The continuing Cash for Clunkers saga...

Now dealers are running low on saleable cars. Ford is almost out of Focus's. Toyota out of Priuses.

On the borrowing and prosperity argument, I am reminded of Robert Kiyosaki's definition of good debt and bad debt. Good debt is a loan that produces a stream of income. Buying capital equipment or cash flow producing rental property fall into this category. Bad debt is a loan that costs you money and returns nothing. New cars, big screen TV's, and much the stuff people accumulate on their credit cards fall into this category.

Borrowing to so that you can increase your productive contribution to the world can make you prosperous. Borrowing to buy toys or a life style that is beyond your means will make you poor.

I disagree... The big screen TV at the hotel last weekend helped me produce a LOT more after watching the $5.99 special.

Type Q wrote: Borrowing to so that you can increase your productive contribution to the world can make you prosperous. Borrowing to buy toys or a life style that is beyond your means will make you poor.

That paragraph sums up what is wrong with America right now, financially and economically speaking. Unfortunately, most people fall into the second category.

Agreed. And those in the first category will always have to pay for the stupidity of those in the second category.

I've seen this alot. My wife asked if we were able to use the CARS program for our upcoming (cash) purchase of a newer car for her. I told her no as we would be buying used and her 180,000 mile 98 Accord gets way too good of mileage (as does my 212,000 mile Miata) for the program.

Another example, while visiting our friends in San Diego I talked to three different friends who were going through short sales. All were fully capable of paying their mortgage, but wanted a bigger place and figured "why throw good money after bad." One couple was even going to take advantage of the down market and go right out and buy another place using the the wife's credit since the short sell was for the husband's condo which he bought before they were married so it only dinged HIS credit. Can you say $100,000 free money (free for them maybe). Meanwhile my home value goes down as a result... thanks alot!

A couple nights ago our local NBC station ran a story regarding the Cash for Clunkers program. One thing stood out:

There's a lot of signage and supplies (like the sodium silicate stuff) that have that CARS logo; posters, inflatables, etc.Most of us can imagine that a program like that with all the E36 M3 doesn't happen overnight. Wonder who's developing /selling this stuff, is there a government agency that is doing it?

Also the program states that the car has to be registered and I guess to have been driven in the past year. While they were pouring the Official CARS Sodium Silicate Engine Death Potion into the Sacrificial Chevy Suburban (about an '86) for the benefit of the cameras, they showed a shot of the windshield and the PA Inspection sticker. It was March of '08, so I would surmise that the car really hadn't been legal, now had it?

Also since one of my customers couldn't get any of the Official CARS Sodium Silicate Engine Death Potion, they just used NAPA Block Sealer. Works just as good.

Just don't tell Obama.

Here's a few examples of what people have been trading in and purchasing in return.

http://finance.yahoo.com/family-home/article/107474/what-i-got-with-cash-for-clunkers.html?mod=family-autos

SVreX wrote: Please explain. "...extra work for for a lot of people in a lot of related fields..." As I previously stated, there isn't any reason to believe selling old inventory creates jobs manufacturing new product. Are you seeing something different?

Is it really just a case of moving old inventory? In MA, I read that some dealers can't get their hands on enough cars to sell.

Regardless of politics, it's getting people to spend.

I just wish my wife's CR-V qualified.

Well, no it may not be only moving old inventory. Have you seen any reports of stepped up manufacturing because of this? I have not, and though I doubt they will ever exist, I am prepared to be wrong on this one.

Anybody seen reports of increases in manufacturing from ANY manufacturer in response to the CARS program?

In the 2 weeks the program has existed, I guarantee no one has hired extra people to build more cars.

Note, Gamby, that your original quote suggested jobs specifically related to the auto industry and related fields, not jobs for Washington paper pushers, auto recyclers, or engine destroyers.

Note, "old inventory" does not equal "outdated inventory". Many of these cars are current model years.

But they are still not new cars, and do not increase future demand. In fact, CfC may decrease demand for new cars in the foreseeable future.

I used the wrong phrase. The correct one would be "overstocked inventory" which is the phrase I initially used (on page 6 of this thread).

But the semantics don't matter. The point was they are cars currently sitting on dealer's lots, and they do not create jobs for autoworkers or related suppliers or vendors in the process of building new cars.

CfC is stimulating auto sales for existing inventory. It is not helping to stimulate auto production. It will help the books for the manufacturers in the short term (who overbuilt and had too much money tied up in inventory), because it will get the debt incurred for building this existing overstocked inventory off the books. But it will probably not have a positive effect on future profits, as sales will likely be down, and production will certainly be down.

Wellllllll....not so fast...

"Clunkers success boosts auto production as suppliers ramp up" http://www.autonews.com/article/20090805/ANA02/908059979/1176

I'll go along with the argument that CFC may still do little for the long-term, but for at least the short-term, it does seem to be helping with production and suppliers, as well. I suspect that Mfrs that are still on the fence will ramp up production with the newly added $2B.

Edit: Ok I don't know why I could read that article from a Google link, but not directly from a cut and paste, so here's a link to the Google page- it's the first article listed: http://www.google.com/search?q=clunkers+toyota+production&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a

mel_horn wrote: A couple nights ago our local NBC station ran a story regarding the Cash for Clunkers program. One thing stood out: There's a lot of signage and supplies (like the sodium silicate stuff) that have that CARS logo; posters, inflatables, etc.Most of us can imagine that a program like that with all the E36 M3 doesn't happen overnight. Wonder who's developing /selling this stuff, is there a government agency that is doing it?

