Why Cash For Clunkers Was Doomed
Cash For Clunkers never had a chance. It was smothered at birth by a pile of paperwork and ever-changing rules, as this dealership worker reveals, using a combination of the words "cluster" and "fudge," except, of course, not fudge.
AndYaDontStop, who took the photo used in this post, writes:
The other bitch in this whole thing is that the government has put $1 billion into this program, which when divided mathematically into the average rebate and the number of dealers participating nationwide, gives each dealer about 12 vouchers to use. We had, at one time, 80-100 people on our list of interested customers. Can you say clusterf***?
Guess a billion doesn't buy you much these days. It's kind of like the Denny's free grand slam fiasco all over again. When will people realize that giving away money and free stuff will always be much more popular than expected when you do it in a 10% unemployment economy?
RELATED: Brakes put on 'cash for clunkers' plan [USAToday]
PREVIOUSLY: Cash For Clunkers Runs Dry In 4 Days
(Photo: AndYaDontStop)
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Actually about a 16% unemployment economy & some % underemployed. Remember, when your unemployment benefits run out or you give up from frustration, you are no longer unemployed, just screwed.
Also, what does "destroy the engine" mean? Take a flamethrower to it? Put it in an industrial-strength shredder? Blend it? :P
Great plan. Swiss fucking watch.
I'm reading that it's kind of a "rumor" at this point, with no official announcement of the suspension of the program... While the article is definitely shocking, I think a little more caution should be exercised at this point until there is an official announcement.
My husband is drowning in 'cash for clunkers' deals right now. he hasn't called to say he's free. Granted he hasn't called to say he's quit either....
From the USA Today link:
"Dealers loved the extra sales, but some were already getting cold feet about the deals because of the difficulty in processing them."
We're talking about the same government that could potentially run our health care system one day. Issues like this when people are drooling over a new car are bad enough- can you imagine them when people need medical care?
Unfortunately, some dealers will probably have to warehouse the clunkers until the paperwork is approved. It would be too expensive to destroy an engine and then find out ("Whoops") that the government made a mistake and didn't approve the trade.
I really don't see why anyone thinks this is a failure. The government announced that the cap was $1 billion and it seems wildly successful so far. My read of the press is that they are just suspending the program until they see how close they are to $1 billion.
@DaveDidNotPay: As opposed to the medical care that they aren't getting now at all because it costs so friggin much?
@wvFrugan: You seem to be combining the % of people unemployeed and the # of people claiming unemployment. The Bureau of Labor Statistics # takes into account people who are no longer elegible for unemployment benifits, as long as they are actively searching for employment.
Information on unemployment from [useconomy.about.com] :
The Bureau of Labor Statistics (BLS) defines unemployment as people who do not have a job, have actively looked for work in the past four weeks, and are currently available for work. It also includes people who were temporarily laid off and are waiting to be called back to that job. It doesn't count the jobless who:
* Didn't look for a job in the past four weeks.
* Are so discouraged that they have stopped looking for a job.
What else do you expect from idiotic wasteful deficit spending other than fail?
@DaveDidNotPay: I'd rather fill out a whole lot of paperwork to get health care than continue living without it altogether like I am now...
@DaveDidNotPay:
"We're talking about the same government that could potentially run our health care system one day. Issues like this when people are drooling over a new car are bad enough- can you imagine them when people need medical care?"
Ah yeah, sure. Just look at everyone on Medicare trying to get free transplants, amputations, & insulin needles. We are talking about a health insurance coverage for everyone system, not running the health care providers (as you imply with "health care system"). Typical right wing fear mongering just like with using terrorism to infringe on my rights. Let's use your word "potentially", shall we? You could potentially learn the concept of being forthright & making logical connections, but it is not very likely.
@DaveDidNotPay: What I like is that there's a lot of you crying, 'You want the GOVERNMENT to run that?!' yet you're okay with the insurance company doing so - which btw, WANTS TO DECLINE ANYTHING YOU SEND THEM AUTOMATICALLY. Yah.
