Cash For Clunkers - A Huge Success

By
Real Estate Agent with Windermere Real Estate - Palm Springs CalBRE# 01339266

Cash For Clunkers - A Huge Success

The Obama Administration's CARS Bill (Car Allowance Rebate System) has proven to be a great success with over 457,000 motor cars being sold as a direct result of this stimulus program.

President Barack Obama said that the program has been "successful beyond anybody's imagination"

Transportation Secretary Ray LaHood said the program has been "a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work." He said the department was "working toward an orderly wind down of this very popular program."

GM announced plans to rehire more than 1,300 workers and automakers have been paying overtime to boost production.

The program will officially end at 8pm ET on Monday August 24th 2009.

Senate Democrats narrowly defeated a Republican effort to kill the plan in July. The Republican effort was lead by Senator John McCain who said: "I not only wouldn't vote for the extra two billion, I was opposed to the initial billion."

Sen. Jim DeMint (R-S.C.) is on record stating: "I just think this is a great example of the stupidity that's coming out of Washington right now, and I think Americans realize the numbers that we're throwing around don't work."

It appears that many Republicans were on the wrong side of history reagrding this matter .... Let's see how they spin this!

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Comments 19 New Comment

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Ambassador
745,909
Steve Shatsky
Dallas Real Estate & Short Sale Specialist (214)213-0340
Prudential Texas Properties

Hi Stewart... It sure seems like the program has generated some good momentum for the auto industry.  Lets hope it continues once the program has ended!

August 21, 2009 12:19 AM
Rainmaker
478,731
Amy Jones Group
Recognized as the #1 RE/MAX Team in the Valley
RE/Max Infinity - www.AmySellsAZ.com

I only wish the program had truly added an incentive to buy a "green" car.  Maybe a Hybrid requirement attached.  My understanding is the car you purchase had to average only 1 mpg more than your "clunker".  What a waste of a REAL opportunity to benefit the environment.

August 21, 2009 12:26 AM
Rainmaker
146,982
Carol Pease
CRS, Broker-Associate 512-721-6320
Pacesetter Properties

Monday!!!  We had better get busy if you want to get rid of that old clunker. 

August 21, 2009 12:53 AM
Anonymous #4
Anonymous
Anonymous

I think Amy has the wrong understanding, but I also note that she is in Arizona, home of Senator McCain. Here's the best site I've found using good old plain English, where it says:

If your car gets a combined [city and highway] miles per gallon of 18 mpg or less, you can qualify as long as the car is not more than 25 years old.

You have to buy a new car, and there are other qualifications, such as clear title, driveable, etc.

August 21, 2009 01:44 AM
Rainmaker
996,044
Karen Anne Stone
Fort Worth Real Estate
New Home Hunters of Fort Worth and Tarrant County

Stewart:  One of the cries of the Obama campaign was "Yes We Can !"  It appears that all the Republicans are good for is a series of "No You Won't !"  I can easily see why some in the current administration simply want to "go it alone" on health care... although I don't fully agree with that.  But... with all the negativity we are surrounded by... it may be the only way.

August 21, 2009 03:15 AM
Rainmaker
996,044
Karen Anne Stone
Fort Worth Real Estate
New Home Hunters of Fort Worth and Tarrant County

I understand Amy above and her hopes that more "green" cars could have been put on the road... but the fact that this CARS program has had a major impact on car inventories on the dealer's lots... will help put many people back to work... which will, in turn, create more positives.  It was a great program.  Not perfect... but still great.

August 21, 2009 03:17 AM
Rainmaker
589,438
Jim Hale
On the Move for You! - Eugene - Springfield Oregon Real Estate
ACTIONAGENTS.NET

This program has not been a terrible idea.  It will have some good consequences. But while those are immediate, they are also temporary.  The incentive has no doubt motivated many people who have been thinking about buying to get off the dime and act.  But when it expires, there will likely be a downward tick in demand.

