Edmunds CarPool

Karl,

Believe it or not, I have two adult (well... kinda) kids that would qualify and are interested. Third child just used the Texas Air Check $3000 voucher to purchase a newer vehicle. In certain parts of Texas, you can "trade in" your ten year old or older vehicle for a 2006 or newer vehicle. My son's Honda Civic, which was averaging in the mid 30's mpg, blew a head gasket and warped the block (what a lemon; 265,000 miles). He bought a 2007 4x4 Toyota Tundra single cab long bed with the 5.7L engine. Scary fast, by the way. So, he traded his 30+ mpg car for a 15 mpg 4x4 truck and the state paid him to do it! Is this a great country, or what?

Other two kids have older GM products, but do not want to buy GM or Chrysler. One is looking to buy a Kia or Hyundai with BOTH the Texas Air Check $3000 and the $4500 OBAMA! voucher combined. That's potentially $7500 towards a $10,000 Kia. I've tried to tell them there is no free lunch, but I guess I am wrong in this case.

One question. Is it just domestics or do all new cars with better mpg qualify?

What is to stop me from buying a $100 beater and getting $4500 for it?

It's not the people with <$4500 daily drivers who will be trading them in, it's the people who are in the new car market that are smart enough to go buy a $100 beater to use for a trade.

By the way, I read this blog everyday, and if Karl ever writes a book about "how to drive a Ford GT when your wife drives a 2004 Chevy Malibu" I will be the first in line to buy it!

I drive an '02 Malibu that, according to your appraiser, is worth about $3,000 as a trade-in. Those who would benefit from a cash for clunkers bill are people who, like my wife and I, buy new cars every 8-10 years instead of every 3 years. Some people like to have time to pay off a purchase and then save toward a new purchase rather than making monthly payments for the rest of their lives.

You have to be the registered owner of the trade-in vehicle for at least a year, so no buying an old heap just to trade it in.

This program would work on all new cars (domestic and import).

dilettante:

There are bound to be some people who can take advantage, but most will not be able to. Do not forget that your beat up car HAS to meet certain mileage requirements. An old Civic will not qualify. Matter of fact, most compacts and midsize cars will not qualify which means millions of folks will be excluded. If they dont change the mileage minimums (which are there to appease Californians/environmentalists) the bill will be useless for most. The logic from the eco folks is that those who already drive a reasonable efficient car shouldnt be rewarded for trading in their vehicle, this should only apply to people who are driving guzzlers that are killing the environment. The new vehicle purchase has to be under a certain amount as well-I think it's $35k.

I would qualify and am interested in how this bill turns out. I have two "primary" vehicles, a 2007 Mustang GT and a 1993 F150 4x4. I have been thinking of replacing the F150 as it has 254,000 miles and the rust is starting to get bad (live in Wisconsin). Ideally I would like to replace it with another F150, and have been looking at 04+ F150's. If I could get $4500 for my truck, and got enough off a new truck, I may be able to buy new. That's IF the MPG rules of the bill work out. My old truck is a I6 5spd 4x4, rated at 14 city 17 hwy according to fueleconomy.gov.

I agree there will not be many people who are driving a sub $4500 vehicle and are able to buy new.

My adult son drives a 1990 VW Cabriolet. And while it's not worth more than $4500, it gets 24 MPG, so doesn't qualify. Geesh.

I've got a 1999 Honda Civic w/ 140K miles that's worth about maybe $4,000.

Can I not just trade in the old Civic for a new one and collect $4500 for the car? I'm sure the new one gets better gas mileage than the old one...

Crushing a 10 year old Civic seems like a waste, though, when it could go another 100K miles with no issues...

Why do people waste their time coming up with stupid ideas/bills? This definitely qualifies as a half-ass'd attempt on both sides (environmentalists and car enthusiasts)

This bill is a perfect example of how the government creates bills contrary to their stance of "helping the poor". The only thing this bill does is eliminates cheap, affordable, used cars that are usually bought by poor people. Not only does it take more of these vehicles off the market, but it also helps to increase to price of other used cars of similar makes because they become a scare commodity.

Not everyone can afford a brand new car. Even Bernanke admits to this. The government is, again, boasting indebtedness and living on credit by convincing people to "trade-in" their <$4500 used car while also destroying the used car market, thereby hurting those that are financially disadvantaged.

Good job, Capital G.

