Dan and Tara took advantage of the Cash for Clunkers program, trading in their 2001 Nissan X-Terra for a $3,500 government-backed discount with the assurance that their gas guzzler would be taken off the road for good, as Cash for Clunkers mandated.
So they were surprised to their old jalopy for sale at the dealership a few days later.
The couple cried foul, but it turns out everything was on the up-and-up. The Orange County Register reports:
"They came in for the cash for clunkers, but we went out and looked at the car and decided it's a pretty clean car, so we took the car on a trade-in," said Ken O'Donnell of VW of Garden Grove. "We decided we're going to give them the $3,500 they would have gotten from the clunker program as the trade-in. We're not asking the government for any reimbursement."
Indeed, the feds confirm that the dealership did not seek money for the Nissan under the cash-for-clunkers program.
So fear not, those of you who took advantage of Cash for Clunkers, then think you catch a glimpse of your old ride in your rear-view mirror. That's not a resentful zombiemobile out for vengeance, just a clunker that the dealership eyed and decided its polluting days were far from over.
That's what I don't get. That's a clean looking Nissan. So what it only gets 14mpg. That vehicle looks to have a lot more life in it that can go a long way for someone less fortunate. Take a drive through the dealer lots and check out many of the nice vehicles that you know can't be headed for the junk yard. What a waste.
ReplyDeleteActually, no cars which the dealers got paid CFC $ will ever run again. Part of the program was that the oil in the motor had to be drained and replaced with some additive which freezes the moving parts. Then it had to go, complete with anything that it came with, to the junk yard. $4500 per piece was at stake here, so there was NO chance that they would risk losing that, once they'd credited the seller with it.
ReplyDeleteAnd you're right, 7:34. There were many vehicles traded which had lots of useful life left in them. Sadly in this case, the baby was sometimes thrown out with the bathwater. Way more were true "clunkers" than weren't, though.
A better use of our tax dollars is the 1st time homebuyers tax credit. The housing market is the source of most of our financial angst as a country right now. I hope they extend this program.
Kudos to that car dealership! That was a perfectly good car, that somebody would have wanted. Trashing perfectly good cars is a waste of time, money and materials. I'm just waiting for the inevitable reprecussion of this program in a few months when (not if) employment continues to rise and people start losing their jobs and income. We are going to have a massive amount of people defaulting on their loans for these new cars. Then what? I'dd be will to bet that these people probably bought cars that they probably couldn't afford to begin with, but the dealerships gave them loans anyway because they were so strapped for business. The financiers can't simply repo the cars and break even because (as most SMART car buyers know) the borrower will be up-side-down on the loan since new cars depreciate by approximately 33% as soon as you drive them off the lot. So when the goverment freeloader defaults on his $25,000 (plus taxes, tags and title) Honda Accord, he may have received $4,500 but that car is now only worth $16,500 and not the estimated $20,500 he owes. Now what happens? Bankruptcy? Foreclosure? Failure to pay other financial responsibilities? It will dominoe down and other aspects of the economy will get hit.
ReplyDeleteIf the government were smart (like the smart people that buy new cars the RIGHT way) they would have required the buyer to put an additional down payment on the vehicle that would cover the estimated immediate depreciation. At least this way, we would know that the people using this program are the ones that saved money and chances are haven't been the existing burden on the government before. Every SMART new car buyer knows that you should at least put down a very hefty down payment or pay for the car in full, cash! A new car is the WORST INVESTMENT A PERSON CAN MAKE! You can NEVER prosper off of buying a new car-you only lose! It just goes to show me that our federal government makes poor investment decisions (as if that wasn't already evident). People weren't and aren't buying new cars because they can be considered luxeries, not necessities (In addition to domestic cars being garbage). The general US population was doing the right thing and tightening its belt during these tough times and the feds forced a few to loosen it up!
By-the-way, notice I used a Honda Accord for an example. That's because the program didn't work as intended. We sent the majority of the money from the program over seas and not to US auto makers. I don't blame them-with the exception of a few domestic pick-ups, foreign car manufacturers produce a for superior vehicles! That's why I have nothing but Toyotas in my driveway and always will!
The program didn't work as intended because it was not thought through from start to finish.
ReplyDeleteDealers were signing people up for this program even before the program officially kicked off.
Some had to just rush right out there and buy without knowing all the details. Stupid, stupid, stupid.
I can tell you that not all of those cars have been or will be crushed.
They will have another engine/transmission put in them and will be SOLD.
That's because the checks and balances were not and are not in place to enforce every aspect of this program.