That sounds like a better alternative.
Man, Ben, you and Laura are REALLY in sync today
I was actually about to participate in this, hopefully, on Saturday. I FINALLY got a job after almost a year and a half being unemployed and because of this program, I would be able to get rid of my current vehicle at 4x than it was worth. This is sad that our government is so unorganized. I feel like once again, the government implements a plan and then manages to pull the rug out from under the taxpayers that paid for it in the first place.
They also need to implement a sublaw that protects the consumers in case the money doesn't come through. People like me who are relying on this money and wouldn't be able to purchase a vehicle without one need a guarantee that the deal is null and void if it falls through.
I also want to add that dealerships, as they may be crying foul play in this deal, are guilty of raising prices and putting overpriced options on all of their vehicles, without an option of taking them off. A dealership here has suddenly decided that all vehicles coming off the truck are going to be installed with a $1400 option and there's nothing you can do about it. They have forced me to go 220 miles outside of my city to find a car without useless $1,000+ "customer appreciation" packages - which I find rather ironic that they call it that in the first place.
I find their timing of this sudden choice quite disappointing. This was essentially a welfare program for the dealerships and they're taking advantage of the people coming in. I feel sorry for those who get taken in or bend over and take it because they want that government money for their vehicle.
This whole thing is a mess and a obvious representation of what America has become.
Well I'm shocked.
@I Love New Jersey: I don't know that it was a failure. It sounds like it had two problems: 1) it was too successful and 2) They didn't plan out the paperwork before implementing the program (most likely because they were in a rush to introduce it). It the goal was to get people to trade in low mileage cars for higher mileage cars, it sounds like its working.
Um.. 'doomed'? It was a huge success! A victim of its own success does not equal 'doomed'.
That all the money was snapped up so fast shows that it was a great program and should be expanded.
How many dealers are going to find a way around destroying the engines and end up reselling the cars on their lots or selling off to a wholesaler or shipping out of the country. If this has so many loopholes, you can bet the dealers will exploit it to their benefit.
@minsky: I still feel like they should be able to use the cars as spare parts, so people with me with old cars who don't have the money to take advantage of this can get a better price on repairs. Plus, it would be more environmentally friendly, which was supposed to be the whole point.
This just tells me that people have money that they were holding on to until there is a good deal, and BOOM they are spending their money. This economy could have legs but it will take time to tell. This sounds like a good sign to me that things are looking up from here even though the stimulus did next to nothing except give our kids more crap to pay off later.
@DaveDidNotPay: Yep, Government healthcare means crappier healthcare. Don't be fooled. Encourage your legislator to vote this crap down.
@K-Bo: to clarify, I have the money, but I would have to make payments. My car may be ugly, but it is paid for and reliable, and 2 outta 3 ain't bad.
Hey, no complaints here, I submitted a trade this Saturday and it's in the hopper. However, reports on Autoblog (citing the Detroit Free Press among others) indicate the program is about to be suspended as there is fears that the funding may have run through.
What is more nerve wracking right now is that the dealership I bought from did 30 deals as of this afternoon, and the only feedback they've had was one that they'd transposed a VIN number on. Otherwise, nothing has been paid for. Yikes.
The dealership does not want to deliver the car until they know they can get their money from the government, and obviously I'm not letting them touch my trade until it's a done deal. Just hope to get ownership of the trade in another week or so (we're trading a third car so it isn't a crisis for us - making space for a soon to be licensed teen driver in one of our used cars).
@I Love New Jersey:
Agreed. Lets rush a program out without fully developing it, change the rules mid-stream (EPA standards) and then slam on the brakes right after it gets started because we finally realized how badly we fucked it up in the first place. Oh well, it's only $1bil right? We'll just raise the taxes on people who buy expensive cars to make up for it.
Oh, btw, the CARS.GOV website still shows only 10% of the funding as having been consumed at this time. I think they should trade in their "speedometer" for a more accurate model...