I had a truck that I occasionally used for hauling, off-roading, etc. Needless to say, it wasn't my daily driver. Recently, I'd been needing it less and less. At the same time, my wife needed a new car. I sold the truck to the state's clean air program for more than I originally bought it for and then used the money on the new car. If the $4500 Obama plan had been in effect, I would have jumped all over it.

"I suppose there have to be at least a couple people in the country driving sub-$4,500 cars while sitting on a pile of cash and/or earning plenty of money, thus making a new-car purchase easy for them. How many of these people exist, and why are they driving around a sub-$4,500 car when they can buy a brand new one?"

Yup, I'm sitting on a pile of cash. In my case, the answer to the second part or your question is that the sub-$4500 car (truck) is not my daily driver. It was just a beater that performed duties that the other vehicles otherwise couldn't and for a time was more convenient than renting.

As for the first part of your question, I don't know how many others are in the same situation.

"But if there's one thing worse than inappropriate government intervention it's poorly executed inappropriate government intervention."

Hear, hear. I feel the same way about the carbon-trading bill.

The only reason this bill was written is that a similar one seemed to actually boost car sales in Germany. I don't know why it worked over there, but I hope the people involved have studied it hard.

The biggest beneficiaries will probably be kids coming out of college. I had a $300 car during my first year of work and then I bought an almost-new car. That mileage clause sucks though, because the archetypal beater often gets better mileage than modern heavy cars, even the smaller ones. And it's silly to crush those old cars. They'd serve an even poorer person well, or find duty in another country. Spare parts, at least!

A significant minority of cars in my neighborhood look to be worth less than that $4500 (admittedly best case) trade in.

Knowing property values here, it's safe to say that 98% of their owners could go out and buy a new car tomorrow. And another one the day after that.

They don't because they aren't interested in cars. And have outgrown the new money disease of shame at being seen in a 10 year old Camry.

I don't think the government kicking in an extra $1000 on the trade in would interest many of them. Might push a few to buy a new car this year instead of next. Borrowing money from China to do that seems like eating the seed corn.

All this is academic of course, as the fuel economy requirements disqualify effectively all cars. Unlike $3K book value cars, $3K book value trucks and SUVs (not CUVs, which are also largely ineligible due to mileage) are real buckets.

Folks I know with 10 year old trucks either beat the hell out of them offroad and wouldn't want a new one, or else are a whole lot further than a $1500 subsidy from being able to afford new.

And again, why are we borrowing money from China to buy people new cars? I thought buying depreciating toys on borrowed money was how we got into this in the first place.

Let's say you ARE in the market, or plan to be soon... What's to stop you from going out now and buying some old jalopey for $300, then just wait for the legislation to pass and go trade it in for $4500 on the new car you were going to buy anyway?

To be fair, I do think there are a good number of people driving sub $4500 cars that could afford a new car, but have just been holding off because they are frugal or concerned about the future of the economy (can you say hyperinflation?). But I don't think this incentive is going to make those tightwads open up unless their old car really is on its last legs anyway. Most of them would probably just buy another sub-$15K used car instead.

I am hoping this passes soon because $4500 to a dealership is really more like $6000 in the real world. My 2001 Saab 9-5 Aero w/ 95K miles might sell for $4000 privately, but no dealership will give me more than $2000. I've tried. I really would like a new car with a warranty for POM (I have two young ones), and that extra $2500 (with current manufacturer incentives) can really help bring my monthly payments down.

selectfuse,

Your Saab probably wouldn't qualify anyhow because of MPG.

Also, why voluntarily crush an 8 year old car with that little mileage on it when you could easily earn back $4000 or more dollars by selling it to someone who could put it to use? That's not only wasteful, it's pretty greedy.

Why do people keep saying "your car won't qualify" if it's a midsize car? Doesn't the new car just have to get BETTER mileage than the one you crush? That's not such a big deal (though I think it unfairly benefits gas-guzzler drivers... but then again there's hardly anything fair about this bill). I drive a '94 Accord w/ 240,000 miles, work a steady job, and I would love a Honda Fit or Civic. I wonder if the Si is rated as higher than my Accord?

I would probably cry at the thought of my car being crushed, though. It still runs like an absolute champ. This may be great for Honda btw. How many people are on 200K + miles on their old Honda, love the brand because of their experience, and would gladly trade thers in for a $15K Fit or $17K Civic??? Lots methinks.

Nevermind.... I saw the news. It has to get 18mpg or worse (the car you trade in). Complete BS... and only so they can buy one that get's 22 mpg?? So they're going to get paid $4,500 to get worse mileage than I currently get, while I get nothing?