I would guess that print shops/ad agencies can make signs such as these happen overnight... for the right price.

The car is officially demonized. Catchy graffiti on $4500 "clunkers". It's not a big deal, like world hunger, but this is a car enthusiast site, so it bears discussion. What's next? Will the government force GM and Chrysler to end development of certain vehicles? I don't know about you, but I can't shoehorn my family into a Prius. Or perhaps your non-sub, sub compact vehicle choice will be forced to wear a bumper sticker that says: Environment Czar Warning: This Vehicle Is The Root Cause of Global Warming And "Clunker" is a buzzword now. Soon the term will be combined with other words to form new cliches like Clunker Free Zone, or Clunker Diplomacy.

All of this is political payback for campaign contributions made by the same folks who burned Hummers on new car lots.

Yeah, that was good for the environment.

I don't want to get involved in the larger view political discussion, but on an individual level, this is a hell of a deal.

Yesterday, I indirectly took part in this, as I helped my girlfriend's parents pick out and buy a new car to replace their "clunker" qualified 1 owner, 206k mile 1994 Nissan Pathfinder.

After many test drives, they walked out with a 2009 Mazda5 Touring automatic (which qualifies as a truck!??!?!), so they got $4500 for the Pathfinder (which was realistically worth $500), plus rebates from Mazda, they paid $15,200 out the door with taxes and everything (MSRP was $21,700).

They would not have bought a new car now if not for this, as the Pathy ran and drove great, and they planned on keeping it until it was really dead, but couldn't pass up the government offering them $4500 for it.

Sonic wrote: I don't want to get involved in the larger view political discussion, but on an individual level, this is a hell of a deal. Yesterday, I indirectly took part in this, as I helped my girlfriend's parents pick out and buy a new car to replace their "clunker" qualified 1 owner, 206k mile 1994 Nissan Pathfinder. After many test drives, they walked out with a 2009 Mazda5 Touring automatic (which qualifies as a truck!??!?!), so they got $4500 for the Pathfinder (which was realistically worth $500), plus rebates from Mazda, they paid $15,200 out the door with taxes and everything (MSRP was $21,700). They would not have bought a new car now if not for this, as the Pathy ran and drove great, and they planned on keeping it until it was really dead, but couldn't pass up the government offering them $4500 for it.

Socialist.

SVreX wrote: Anybody seen reports of increases in manufacturing from ANY manufacturer in response to the CARS program?

http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSN0329668920090803?pageNumber=2&virtualBrandChannel=0

That's a pretty damn good by-product.

gamby wrote:

SVreX wrote: Anybody seen reports of increases in manufacturing from ANY manufacturer in response to the CARS program?

http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSN0329668920090803?pageNumber=2&virtualBrandChannel=0 That's a pretty damn good by-product.

Once again facts trump internet conjecture.

ignorant wrote:

gamby wrote:

SVreX wrote: Anybody seen reports of increases in manufacturing from ANY manufacturer in response to the CARS program?

http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSN0329668920090803?pageNumber=2&virtualBrandChannel=0 That's a pretty damn good by-product.

Once again facts trump internet conjecture.

Communist. Reuters is a liberal mouthpiece.

As I said earlier, I was completely prepared to be wrong on this one. I was just asking if anyone had seen any articles stating production was ramping up.

Glad to see it is.

Or MAY be:

Toyota, General Motors, Ford and others are hastily boosting -- or considering doing so -- third-quarter production schedules within days of a late-month surge that pushed the July U.S. auto sales rate to its highest point this year.

This little jewel might have been just a tad out of line:

ignorant wrote: Once again facts trump internet conjecture.

SVreX wrote: As I said earlier, I was completely prepared to be wrong on this one. I was just asking if anyone had seen any articles stating production was ramping up. Glad to see it is. Or MAY be:

Toyota, General Motors, Ford and others are hastily boosting -- or considering doing so -- third-quarter production schedules within days of a late-month surge that pushed the July U.S. auto sales rate to its highest point this year.

This little jewel might have been just a tad out of line:

ignorant wrote: Once again facts trump internet conjecture.

The production schedule increases are highly dependent on the product. I can tell you with certainty that a certain diesel engine maker has seen little to no increase from a certain sheepish truck manufacturer.

And that comment wasn't directed at you.. Its more of a phenomenon that happens on the internets, the conjecture spirals out of control and then bam, nothing comes to fruition. I'm guilty of it as well.

Okey Dokee.

As long as we're both guilty, then everything is cool.

SVreX wrote: Okey Dokee. As long as we're both guilty, then everything is cool.

THAT"S RACIST...

Not all Oklahomans are dokee.

All I know is the used car market is now being driven up. I was finally going to spend real money on a used car for once, but now the price has been driven up higher than I'm willing to pay. KBB is still right on and that's what I value the car at, but the market is now being pushed up by all the people who don't qualify for C4C but still want a car.

"Sorry your 1979 Caprice doesn't qualify for the program, but we'll give you $3000 in trade-in for it and get you a low monthly payment of $250 (for 72 months @ 9.5%) on a nearly new Kia....."

Guess I'll just wait a year for all the repo'd cars to hit the market.

TIM I found another post I want to checkmark to elevntybillion that your stoopid system won't let me!

One vote per person. The way it should be.