Reflecting on cash for clunkers at the 10 year anniversary. Stories, data, and regrets

Water Glass is what the liquid is called

 

The only people I remember participating in this were trading in seriously junky cars that weren't worth much anyways. If the sale value of your vehicle was worth more than the rebate then why would you trade it in and not just sell it?

 

Alot of people had a fear that SUVs would never come back at $4 gallon gas, and the resale of SUVs plummeted at the time. Everyone rushed to get rid of them without thinking. Drink the Kool Aid. Buy a hybrid. Herd mentality.

The cars and SUVs I saw traded in were nice. The H2 Hummer was a police detectives baby, bought in 2004. It was 5 when it was crushed, and it was well taken care of prior to the culling.

The govt wanted you to think these were all POS. But they were not. That's why I started the thread. There was alot of smoke & mirrors at the time.

My hope is that those who were too young or didn't realize what happened can learn from this thread.

 

Obama sign the bill residing it.

 

I thought it killed itself, you know the billion dollars in one month, I think it was July.

 

I remember this like it was yesterday. I work for an automall with 11 different brands. We had hundreds of vehicle, i seized almost half of them myself. So many cars that caught on fire while trying to get the liquid glass to harden(mostly 5.0 fords). We had demolition derbys, it was a great time smashing into managers, haha. I was one of 4 techs that did all of the vehicles. Some of them almost made me want to cry while seizing the motor, and others were just plain fun. Was a great start to my career, haha.

 

As a person invested in the stock market I rather like the 18,541 point increase of the DOW since January 20, 2009. I hope the next 10 years are just as kind. There were a lot of people that hated the program and apparently still do.

To answer the OP initial question my 2009 Tacoma was a CFC purchase on August 5th 2009. Still have it and it is serving my needs well. Not bad for a 17K purchase.I liked the quality so much that we bought a 2017 Avalon in July of 2017.

 

This whole ideal was a bipartisan attempt to kick start the economy after the recession, GM was bankrupt people were out of work it had merit but economists should have run it not lawyers as most of the house and senate was. By the way California has started a similar program.

 

Didn’t work for GM though, we still had to bail them out. And I don’t remember hearing anything about it being to jump start the economy. I remember all the talk about using too much gas and old cars polluting the environment.

 

Maybe you are only remembering the pieces that fit the narrative that you want to remember? The main purpose was to stimulate the economy. The environmental aspect was a secondary goal, and unfortunately the part that made it fail. American manufacturers weren't making very many fuel efficient and hybrid vehicles back then. Requiring folks to use their rebates to purchase more fuel efficient vehicles meant that most sales didn't go to American manufacturers, and therefore didn't increase domestic spending the way they had anticipated. It was an oversight by the folks who wrote the policy.

I still don't understand how it was CFC's fault that people were scrapping good cars though. It seems like if you were holding something rare, you would know that it was worth more than a couple thousand dollar rebate against a Toyota Corolla. Who were these people scrapping Bentleys? Doesn't make any sense...

"Exotic cars crushed under the program
Jalopnik reviewed the lists published by the NHTSA and found numerous cars crushed under the program that had book values far exceeding the rebates offered by the government. Among some of the cars whose book value was worth more than government rebates included models ranging from the GMC Typhoon to the Bentley Continental R.[82] However, a further review noted that many cars that were thought of as being crushed under the program were improperly recorded and/or swapped for other car models or trims.[83] Some exotic/collectible vehicles were scrapped under the program included a Maserati Biturbo with 18,140 miles,[84] a GMC Syclone,[85] which was removed from scrappage in the program by a group of car enthusiasts [86] a GMC Typhoon,[86] An Isuzu Vehicross, a La Forza SUV,[83] a TVR 280i,[83] and various Ford Mustang, Ford Taurus SHO, Chevrolet Camaro, and Chevrolet Corvette models, among other cars.[87]"

 

Yep, you are probably correct, sort of. Those are the things that probably stood out to me, and things that I would remember about it.