Not to be a hypocrite, but now that I can't take advantage of this bill, I REALLY hate it.... hey at least I'm honest.

I hate to be the one to break this to you Karl, but if Edmunds' appraiser says your wife's Malibu is worth $4,788 in trade, it's a virtual lock that you won't find a dealer willing to give you more than $4500. It's not just your site, it's all of them. The retail used car market has plummeted and the online appraisers simple haven't kept up.

So, let's see, you've got a used piece of junk that's probably worth less than the proposed $4500 credit and a wife who's stuck driving it while you've wheeling around in a Ford GT. I think I may have identified at least one candidate to take advantage of this legislation.

I have to say nosubstitute is right. Several years ago, the Edmunds TMV appraiser was pretty accurate. But it seems in the past year that it is way off. It keeps insisting my '07 S60 2.5T is worth $19.5k on trade, but out of seven dealerships the best appraisal came in at $15k. On the retail side, I see equivalent S60s for sale at dealerships for what the TMV appraiser says mine is worth on trade or maybe just a bit more. In the real world, I would be surprised if Karl's Malibu was worth $3,500 in trade. I just saw a bunch of them in the $4,500-$6,000 range on AutoTrader, so $4,700 on trade is highly unlikely especially if the dealer can't resell it on the retail lot (they have to factor in the loss they'll make when it goes to the high-bidding wholesaler, particularly in this economy).

However, the Malibu wouldn't meet the mileage qualifications, so it's a moot point.

With the model year and mileage restrictions, very few cars would qualify. I have a '91 RX-7 Convertible that barely qualifies (17.9 MPG combined), and not many cars got worse mileage than it. Most of those that did get worse mileage are worth more than $4,500 (performance or big luxury cars). Would I turn in the RX-7 under this program? Well, the bill has my attention. It would take a lot more than $4,500 of work to make the car worth more than $4,500 to a fan of the car (it would never be worth that much on trade regardless of how much money I put into it). Then again, this bill might eliminate a bunch of '84-'91 RX-7s, so the value of mine might go up in the end.

It is stupid legislation, and it probably won't work like the successful German plan, which they should have just copied. Another problem right now is lending. Even good credit gets you high interest rates nowadays, and many lenders won't touch people with what used to be considered decent credit. Of those people driving around qualifying vehicles, how many would actually qualify for a decent loan? It's not going to stimulate sales as much as they think, and those manufacturers that don't have their own manufacturer financing arm are probably not going to get much of this action.

i didn't read anywhere that said you will get $4500 for a car you bought for $100.

i think this will only make dealerships take in that car they otherwise wouldn't and give you whatever its worth for it.

the dealership will then pocket that money and you wont see a penny of it. (or you will pay for it on the new car)

by the way, i think the government already has a program in place for gross polluting clunkers that you don't want to fix. i believe they buy it off you for $500 or something...

Vehicle has to be continuously registered AND insured for 12 months in the name of the purchaser of the new vehicle and the new vehicle has to be registered in that name also.

That is what is stopping you from buying a beater and using it for this program, at least until you have owned it for 12 months, at which time this program will be over.

Vehicle also must be 1984 or newer. Also must be drivable. Also must meet mpg stipulations, which are actually pretty loose for trucks and not so much for cars.

I just hope the program comes into effect so I can pry my wife out of her 97 Taurus wagon and get a little of the excessive taxes that I pay back in my hands. I hate that car and we can afford to dump it and buy another, she just doesn't want to. (We also have an 08 Miata, an 03 Suburban, and a 96 Impala SS.)

bigfan:

Your car wont qualify based on mileage most likely. Very few cars get 18mpg or less.

bigfan, your 96 Impala SS will qualify for the scrap program based on mpg. If your willing to let it go for $4500 or less. LOL!

why not just drop the mileage requirement and simply require anyone using the money to buy something that gets better mileage than what they turned in?

Actually, I have a friend who qualifies. She recently bought a '98 Jeep Cherokee for less than the $4500 incentive, and I think it would definitely come in at under 18 MPG. But, she loves the thing and wouldn't trade it in for extra cash.

So, calling all disgruntled Jeep owners... This is your chance to get out of your car!

