November 07, 2009
What's Inside:
‘Cash for Clunkers’: Boost or bane?
Photo by Jessica Stewart / St. Joseph News-Press / Purchase this photo
Dale Bryan, owner of Bryan Motors, places a temporary tag in a car he sold Saturday afternoon. Mr. Bryan says the Car Allowance Rebate System, which goes into effect July 1, will make it harder for him to buy cars to sell on his lot in north St. Joseph.
Out with the old and in with the new. Only if the new has better mileage, that is.
The “Cash for Clunkers” program, now called the Car Allowance Rebate System, was signed into law on Thursday. Essentially, by trading in a vehicle for a new one that is more fuel efficient, the program will pay consumers up to $4,500 in credit, depending on how much better mileage the new vehicle gets.
For example, a new car that is four miles per gallon better than the old is eligible for a $3,500 voucher. If the new car gets 10 mpg better, it may be worth the maximum $4,500 voucher.
For SUVS, pickups or minivans, a new car that gets two mpg better gets a $3,000 voucher, and $4,500 if five mpg better.
“I think it’s a great program, and it’ll help the environment,” said Mike Westcott, general manager of Cecil Myers Mitsubishi. “I think it could give us a few more deals that we weren’t looking for.”
Regulations to determine what vehicles qualify for the credit can be found at www.cars.gov, a Web site put together by the National Highway Traffic Safety Administration, which is charged with overseeing the program.
In brief, your vehicle may qualify for credit if it is a 1984 model or newer; if it gets 18 mpg or less; and if it is registered, drivable and insured by the same owner for the past year.
Tony Franklin, managing partner of Anderson Ford Lincoln Mercury, says he appreciates the positive step it’s taking to get older cars off the roads and to help the environment. He says it will be successful because the regulations are not unattainable.
“We’ve had requests, a fact-finding mission for it by customers. They’re already aware of it,” Mr. Franklin said. “We’ve had some customers who aren’t going to do anything until they hear more about it. They’re excited.”
Hoping to jump-start car sales, automakers, unions and dealers lobbied heavily for the plan, patterned after successful programs in Germany, Britain and other European countries. Roger Auxier, owner of Car City in St. Joseph, said he believes the program also will improve the auto dealer’s business.
“From our point of view, it certainly can provide a benefit, both for us and customers out there. There’s no question about that,” he said.
But Mr. Auxier is a realist.
“It won’t be all positive for everyone. It’s a trade-off,” he said.
These three dealerships, which sell both new and used cars, all agreed that the legislation’s stipulation about traded-in cars being destroyed will not have an effect on their used car sales. They say the age and quality of those cars would not be suitable for resale anyway. But support for the legislation ends when it comes to strictly used car dealers.
“It’s going to make it harder to buy the kinds of cars I sell,” said Dale Bryan of Bryan Motors. “They have parts that are valuable to the used car market. But nothing can be salvaged.”
Mr. Bryan explained that many of the people he has talked to are not in favor of the program, and that it won’t benefit low-income families who own the types of vehicles qualified for trade-in.
“Most of the people that have that type of car aren’t going to be able to make the payments on their new car,” he said.
Used car dealers are not the only ones opposed to the program. Business leaders have said that the program is too limited, securing the sales of only about 250,000 cars, and will disproportionately benefit foreign cars.
Some environmentalists believe the program will divert attention and funding from public transportation, prematurely take functioning cars off the road, and with the right trade-in, allow tax deductions for larger passenger vehicles, including the Hummer or Ford Expedition.
Regardless, the CARS program will begin Wednesday and continue until Nov. 1, or when the $1 billion allocated to pay for the program runs out.
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My guess is that dealers will figure out a way to take that $3,000 out of your pocket and put it into theirs.
I have a question; when we get all these fuel effecient cars on the roads, where is the money going to come from to pay for the roads? Are they going to double the taxes on gas? I have not heard this addressed and just wonder.
BANE. i am keeping my 66 dart and the 67 chevy truck.
"“It’s going to make it harder to buy the kinds of cars I sell,” said Dale Bryan of Bryan Motors. “They have parts that are valuable to the used car market. But nothing can be salvaged.”"
I guess we're supposed to pay factory prices for new parts as opposed to going down to the junkyard and tearing out replacement parts we need. If I need a new passenger seat for my car, I'd have to pay $300 to Government Motors instead of the $20 I'd pay the guy at the junkyard.
I hope when it runs out, they let it run out. But like most government programs, they'll probably just throw more money at it.
Just another band-aid. What a joke!
i too am an avid restorer of old car,s. it wouldn,t affect me but it will cut down on newer car part,s. i dont think there will be that many people taking advantage of the program except the people able to buy a new car anyway and they were going to replace the car they were driving anyway. 1 billion doesent go that far nation wide.im not going to run out there and buy new anytime soon because of this plan.someone really thought hard about this one.
The answer to everything is to go deeper in debt, right??? It just Dictator Obama forcing more money at the banks and giving it to the people who will use it for their own gain and make them more corrupt.
How is that hopey changey thing workin out for you, now?
Too funny, I would really love to trade my 10MPG POS van in on anything - but I need a good job better than some incentive I can not even use -
I need a payment like I need another hole in my head, and who is going to finance someone without a job?
If the carbon tax passes the senate this week, might as well kiss my house and everything else goodbye....
Anyone else finding it hard to get by, and the general feeling I am getting is that we are just screwed and no one cares?
that sound like you are prejudice michaelh , you dont have to agree with what he come,s up with but he is your president! nothing you can do about that! just accept it and move on. i heard once that they were going to start scrapping all cars in junk yards older then 10 years so there wont be car parts for old cars. well, they did this in ca.. just wait, with all your additudes it will happen here too.p.s. you wont get any help dragging anyone from me.
Donald, NEWSFLASH...just because someone doesn't agree with his policies doesn't make them prejudice. I am fairly sure that your help won't be needed come three years from now with 17% inflation, skyrocketing energy bills, the government dictating when and what type of health care you can get, etc, etc, etc. I am quite sure that many who got on the "hope and change" party bus will be hoping for a change just as much as the rest of us working stiffs.
well i have never grown on anybody, i raised two daughters does that count? im sory, i dont understand you additude toward your president. i understand your contempt for your guy loosing but you are going to have to deal with it any way you can. i would take advantage of this program if i didnt travel for a living.i wouldn,t get to drive the sky enough for owning it now but if they give me this option in say three years i will do it. it would make sence to save three grand for nothing. after all it is your and my tax that make,s this program possible.
The worst part of this cash for clunkers is that Obama borrowed the money from China to fund this little program.
A Federal gas tax has already made it through the house and now it is in the senate to be voted on. If you don't want added taxes then you need to contact your senator (McCaskill) and tell them to vote against the "Cap and Trade" bill now circulating through the senate. Obama has already said that he intends to sign it. It has a lot of other new taxes in it that are going to devastate the economy even more. He promised that people making under $250k would not see a tax increase but this bill does just the opposite by saddling us with new taxes slipped in the back door.