Tweet
It’s unlike anything the government has ever tried before and it will take some time to assess the results, but U.S. drivers now have the option to trade in their old gas-guzzling cars for more fuel-efficient vehicles. Instead of being handed a cup of burned coffee and a stale doughnut for the trade-in -- or worse, having to pay for the cost of the car to be scrapped -- the government is kicking in up to $4,500 toward the cost of a new car.
So, will it prime the pump effectively? Or is it just another boondoggle? A case of the government finding creative ways to blow a billion or so ($1 billion was spent in the programs first week) of tax payers hard-earned dollars?
As of Wednesday, August 5, the Senate finally agreed to infuse $2 billion more into the Cash for Clunkers program, which should last until Labor Day -- so get moving on your trade-in. Until you do, check out five things you may not know about the Car Allowance Rebate Systems (CARS -- who knew the government had a sense of humor?), better known as “Cash for Clunkers.”
1- Your clunker might not be clunky enough
In July 2003, Luis Grass of Havana converted a 1951 two-ton Chevy truck into a boat, loaded it with 11 of his family and friends and almost made the treacherous 90-mile journey across the Florida Strait to Miami. Cash for Clunkers would have done him no good, because it the truck was no longer a wheeled vehicle, and a ’51 Chevy wouldn’t have qualified as a clunker.
In order to qualify, your clunker must:
Those are just three of the 164 cars whose fuel efficiency was upgraded at the last minute by the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency. Before you go to the dealer, check out www.cars.gov to see if your trade-in qualifies.
2- We stole the idea for Cash for Clunkers from Germany
Germany launched its version of Cash for Clunkers, known there as abwrackprämie (“wreck debate”) in February of this year. In the month of March, car sales in Germany were up 40% over the previous year prompting the government to extend the program through to the end of 2009. It’s earlier in our process, but so far Cash for Clunkers has been off to a similar hot start.
If Germany was hoping to give a boost to its domestic auto industry, then the results are a little disconcerting. So far the big winner has been Ford, with sales of its Fusion, Ka and Fiesta up 56% compared to a year ago. Results for BMW and Mercedes, with their focus on higher-end luxury models, haven’t been so great. This is one of the reasons American car makers lobbied hard to water down the mpg requirements for new purchases, fearing that the big benefactors would be those gas-sipping, decidedly nondomestic Hondas, Toyotas and Nissans.
3- Both democrats and republicans hate the program
The original sponsors of the bill were Senators Dianne Feinstein of California, Susan Collins of Maine and Charles Schumer of New York. The original focus was on reducing carbon emissions. But the House of Representatives (with the help of the auto industry lobby) watered down fuel-efficiency standards so much that Feinstein and Collins wrote an editorial in The Wall Street Journal titled “Handouts for Hummers.” They argued that their original bill would have significantly reduced greenhouse gases by saving 32% more oil than the final bill.
The original bill also allowed consumers to buy fuel-efficient used vehicles; giving lower-income people the chance to participate. If making the air cleaner was the goal, the two wrote, why subsidize a new Hummer H3T (16 mpg) or a new Dodge Ram 1500 4x4 truck (15 mpg), but not a two-year-old Ford Focus (27 mpg) or used Chevy Colorado (20 mpg)?
On the right side of the aisle, Senator John McCain opposed the initial bill and threatened to filibuster the additional $2 billion needed to keep the program running. His main objection is the same as that of most other conservative politicians: It’s a waste of taxpayer money and a case of the government sticking its nose where it doesn’t belong.
Republican Senator Jim DeMint of South Carolina also chimed in on FOX News Sunday. “My children and grandchildren are going to have to pay for these cars and we’re helping auto dealers while there are thousands of other small businesses that aren’t getting the help,” said the senator. “The role of the federal government is not to run the used car business.”
4- Latino celebrities love the program
Cristian de la Fuente (Dancing with the Stars, In Plain Sight) and Angelica Val (Ugly Betty -- OK, one episode of Ugly Betty) have signed up to endorse Cash for Clunkers. The two are better known in Spanish speaking communities and the government thought the program would play well to Latinos.
“The people that have these cars that use a lot of gas are Latinos, and I can get this message across to them,” de la Fuente said in an interview with TV Guide. “Many times, we don’t have the money to buy a new car. If they can get some cash out of it for a newer and better car, it’s a great opportunity.”
It might be a great opportunity, but people still have to come up with the extra $10,000 (at least) to buy even the cheapest new car on the lots today. (Nissan advertises its Versa at $9,990 but that’s without AC, floor mats, radio, etc.) Many people who drive clunkers today, Latino or otherwise, do so because they can’t get credit or, if they can, can’t afford a car payment of any size.
5- Clunkers get sentenced to death by sodium silicate
So what’s the best way to kill a clunker? The NHTSA actually wrestled with this question. One idea was to run the engine without oil. Another was to drill a hole through the engine block. The final verdict: Drain the car’s oil and pour in a sodium silicate solution. Then run the engine until it seizes. The NHTSA refers dealers to a website called www.cheap-chemicals.com where you can by a quart of the stuff for $21.48. Videos have popped up on the internet of dealers delivering the sodium silicate death blow. The cars actually look like they're gasping for their last breaths as they fight to stay alive.
Enforcement may prove to be a challenge, however. Investigative reporters in Germany managed to sell a car that was supposed to be scrapped to Poland. The car was then exported to Africa and ended up back in Berlin. So, which government agency in the U.S. is making absolutely sure that the clunker you trade in doesn’t end up three states away on a used car lot that sells vehicles to illegal immigrants at usurious interest rates?
