Friday, August 21, 2009

Cash for Clunkers ends again

WASHINGTON (AP) - The Obama administration plans to end the popular $3 billion Cash for Clunkers program on Monday, giving car shoppers a few more days to take advantage of big government incentives.

The Transportation Department said Thursday the government will wind down the program on Monday at 8 p.m. EDT. Car buyers can receive rebates of $3,500 or $4,500 for trading in older vehicles for new, more fuel-efficient models.

"It's been a thrill to be part of the best economic news story in America," Secretary Ray LaHood said in a statement. "Now we are working toward an orderly wind down of this very popular program."

Through Thursday, auto dealers have made deals worth $1.9 billion and are on pace to exhaust the program's $3 billion in early September. The incentives have generated more than 457,000 vehicle sales. Administration officials said they have reviewed nearly 40 percent of the transactions and have already paid out $145 million to dealers....

I have always wondered about the true success of Cash for Clunkers. I think Washington was too quick to call this program a success without first checking for fraud. It just strikes me as funny that under this economy, with so many Americans fretting about their jobs, that so many of them would rush out and buy new cars with payment schedules no less.

Something tells me months from now we are going to hear that there was some big scam going on. I know if I owned a dealership I would have found Cash for Clunkers an excellent way to move new stock and rid myself of worthless trade-ins.

Here is what I would have done. I would have taken all my crumby trade-ins that were worth less than $4,500 and use them as clunkers to purchase some of my new inventory. I would have then taken those new cars I purchased and put them on the used car side with a hefty $3,000 to $4,000 discount off the sticker price. In doing so, I would have improved my used car inventory quality, rid myself of hard to sell clunkers and improved my new car sales figures by decreasing my new car inventory. Not to mention I would be picking up anywhere from $500 to $1,500 per car in the process.

Time will tell if there were real sales going on or if some enterprising individuals found a way to game the system. My money is on gaming the system.

Via Breitbart

7 comments:

One Ticked Chick said...

And the big winner in the Cash for Clunkers rebate program is ......TOYOTA!

Cars4Charities said...

Charities are very happy c4c is ending becuase of its negative effect on car donations.

Angie Lee said...

I hadn't thought about it from that angle, but I can see how some "enterprising" dealer could make some money on this.

My worry is that in a few months we'll be hearing the whining about another bailout needed to help the car buyers pay for the cars they can no longer afford to pay for (along with their mortgages) when they lose their jobs.

Clifton B said...

One Ticked Chick:

Yes that is another bad consequence for Cash 4 Clunkers that no one seem to have figured out at the programs inception. Nor did they bother to remedy that after it was reauthorized.

Clifton B said...

cars4charities:

No doubt. I also bet anyone in need of a very inexpensive used car is also happy c4c is over.

Clifton B said...

Angie Lee:

My worry is that in a few months we'll be hearing the whining about another bailout needed to help the car buyers pay for the cars they can no longer afford to pay for (along with their mortgages) when they lose their jobs.


Excellent thought. I bet you are right too!

conservative brother said...

Cash for Clunkers was a great success!! The only people that were negatively impacted it by it was were the "working poor", "parts recyclers", "used car dealers auctions","charities that relied on donated used cars". The number one car manufacture that made out best under this government program was Toyota. So the government pumped an insane amount of public money into GM and Chrysler, yet they ended up helping the foreign competition.

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