It's just like the $8000 first time home buyer's credit.  It is helping us now, but if it actually ends in November we will go back down again.

The long-term effect (of both programs) is more government debt.

A lot of people are unhappy that we spent a lot of money in Iraq and went into debt to do it.  This may be more popular in some quarters (like followers of Stewart's blog) but the fiscal effect is the same.

There eventually has to be a limit to the good-times-now programs that we foist off on our grandkids to pay.

 

Amy is dead on in saying that the right place for such an expensive tax break would have been to truly reward purchasers of very fuel efficient or alternative fuel vehicles.  That's where we really need some incentives...with staying power.

And that, by the way, Senator McCain would have favored.

August 21, 2009 04:23 AM
Anonymous #8
Anonymous
Anonymous

Stewart, amazing that while giving a few kudos, people are still discounting the long term impact this short term program will have.  The auto recyclers will be kept quite busy for quite a long time, processing all the parts removed from those cars.  The auto makers now have received a clear message from the consumer, NO MORE GAS GUZZLERS!  The vast majority of cars purchased were high mileage smaller vehicles.  This program worked and will continue to work.  Unfortunately there are those that want nothing to work!

August 21, 2009 07:06 AM
Rainmaker
475,888
Palm Springs Realtor Stewart Penn
Windermere Real Estate - Associate Broker
Windermere Real Estate - Palm Springs

"We were told this program would last for several months," Senate GOP Leader Mitch McConnell of Kentucky said. "It ran out of money in a week, prompting the House to rush a $2 billion extension before anybody even had time to figure out what happened to the first billion." 

The program has been so immensely popular it worked far better than originally anticipated ... and this was the reason for Republicans to try to shoot it down?

This is clearly proof that the GOP opposed the bill on party lines instead of contemplating the real benefits the program would have for the economy.

What's interesting is that this program required $3 Billion which had a major impact on many American consumers and workers ..... and Republicans were up in arms shouting about the cost.

Why aren't those same Republicans shouting about the billions and billions and billions being poured into Bush's Iraq war?

August 21, 2009 09:18 AM
Rainer
156,391
Tom Boos
Sine & Monaghan Realtors, Real Living

The program has been a great success but there are no long-term benefits derived from it's implementation with regard to employment.

August 21, 2009 09:28 AM
Rainer
96,796
John Hersey
e-PRO Realtor
Berkshire Hathaway HomeServices Homesale Realty

Stewart,  I think most things would be successful using an unlimited supply of funds that you do not even have.  If the $8,000 tax credit would be more like this incentive, as far as percentage of rebate to purchase price, it would be a huge success too.

So, all these happy new car owners, even after the rebates, drove off the lot with a depreciating car.  That always disgusts me!  Now they will all be buying less stuff because they have more debt and after they realize they are going to pay it back through raised taxes, then what?  We(The Govt.) can not continue to spend, no matter what it is on, without ways to pay for it.  You are a business man, I think you would understand this, right?

And, the ones called back to work will be out of work again when they catch up again.  IF the car dealers, manufacturers, etc.  want this to continue, they could still offer rebates, but they don't want to if the govt. isn't subsidizing it.

I find it really amazing that the car manufacturers, who got bailed out already, are now getting helped again.  Talk about double dipping!

Foreign car companies are really happy with this program!  Aren't they the ones who sold the most during this huge sale?

August 21, 2009 03:33 PM
Ambassador
883,319
Lane Bailey
Realtor & Car Guy
Century 21 Results Realty

Great plan...  GM is having to provide emergency funding for dealers because the government is failing to pay the rebates.  Some dealers are owed $1,000,000 and the government is refusing paperwork for the most minor of reasons (person trading the car in signed the name line and wrote their name on the signature line). 

And now that the program is slated to end, will those hired workers still be needed?  Will sales stay up, or crash like a Smart Car?  And how many dealers will go out of business because of the government's inefficiency at paying the claims? 