What does anyone expect though, regarding paperwork? Just check this box, and we'll send you $4500? As I recall, that's exactly what got us into this bank/loan/foreclosure crisis we are currently in...
Ok, maybe it was a fiasco, but think of all of the cuddwy wuddwy widdle polar bear cubs it saved!
@K-Bo: wvFrugan's point is that what we call an "Unemployment Rate" is a really bad indicator of the level and quality of employment in this country. Under-employed people, those who have given up, and those who have taken big pay or benefits cuts are not reflected in the global "unemployment" numbers.
@wvFrugan: Heck, we've got 20% plus all around us. Wonder how many will be grabbing up that offer.
I did the math, my truck is worth more than the max they're offering. Even though its 15 yrs old. It isn't enough of a gas guzzler or giving me problems that would make paying car payments for the next whatever years.
@enderx: You need a different insurance company. You see, there's this thing called competition...if companies suck, you LEAVE and get that service elsewhere. Good grief.
@H3ion: It's a big fail because it doesn't meet either of it's main goals, and is an enormous burden on the dealers trying to administer the deals.
CARS exists for two reasons, and fails at both. It's supposed to sell cars, and to "get older, inefficient cars off the road".
Well, we're down 9.5 million auto sales per year at this point, and this program's $1 billion only subsidizes the purchase of a 250 thousand cars. A 2.6% sales bump isn't going to save Government Motors.
As for the second point, a few MPG saved isn't going to make up for the crater of a "carbon footprint" that's created when you build an all-new car from scratch and toss the other one in the garbage. Any greenie should agree with that assessment.
"Why Cash For Clunkers Was Doomed"
Because it was administered by our government.
@Traveshamockery: "A 2.6% sales bump isn't going to save Government Motors." Specially when the bump goes to foreign car makers with better MPGs.
@Traveshamockery: I took it to be he was implying those who are still looking but not getting unemployment benefits were not included in that number, but they are. That is not the case, so I was trying to clarify that.
@Traveshamockery: Leave my health insurance company? Great idea, let me just... oh, wait a minute. I'd have to leave my job, because my employer gives me a choice of ONE insurance company.
But I'm glad we have a competitive, market-driven health system. Right.
@K-Bo:
I challenge the ability to accurately count those no longer receiving unemployment benefits as well as how accurately the define "actively looking & available". What about those seeking part-time work? Or those who are employed part-time but want full-time?
Apparently a lot of people find the reported number unbelievable, google "true u" and one of the offered auto-complete terms is "true unemployment rate"
Here is one tidbit I found from my google (1st/top result):
"True Unemployment Rate May Be Twice The Government Numbers
The official unemployment rate may also be dramatically inaccurate based on the Bureau of Labor Statistics method of calculation. Consider the chart below from Shadowstats.com.
If the government was still calculating the unemployment rate using the same criteria and methods that had last been used during the Clinton administration, the "official" unemployment rate today would be closer to 18%."
Note that this was in January '09, it's worse now.
@Missing in Vlissingen: I know, for real. But don't give up hope completely, we had luck a few years ago getting our company to change when we all complained. Of course what we were complaining about is driving 10 extra miles past the hospital that wouldn't take our insurance to the one that would, so it may have been them being afraid to get sued when someone doesn't get there on time and suffers permanent damage or dies. Worth a try to complain a lot if a big enough group has a problem with the current carrier.
@DaveDidNotPay: Seems an aweful lot like what Massachusetts is going through with our health care reform: hospitals have yet to be reimbursed for a year's worth of expenses and have had to resort to suing the state to get money -- which they still haven't.
This, of course, is what the congressional health care reform bill has been compared to warmly.
@missdona: I realize that as a "star" commenter, you are inherently better than the average commenter, but I figured you would have at least taken the time stamp of my comment and your article into consideration... At the time of my comment, there was very little specific details in terms of who said what. All there was to go on was "unnamed sources with no capacity to say anything official."
Duplicate - see the last post.