think they'd need changes.
Part of the difference is taste, but it's also motivated by driving conditions; e.g. US travel generally involves longer distances, and your roads are much wider and straighter than most of those in Europe.
Re:Broken window fallacy (Score:3, Interesting)
If bad cars were not taken off the market and crushed. If emission control laws and safety laws were not enforced. If people were not motivated to buy cleaner more efficient cars (i.e. If now that gas is temporarily low, all those folks went out and buy SUVs). Then, yes you are correct.
This can be avoided by enforcing existing emission and safety regulations; Ensuring all cars in this program are crushed, dismantled, recycled, or in some other way really removed from the market; and keeping a price floor on gasoline by way of federal taxes.
Re:What environmental cost to build a new car? (Score:1, Interesting)
Yeah, we do have that here. We call it personal responsibility. Basically the same as yours except that the government has to catch us in the act rather than all of us standing in line to prove that we're not doing anything wrong.
Re:Won't Help Big Three (Score:3, Interesting)
I disagree. You are looking at too small of a picture here. People who drive junkers do so for a reason. Either they can't afford it or don't want to afford a new vehicle. There is a good used car business simply because they don't purchase new cars and don't want the expense of payments.
What you are doing is trying to get people to invest in loans, now they have a financial burden making them less resilient to future financial shifts. You are also shifting their financial expenditures from somewhere to the Automotive industry. It's a transfer of money, not a creation of wealth.
If you really want to stimulate the economy then it benefit to refinance loans prior to default. I would love to refinance my car and house, but I can't afford the refinance charges. So now I have thousands locked up in payments on older goods that are unavailable for new purchases.
Already works... (Score:3, Interesting)
For years in Portugal...
And it's a very good program.
Ford sells more fuel efficient models in europe (Score:5, Interesting)
Foreign makes have better fuel efficiency and more variety to choose from.
Not really (...)
Actually, pretty much all companies that operate in both US and EU markets have different models for each market, with a BIG difference in fuel efficiency. This includes american companies... At least, Ford has a decent market share in Europe and the cars it sells here are "european" cars, meaning that they go by european standards of size and fuel-efficiency... But even the asian car-makers sell huge boxes in the US that nobody would buy here in europe.
By the way, last I read the auto fleet in europe is currently about TWICE more fuel-efficient than the US fleet... although the numbers themselves are not that impressive. I think it's about 14 vs 7 km/l.
Re:Yet another case of "screw the responsible peop (Score:1, Interesting)
Responsibility is a trait held by the minority. That said, responsible people can be very hard to leverage. In a field full of highly-responsive, skittish bunnies, they are slow to chase carrots, and equally slow to heed looming sticks. They can be massively frustrating; there's a lot of wealth and energy tied up there, which never seems to be available for the rest of the field (for reasons all too apparent to the responsible person).
Here's the question, and do not take it the wrong way: what have you been doing with the money you saved on the condo and your not-brand-new car? That's 6 years in which you've had more liquid assets to your name than your same-salaried co-worker who bought the colonial two-story and the sports car. Theoretically, you should have earnings on your savings, where the co-worker should have a fistful of depreciated assets. Did you buy some education for yourself or your kids? Stocks/funds? Did you start a business (however small or supplementary)? Were you able to work less overtime and spend more time with family, pursuing your own interests, or working on meaningful societal projects?
If you can't account for where your savings went, you're only being halfway responsible. If you can, then you're just grousing. Use your keen senses to find opportunities that the new climate presents and use your larger liquid assets to capitalize on all the dumb bunnies that are frantically chasing government handouts. You want a piece of this pie? Get ready to sell that Echo. If the bill passes, there will be a stampede of clunker-deprived morons running around with their freshly-stuffed wallets in their hands reckoning they've just been handed their meal ticket. Ka-ching! You've just earned your next modest, down-to-earth vehicle. Now how hard was that?
It is easier to be stupid than to be smart, right? If smart living was easy, it wouldn't be called "smart." When you take responsibility for what you do, you're taking your future into your own hands. The government's job is to keep the irresponsible people from driving the whole endeavor off a cliff. The responsible people are assumed to be taking care of themselves, finding their own methods, and advancing through society more quickly than the silly rabbits.
Re:Won't Help Big Three (Score:4, Interesting)
No, he's right. Take my example. I'm in the market for a new(er) car, but I'm not going to go out and take out a loan for the whole sum. But, if I had a somewhat sizeable lump of money, taking out a loan is more reasonable.
I can afford taking a loan for 100% of the car, but I just plain *don't want to*. A loan for 60-70% of the car OTOH, makes a lot more sense to me.
Re:Won't Help Big Three (Score:3, Interesting)
>> My car gets 86mpg on the highway.
I call bullshit. What car? What circumstances?
One of the most fuel efficient cars in Europe is the VW Polo diesel, which gets 33/50 USMPG city/highway.
Then there's the VW Lupo 3L special edition, which gets 78MPG. So even with that you would have to do some hypermiling to get to 86.
Re:punishing the responsible people (Score:1, Interesting)
"I thought Idiocracy was a fictional movie, not a crystal ball into the future."