"why not just drop the mileage requirement and simply require anyone using the money to buy something that gets better mileage than what they turned in? "

California delegation wont allow that. They dont want this bill to necessary help American automakers, they want it to help hybrid sales and remove "dirty" vehicles from the road. They feel that dropping the mileage requirement will simply boost sales in a random manner and remove some efficient vehicles from the highways.

jchan

No, your friend would not qualify if she recently purchased the Jeep Cherokee. Vehicle must be owned for a minimum of one year by the current owner, must have been registered continuously to the same owner during that year, must have been insured continuously during that year.

The fine print in the legislation as passed by the House absolutely does not match the stated goals of the legislation to stimulate auto sales, improve fuel efficiency and reduce emissions. Too many hoops to jump thru.

I'm 25 and have been driving my 97 Jetta GLX since college. I'm in the market for a new car so this bill WOULD apply to me. Fueleconomy.gov has my car listed as 19 MPG combined... think they'll make an exception..?? :)

I qualify for this AND am looking into a new car- only i'm buying the car in july.. so i probably won't be able to get the money.. I currently drive a 1988 Lincoln Town Car Signature-- And according to FuelEconomy.gov i get 18mpg!! So.. :)

I have a 98 Dodge Caravan that needs some work, to say the least. I am interested in this program, and could afford a new car. Does any one know how to sign up or apply for it?

I drive a 20 year old Toyota Camry with 241,000 miles on it. It is a clunker. But, it would not qualify because it still gets 22 miles per gallon. It is really bad for the environment. It leaks several types of fluids and smokes a bit. My car is virtually worthless as a trade-in.
You made a mistake in thinking I can't afford a new car. I don’t need a new car. I would be an idiot to simply walk away from a solid working vehicle. It may be worthless as a trade in, but it has substantial value to me. I set aside $1,500 of my tax refund to repair a few items (but waited to hear of the outcome of the Clunker legislation). The repairs would prolong the life of my car for a minimum of 1 year… much cheaper than a year of car payments with increased insurance and registration.
Add the 4,500, plus my 1,500 repair set aside and incentives (I can use my father-in-law’s retired GM discount) and I get the equivalent of 10 grand. I would buy a new car.
The bill should be expanded to include any car that is over 15 years old or has over 175,000 miles or whose trade in is less than the 3,500 / 4,500. As it stands, the bill is a “Cash for Guzzlers”. It is not for true clunkers. Typical Congress morons.

As a previous poster wrote, my car has a combined avg of 19mpg (of diesel). I wonder if they will make an exception. Another thing i wonder is, if this is supposed to get polluting cars off the road, is there a provision for old diesel vehicles?
The car i would consider trading (although a hard decision) is a 1985 300sd cali-version. It has seen better days and although a great car overall probably would be hard pressed to get more than $1500 for it in the current market if i sold it myself. Until recently with CA budget issues they had their own program that paid up to $1k for cars 1985 and older and diesel vehicles up to 1995 and older. Do you think the final bill might have such provisions for getting older diesels off the road? I will be in the market for a new car at the end of the year so I'm very interested in this bill.

I have a 1998 Jeep Grand Cherokee with 115K miles on it. I lived in England on and off for 5 years and the car was kept in a garage during that time frame. I have waxed it religiously twice a year and have tried everything to keep it in good shape. I live in Florida and the A/C works great. Despite me taking care of the vehicle, the Florida heat caused me to replace the headliner and some of plastic interior parts have cracked. I am a perfect candidate for this incentive. My only drawback will be if the 45,000 M.S.R.P. stays in effect.

Is it possible to get the AirCheck Texas money and the Cash For Clunkers money? Thanks

I suggest everyone contacts their state representatives to complain about this bill. It really should be geared to any car/truck over a certain age (say 10 years) regardless of miles. As several have mentioned above, older cars may/may not be under 18mpg, but they can be damaging to the environment in other ways. If they are hellbent on the mgp issue, at least make it reasonable for car owners, like 20mpg. Very few cars (even old ones) get 18mpg (average of city/highway). Another thing they are not taking into account is that many cars that got more than 18mpg new are now getting less than 18mpg now. How do they handle this issue?

I have an unwanted clunker that qualifies but I don't need a new car nor I can afford one right now.
However, I still would love to get rid of the junk and get $4500 or even couple grand (worth few hundreds but registered and insured)
What will preventing me from buying a cheap new car with the voucher and turn around and resell it back to the same dealer? I could take a hit on the sales tax and resale value even though new car will have 0 mile but I think I could make at least couple grands. Is there a restriction that I have to keep the new car for certain priod of time?