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Cash for Clunkers

The government is tying to spur spending. Obviously there is much more interest in this program than they anticipated.
 
No, this was a top of the line, first string, Ford, new vehicle dealership.

Osahar said:
:confused2: Unless it was a used 'tote the note' lot, it most likely wasn't the dealership's finance company. If a loan company is willing to buy the deal, the dealership will offer the payment to a customer. In this case, it was likely a high-rate group (since his payment is about $150/mo out of whack from the old $20/mo for every $1000 financed estimate - probably in the neighborhood of 20% APR) back when those companies were buying lots of deals. Probably the old "buy-a-bum" system they would sometimes roll out.
Click to expand...
 
I didn't figure it was a tote-the-note lot on a $25k unit with an over 4 year loan. But new cars stores use outside lenders for all their financing. If the customer wants to buy and is willing to sign the paperwork at the lender's rates, that's the customer's problem (and the lender's if they default).
 
The clunker also has to have been rated at 18mpg or less. That pretty much singles out most cars, so unless you have a beater pickup or van laying around not being used the program is useless. Also you supposedly had to have owned the vehicle for 1 year as well as had insurance on it.
 
Mostly correct. WI and NH residents are not required to have the 1 year of insurance since the states do not require registered vehicles to be insured.

Also, depending on what the clunker is the mileage restrictions may vary. The base price (before options or d&d) must also be $45,000 or less for the new vehicle being purchased. The category determination is based on what you are purchasing as a replacement vehicle - but you cannot move up a category from what your clunker is (ie: trade in a cat 1 clunker and buy a cat 3 vehicle). Also, clunkers cannot have a build date more than 25 years old from the date of trade-in:

Category 1 - Cars: Clunker must be 18mpg combined or lower. New vehicle purchased must have at least 22mpg combined. If it's at least 4mpg above your clunker it's $3500, if its 10mpg or more better it's $4500.

Category 1 - Trucks (CUV/SUV): Clunker must be 18mpg combined or lower. New vehicle must have at least 18mpg combined. If it's at least 2 mpg above your clunker it's $3500, if it's 5mpg or more better it's $4500.

Category 2 - Trucks under 8500lbs GVWR w/115" or more wheelbase or Vans under 8500lbs GVWR w/124" or more wheelbase (1/2 ton trucks and vans): New vehicle must have at least 15mpg combined. If it's at least 1mpg better it's $3500, if at least 2mpg better it's $4500

Category 3 - Trucks w/GVWR between 8500-10000lbs with a bed at least 72" long or Cargo Vans w/GVWR between 8500 - 10000lbs (3/4 ton or larger trucks/vans if GVWR qualifies): No mileage requirement as these are not rated for mileage. Trade in must be 2001 or older unit. $3500 voucher.
 
Like usual Osahar thanks for your insight. It's always nice to have someone in the industry to help iron out the misinformation that we get sometimes from the news outlets.
 
No problem at all. Looking at the reporting coming in on Automotive News, the program definitely had an effect on sales for the month. Question is, what will it do to sales going forward now that a lot of dealers blew through their inventory and have little left.
 
My parents used the Cash for Clunkers program this past weekend, I was told. Couldn't have happened to better people...yes, they are responsible and have taken care of their finances and know what they can afford for a car. They haven't bought a new car in something like 20 years...this was just the incentive that helped, and I bet it helped the dealer, too, ma said the lot was full of people :smile:

I've heard people say the program is so full of red tape that you shouldn't expect your money...she said it fast and easy. So I'm happy for them.
 
Nah, for the customer it's easy. It's the dealerships that are having a hard time with it. The claim process requires a lot of documentation. Out of the 57 dealers I have, I didn't have one get a voucher claim accepted until yesterday. It's getting easier as they get more used to the program and have a few rejects come back to figure out what is missing/scanned too lightly/etc.
 
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