Words cannot express how much I wish you were correct. But
society in the US is currently in a de-evolutionary spiral, and it's going to continue to get worse until government steps in and takes drastic measures ( and by the time they do this, it will be so bad that the US may never recover ).
See the page below for another take on all this :
http://en.wikipedia.org/wiki/The_Marching_Morons
Re:6 MPG --- and 18 MPG (Score:2, Interesting)
Which of these situations do you save the LEST amount of fuel in 100 miles of driving?
a) replacing 10mpg with 11mpg
b) replacing 17mpg with 25mpg
c) replacing 25mpg with 33mpg
d) replacing 33mpg with 50mpg
If you picked a you are among those mislead by mpg numbers. The real answer: it is a trick question, they are all the about the same. Replacing your 10mpg gas hogging smog-mobile with an 11mpg gas-hogging smog-mobile saves just as much as replacing your fuel-conscious Honda Civic with a Toyota Prius.
Here is why, the fuel used per 10,000 miles looks like this:
a) from 1000 gallons to 900 gallons for 10,000 miles
b) from 500 gallons to 400 gallons for 10,000 miles
c) from 400 gallons to 300 gallons for 10,000 miles
d) from 300 gallons to 200 gallons for 10,000 miles
Each replacement case saves 100 gallons for 10,000 miles of driving. And no, you can't go yelling and screaming that you have to replace a 17mpg minivan with a 50mpg Prius. The Minivan seats 7 and Prius barely sits 5. It just doesn't have space for a family of 5 plus company to use one vehicle, and replacing one van with two compact hybrids is out of the question.
So a lot of people seem to not be reading the provisions of the bill, so let me sum it up real quick:
-Your old "junker" car must get less than 18mpg as rated by the manufacturer
-It must be drivable and have been registered for at least 120 days.
-The amount of money you get depends on the age of the car "junked", and whether you are buying a new car or used car.
-You can opt for transit fare credit instead of the amount of money for a used car.
The maximum rebate is $4500 if you trade in a car newer than 2002 to buy a new car, and $3000 for a used car purchase.
For 1999-2001 vehicles you get $3000 for a new, and $2000 for a used car purchase.
The "new car" rebate drops to $2000 if you trade in a car that is 1998 or older, and to $1500 for a used car.
In my case the $1500 for a used car when trading in a 1998 or older is where I'd fall. I certainly won't be buying a new car, and my "junker" is a 1989 Dodge Caravan, 3.0L V6 that gets 18mpg mixed driving. Hopefully it is a "less than or equal to 18mpg" or even this vehicle is disqualified.
That is pretty substantial, considering the blue-book value for the vehicle is only around $1000, and trade-in value even less.
What this bill really misses though is the "drivable" car that is polluting because of its poor condition, NOT its age. I also have a 1987 Honda CRX, 1.5L I4, that "only" gets 30mpg. It should be getting close to 40mpg, but the engine was abused by its owners. I am SURE that even though the CRX still gets much better fuel economy than the Dodge Caravan, the blue cloud of smoke trailing my CRX is polluting MUCH more. And it can't qualify on the rebate, even though it is "drivable" and should be taken off the road, but I live in a state where there is no emissions testing requirement.
I should point out that our primary vehicle is a 4-door 1996 Acura Integra, it gets around 26mpg and serves our family well with no safety issues. With both anti-lock brakes and air bags I fail to see the reasoning that 10+ year old cars are somehow inherently "unsafe" or "unnecessarily polluting" as it is going on 13 years old now.
I have pretty mixed feelings on the bill, it has good intentions, but I feel it misses some key points.
Re:Won't Help Big Three (Score:2, Interesting)
Laws make inefficiency (Score:5, Interesting)
You're absolutely right. But it gets even worse. Here's a stupid situation I could hypothetically be in soon: I drive an old car that is probably qualified to be traded in under this bill. Suppose it breaks down, and the repairs would cost $1000. The car isn't really worth that, so without this bill, I probably would have junked it. WITH this bill, since the "Cash for Clunkers" program requires the car to be in working condition, it's now to my advantage to get it repaired, trade it in for my $2500-$4000 federal money, and then it gets sent to the junkyard anyway. Building things just to destroy them - THAT is government destroying an economy.
Re:Won't Help Big Three (Score:3, Interesting)
If they don't spend, the economy craters even more and we enter a depression
Mr. Hoover demonstrated that this isn't actually the case.
When the economy is in the tank, the feds need to run up the debt. Public spending replaces the private spending that would not happen, thus stabilizing the economy. When boom times return, the government should slash it's spending to pay back the debt run up during the downturn, since private spending is plenty high to keep the economy going.
Where the US government has failed recently is the fetish for tax cuts above all else, resulting in running deficits during the boom times, instead of using the boom times to 'save'/pay off debt for the hard times.
Re:Won't Help Big Three (Score:3, Interesting)
This rises a question: why do cars cost so much ? I see them competing on looks, "sportiness", extra equipment etc. but never on price. How much would a car designed to be cheap (which, obviously, includes being energy efficient) with nothing extra (not even a radio) cost ?
That might be something for auto makers to consider.