Cash for Clunkers: Winners and Losers

[Professor S]

WINNERS

Sept. 1 (Bloomberg) -- Ford Motor Co. said August U.S. auto sales rose 17 percent, the automaker’s second straight gain, as the federal government’s “cash for clunkers” rebates probably pushed deliveries to the highest rate since April 2008.

Ford’s total including the Volvo brand climbed to 182,149 cars and trucks from 155,690 a year earlier, the Dearborn, Michigan-based company said in a statement today. The increase was smaller than analysts’ estimates.

Toyota Motor Corp. will say sales climbed 8.9 percent, and Honda Motor Co. will report a 3.2 percent gain, based on adjusted estimates from 4 analysts. Those would be the automakers’ first increases this year.


LOSERS

Chrysler Group LLC will say sales fell 15 percent as inventory ran low, said a person familiar with the results who asked not to be identified because the figures haven’t been released.

General Motors Co.’s sales probably fell 16 percent, according to 8 analysts’ adjusted estimates. Nissan Motor Co. slid 8.8 percent, according to four analysts.

Source: http://www.bloomberg.com/apps/news?pid=20601087&sid=aL64iMpt6dks

[manasecret]

WINNERS:

People who essentially got an awesome return on cars that were worth shit.

LOSERS:

Charities expecting to get those cars as donations:

"We're more than a hundred-thousand dollars off of our numbers in three weeks — cause it's gonna continue to hurt us for several more weeks. So that’s our estimate of damage in reference to what we can give to these kids."http://app1.kuhf.org/houston_public_radio-news-display.php?articles_id=1251759163

$100,000 in 3 weeks. And that's just one charity in Houston. Why oh WHY did the gov't have to make the cars undriveable??? Why not just immediately donate them to charities?

[Bond]

I wonder how much debt Cash for Clunkers created. $4000 is at least $6000 from any new base model car.

Edit: Charities are big losers. Government programs such as this one often have unintended consequences that harm private charities and low-income persons... quite unfortunate.

[Professor S]

And that's just one charity in Houston. Why oh WHY did the gov't have to make the cars undriveable??? Why not just immediately donate them to charities?

Not to get partisan, but ask Pres. Obama's environmental advisors. Half of the goal of this program was to get gas guzzlers off the road, so they opted to destroy many perfectly good cars rather than have them go to charity or even sell some in bulk to developing nations to help defer some of the costs of the program.

Economically, while this has been a temporary boon to car sales, this is also hurting used car dealers, repair shops and many believe even retail as many people have opted for the large purchase, reducing their available funds for smaller ones.

The funniest part is, the companies this was supposed to help, (GM and Chrysler) still took a bath on the deal...

[manasecret]

If that truly was the reasoning (I haven't read or heard or anything from someone official that confirms it, is all I'm saying) it was a dumb and misguided decision. I think you can promote the environmental benefits of high mileage cars without making the old cars undriveable.

First, this is not the way to fight climate change, if that was their intention. And secondly, just the fact that you will get a bunch of people who now have high mileage cars and can see firsthand the benefit of the money being saved, I think very few will go back and demand lower mileage cars in the future. Basically, you get the same benefit without destroying cars.

Finally, I want to be fair and point out that much of the car can still be sold for parts, with some minor and major exceptions (I can't remember what off the top of my head). So, economically, I think they were able to recoup some costs and at least not all old parts businesses and mechanics were fucked over by the program.

EDIT: And to comment specifically on your numbers, that does surprise me that Chrysler and GM would still see sliding sales. I guess no one has any trust in them at this point, though maybe a big part of it is that there are few cars to choose from their lineups that meet the program's rules?

[TheGame]

EDIT: And to comment specifically on your numbers, that does surprise me that Chrysler and GM would still see sliding sales. I guess no one has any trust in them at this point, though maybe a big part of it is that there are few cars to choose from their lineups that meet the program's rules?

That's what I think, if the numbers are in fact true. Though Chrystler 300 is admitedly a very popular car around these parts.. that's probably the only car I can think of from those companies that would sell over Toyota's, Hondas, and Fords.

[Vampyr]

Sort of humorous fact: the $4500 rebate for your "clunker" is taxable.

A lot of people didn't realize this until they made the deal and got the money.

[Dyne]

This is retarded. Canada's "Scrapit" program only gave $2250 for a while and now only gives $1250.

However, I did scrap my 1994 Dodge Intrepid and decreased my emissions a hell of a lot. The downside? Fucking paperwork. I bought my car on June 21st and it's September now. We finished all the paperwork/scrapping at the beginning of August and now we have to wait 6-8 weeks for the money. The scrapit program DOES offer $250 at point of purchase, though.

....And I guess I got $1000 for being a recent post-secondary graduate. $3250 savings isn't that bad. :D Especially when it's not taxable.

[Professor S]

That's what I think, if the numbers are in fact true. Though Chrystler 300 is admitedly a very popular car around these parts.. that's probably the only car I can think of from those companies that would sell over Toyota's, Hondas, and Fords.

I think thats part of it for Chrysler (I love the 300 Touring soooo much, and I will have one someday), but GM should have done much better considering their fleet of trucks and SUV's that qualified (truck and SUV standards for the program were much lower than cars).

[TheGame]

The only problem with trucks is that they're kinda expensive, and not as appealing.

But yeah, Chrystler 300 is a nice car. I'm hoping to get one or get a Mustang come next summer. For now I'm just gonna have fun with having no car note and low insurance lol.