 

What I find interesting about the program is that out of the top five vehicles traded in, three were from Ford:

1. Ford Explorer 4WD
2. Ford F-150 2WD
3. Jeep Grand Cherokee 4WD
4. Ford Explorer 2WD
5. Dodge Caravan

 

Is there info on the cars bought with the rebates?

 

The top five vehicles bought were:

1. Toyota Corolla
2. Honda Civic
3. Toyota Camry
4. Ford Focus
5. Hyundai Elantra

Source: https://en.wikipedia.org/wiki/Car_Allowance_Rebate_System

 

And Ford did not take a buy out.

The National Highway Traffic Safety Administration was shocked and amazed that so many pick up trucks were scraped and the owner brought a new pick up truck.

 

If I recall correctly Ford leveraged their actual factories & Headquarters as collateral for a massive loan. They did not take the buyout but they risked it all. That was balls.

TARP was the buzzword at the time.

Reference: https://www.thebalance.com/auto-industry-bailout-gm-ford-chrysler-3305670

 

It was primarily about the economy, with getting older less fuel efficient cars off the road secondary. It depended on who you talked to as to which agenda they wanted to push. The amount of money allowed for trade-ins varied with less fuel efficient vehicles being worth more money. The economy was bad in 2008-2010 and car sales were pretty stagnant.

Not possible. Any vehicle purchased had to get at least 23 mpg to qualify. I don't know of any truck in 2009 that would meet that criteria

Another misconception. The car buyers didn't get a dime out of this the way it worked. The funds went directly to the car dealers. The CFC program allowed dealers to make better deals to buyers.

Another lie that has been spread is that a lot of poor people took advantage of the program and just got into financial trouble. The truth is that banks had been burned badly with loans to unqualified home and car buyers early in the decade. By 2009 the guidelines for loan approval were tougher than at most any other time. In fact it is a lot easier to get approved for a loan today than in 2009. Only very well qualified borrowers could get a loan in 2009.

My son was in college driving a 13 year old Grand Cherokee valued at about $2500 at the time. It needed new tires, brakes and other repairs that would have totaled about $1000. I encouraged him to take advantage of the program. He got $4500 discount off a Honda Fit and his payments were very reasonable. His needs changed about a year later and my wife and I bought the car from him. It now has 120,000 miles on it and the difference in fuel consumption for 120,000 miles is about 3200 gallons. The gas savings paid 2/3 of the cost of the car and so far we've done no repairs other than routine maintenance.

Was CFC a success? I doubt it from a national perspective, but it was no worse than any other government program. The government is always giving tax breaks for certain activities. If you borrow money for a home much of the interest can be written off your taxes. Make modifications to your home to make it more energy efficient and you get tax breaks. If your yearly medical bills reach a certain point you get a tax break. Buy a new truck for your "business" and you get a tax break. Having kids means a tax break. If you make under a certain income each year it is very much possible to get a tax refund that far exceeds what you paid in taxes that year.

In a nutshell there are all sorts of tax breaks for the very rich, and the very poor, that are given year after year that far exceed the $3B CFC cost. And CFC was a one time thing. Not something done every year for decades. For once this was a government program that helped out the folks in the middle with a once in a lifetime $2000-$4500 break on buying a new car.

 

The Toyota 4 cylinder in a single cab or an EXcab was rated at 24MPG. So was the base Colorado/canyon. There needed to be a 6 MPG difference between the vehicle being turned in and the vehicle being purchased. I had a GMC Sonoma rated at 16 MPG. The 91 Sonoma was on its last legs and had a value of less than $500. It was a no brainer for me. I wanted to pay cash but at .9% interest that would have been stupid.

When the opportunity presents itself you need take advantage of it. 10 years later and I still enjoy driving the Tacoma.

 

I was thinking along the same lines as it mainly being advertised a green thing with some economic increases as a secondary impact. There was a massive 787 Billion Stimulus package that was "supposedly" for stimulating the economy, but then again the CFC program could have also been a part of the Stimulus package.

 

I get a note with my CA registration renewal every year saying I can get "up to $1k" for getting rid of my fuel inefficient vehicle...I make sure to toss that piece of paper in the trash and not the recycle bin as a small means of rebellion