Oh, and how much impact has the removal of lower priced, older cars had on transportation affordability for the working poor... maybe someone needs a $1500 work truck...  But there aren't many around.  And what about the used parts that can't go on the market because the parts have to be decommissioned?  Those are the parts that those same working poor would have purchased to keep their cars in good repair. 

Unintended consequences?

August 21, 2009 08:08 PM
Rainmaker
475,888
Palm Springs Realtor Stewart Penn
Windermere Real Estate - Associate Broker
Windermere Real Estate - Palm Springs

It never ceases to amaze me how some people refuse to acknowledge any of the positive results achieved by the Obama Administration.

I understand that you can't please all the people all of the time .... but this stubbornness indicates a mind-set that cannot be reasoned with .... and relates back to Rush Limbaugh's statement that "he hopes Obama fails."

August 22, 2009 09:05 AM
Rainmaker
470,095
Trey Thurmond
College Station , Texas Homes
BCR Realtors

Lane

The dealers I know have yet to receive payment.  They are barely surviving now and this is a grave burden on them. The cash out for the "trade-in" is a one time deal, remembering that the "asset"  or trade was a clunker that has to be demolished.  So there was no "collateral" for the dealer who also has to bear the burden (under strict rules) of disposing of a hunk of junk. History books will show this to be a "clunker of a mistake."   You don't have to have a doctorate in economics to realize it either. Just another example of a temporary feel good policy for the public, as opposed to a prudent business decision.

I have a government office moving into the building adjacent to me.  The space has never been leased. Being in the real estate business I did an  analysis and determined they will probably over spend  untold dollars to acieve a one year lease.  They don't care because it will make the employees " feel better" to be in a new space vs.  one of the dozens of older vacant offices that could be leased for way way less.  "Feel good" is the key word with this administration.

August 22, 2009 09:40 AM
Rainer
96,796
John Hersey
e-PRO Realtor
Berkshire Hathaway HomeServices Homesale Realty

Stewart,

It never ceases to amaze me that we have valid arguments that you decide to ignore again and again and call it Limbaugh this or Beck that, etc...  I think for myself and have common sense which most people fail to use anymore.  Like Trey said, You don't have to have some sort of degree to see a bad business move.  If the govt. had to operate like you and I, they would fail, period!

August 22, 2009 10:04 AM
Rainmaker
475,888
Palm Springs Realtor Stewart Penn
Windermere Real Estate - Associate Broker
Windermere Real Estate - Palm Springs

On the contrary John, when the government operated like YOU they failed!

(The facts speak for themselves - Remember 2001-2008 The Bush Administration?)

August 22, 2009 10:25 AM
Rainer
96,796
John Hersey
e-PRO Realtor
Berkshire Hathaway HomeServices Homesale Realty

Ummm, Stewart, I am not failing so there goes that argument.  I make sure I have more coming in then going out.  That is good business.  I guess you do the opposite!!  Talk about things going over some peoples heads...

August 23, 2009 10:41 AM
Rainmaker
470,095
Trey Thurmond
College Station , Texas Homes
BCR Realtors

John

I have been in Real Estate for almost 32 years. Of those years my very best years finacially were under the Bush Admin. This year has been one of the worst in years, but we are surviving. As my grandpa said " When the outgo exceeds the income........ the upkeep will be your downfall."

August 23, 2009 09:51 PM
Rainer
96,796
John Hersey
e-PRO Realtor
Berkshire Hathaway HomeServices Homesale Realty

Trey,  I have heard that several times before and it makes PERFECT sense.  Stewart seems to be trying to argue like a 1st grader here and he tells me to have a civil debate.  I did not call him a failure but he tries to call me a failure with the way he says it.  Oh well, I am used to this nonsense.

Stewart,  How can you say the Govt. runs things like a successful business.  The Post Office is losing money, Social Security is losing money, and on and on.  Successful businesses do NOT lose money!

August 24, 2009 08:43 AM
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Rainmaker
475,888

Palm Springs Realtor Stewart Penn

Windermere Real Estate - Associate Broker
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