So, will it prime the pump effectively? Or is it just another boondoggle? A case of the government finding creative ways to blow a billion or so ($1 billion was spent in the programs first week) of tax payers hard-earned dollars?
As of Wednesday, August 5, the Senate finally agreed to infuse $2 billion more into the Cash for Clunkers program, which should last until Labor Day -- so get moving on your trade-in. Until you do, check out five things you may not know about the Car Allowance Rebate Systems (CARS -- who knew the government had a sense of humor?), better known as “Cash for Clunkers.”
1- Your clunker might not be clunky enough
In July 2003, Luis Grass of Havana converted a 1951 two-ton Chevy truck into a boat, loaded it with 11 of his family and friends and almost made the treacherous 90-mile journey across the Florida Strait to Miami. Cash for Clunkers would have done him no good, because it the truck was no longer a wheeled vehicle, and a ’51 Chevy wouldn’t have qualified as a clunker.
In order to qualify, your clunker must:
- Have been manufactured less than 25 years ago (that eliminates Mr. Grass’ Chevy).
- Must have a combined city/highway fuel economy of 18 miles per gallon or less.
- Must be in drivable condition.
- Must have been continuously owned and registered to the same owner for the full year.
Those are just three of the 164 cars whose fuel efficiency was upgraded at the last minute by the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency. Before you go to the dealer, check out www.cars.gov to see if your trade-in qualifies.
2- We stole the idea for Cash for Clunkers from Germany
Germany launched its version of Cash for Clunkers, known there as abwrackprämie (“wreck debate”) in February of this year. In the month of March, car sales in Germany were up 40% over the previous year prompting the government to extend the program through to the end of 2009. It’s earlier in our process, but so far Cash for Clunkers has been off to a similar hot start.
If Germany was hoping to give a boost to its domestic auto industry, then the results are a little disconcerting. So far the big winner has been Ford, with sales of its Fusion, Ka and Fiesta up 56% compared to a year ago. Results for BMW and Mercedes, with their focus on higher-end luxury models, haven’t been so great. This is one of the reasons American car makers lobbied hard to water down the mpg requirements for new purchases, fearing that the big benefactors would be those gas-sipping, decidedly nondomestic Hondas, Toyotas and Nissans.
3- Both democrats and republicans hate the program
The original sponsors of the bill were Senators Dianne Feinstein of California, Susan Collins of Maine and Charles Schumer of New York. The original focus was on reducing carbon emissions. But the House of Representatives (with the help of the auto industry lobby) watered down fuel-efficiency standards so much that Feinstein and Collins wrote an editorial in The Wall Street Journal titled “Handouts for Hummers.” They argued that their original bill would have significantly reduced greenhouse gases by saving 32% more oil than the final bill.
The original bill also allowed consumers to buy fuel-efficient used vehicles; giving lower-income people the chance to participate. If making the air cleaner was the goal, the two wrote, why subsidize a new Hummer H3T (16 mpg) or a new Dodge Ram 1500 4x4 truck (15 mpg), but not a two-year-old Ford Focus (27 mpg) or used Chevy Colorado (20 mpg)?
On the right side of the aisle, Senator John McCain opposed the initial bill and threatened to filibuster the additional $2 billion needed to keep the program running. His main objection is the same as that of most other conservative politicians: It’s a waste of taxpayer money and a case of the government sticking its nose where it doesn’t belong.
Republican Senator Jim DeMint of South Carolina also chimed in on FOX News Sunday. “My children and grandchildren are going to have to pay for these cars and we’re helping auto dealers while there are thousands of other small businesses that aren’t getting the help,” said the senator. “The role of the federal government is not to run the used car business.”
4- Latino celebrities love the program
Cristian de la Fuente (Dancing with the Stars, In Plain Sight) and Angelica Val (Ugly Betty -- OK, one episode of Ugly Betty) have signed up to endorse Cash for Clunkers. The two are better known in Spanish speaking communities and the government thought the program would play well to Latinos.
“The people that have these cars that use a lot of gas are Latinos, and I can get this message across to them,” de la Fuente said in an interview with TV Guide. “Many times, we don’t have the money to buy a new car. If they can get some cash out of it for a newer and better car, it’s a great opportunity.”
It might be a great opportunity, but people still have to come up with the extra $10,000 (at least) to buy even the cheapest new car on the lots today. (Nissan advertises its Versa at $9,990 but that’s without AC, floor mats, radio, etc.) Many people who drive clunkers today, Latino or otherwise, do so because they can’t get credit or, if they can, can’t afford a car payment of any size.
5- Clunkers get sentenced to death by sodium silicate
So what’s the best way to kill a clunker? The NHTSA actually wrestled with this question. One idea was to run the engine without oil. Another was to drill a hole through the engine block. The final verdict: Drain the car’s oil and pour in a sodium silicate solution. Then run the engine until it seizes. The NHTSA refers dealers to a website called www.cheap-chemicals.com where you can by a quart of the stuff for $21.48. Videos have popped up on the internet of dealers delivering the sodium silicate death blow. The cars actually look like they're gasping for their last breaths as they fight to stay alive.
Enforcement may prove to be a challenge, however. Investigative reporters in Germany managed to sell a car that was supposed to be scrapped to Poland. The car was then exported to Africa and ended up back in Berlin. So, which government agency in the U.S. is making absolutely sure that the clunker you trade in doesn’t end up three states away on a used car lot that sells vehicles to illegal immigrants at usurious interest rates?
Comment