brief thoughts on cash for clunkers
Well, first of all I have a clunker. A minivan to be precise. It is rusty on the top, and though it drives fairly well in town, our mechanic recently warned us not to take it out of town. So we went to look at some new cars when this cash-for-clunkers scheme was hatched, because there’s no way we could sell that thing for $4500. A few thoughts:
First, cars are too expensive. Basically all the “basic” models were sold-out by the time we got there. So the Honda Civic advertised at $7999 after discounts and the government rebate – well, there was nothing even close. The lowest we could get anything was about $14,000.
Second, cars are too fancy for the regular buyer. These cars are all chalk-full of extras: Blue Tooth; storage organizers; plush interirors; stereo-systems; fancy bumpers; computers and navigation systems. I don’t want any of this stuff. I want a car, damnit. One that runs and doesn’t cost me a fortune. Preferably one that isn’t so computerized as to be almost entirely inaccessible to a mechanic or tinkerer without a diagnostic computer. I want durability.
Third, this program’s success speaks directly to the price and fanciness of new cars these days. If car companies want to sell more cars, they need to start selling more cars that are at least $4500 cheaper. Basic models with no frills, brand new off the lot for six or seven or eight thousand dollars. They don’t need to be super fuel-efficient, though that wouldn’t hurt. (I’m all for bringing back diesel, myself.) If car makers want to see their numbers go up, they need to manufacture cheaper vehicles. They won’t always have the government around to offer cash for clunkers.
I think we’ll just go buy something used and sell our P.O.S. to the highest bidder. A friend of ours recently went out and bought a 95 Civic because it was pre-computerization and he wanted something he could work on himself that got good gas mileage. Unfortunately it doesn’t have AC. And he lives in Phoenix, AZ.
Note: I never considered an “American made” vehicle at any point and still don’t. Both my current cars are “American made” and they’ve convinced me to go Asian this time. We’re thinking Subaru for the AWD. That’s another point that can’t be made enough – not only are these cars too expensive, they’re often far less reliable than they should be. Back to the basics!
The Subaru will hurt you on gas. You’d be better off buying a cheaper Toyota or Honda SUV and getting more room for the same weekly gas price. I have a Toyota Rav4 and love it.Report
I don’t know. We want something affordable that can handle the mountains and the snow. Because we live in the mountains and it snows a lot. I’d take any of those vehicles, actually, but they have to be in my meager price range.Report
E.D. nice blog. If you want cheap wait a few months, the Chi-coms will be sending their cars over for about $6-8 thousand maybe? You’re right, I needa engine, tranny, rearend, heater, radio, and maybe AC. Wife wants a Subaru Forester!
Ask the American Auto Union membership how that Obama thing’s workin’ out for ’em now!Report
Thanks, Bob. I think the auto-unions need to look in a mirror and then look to the boys upstairs. American auto-makers could have been making affordable, reliable cars years ago and they wouldn’t be in the shape they’re in.Report
Yeah, it’s pretty sad. I have a lot of friends working at Lordstown making large green and they never figured it out, how someone making $50k/yr could buy a car made by folks knocking down $100k/yr.
Well, the golden goose is deader than hell now!Report
For what it’s worth, while perhaps not what you might call “affordable”, Ford’s Focus and Fusion are generally well-respected models. The Fusion, in particular, regularly wins best in class awards over its various foreign competitors.
That said, I just got a Jetta. It cost way too much, but I love it.
I have no advice about snow/mountain vehicles, though.Report
Mike at Big Stick, how you like that Toyota? How’s maintenance, gas mileage, ect.? We’re looking…maybe used. I gotta Chevy Blazer I’ll sell you cheap!Report
I love my Rav4. Decent mileage (for an SUV). Plenty of room for the kids. Looks sporty. Handles well in bad weather (ours is front-wheel drive only). The rear seats are a snap to take out and it gives you tons of room. I’ve had all kinds of stuff back there including a deer and all sorts of hunting gear.Report
If the government were not demanding that the “clunkers” be destroyed (and would, instead, permit junkers to disassemble them maybe… take out the transmissions, rebuild them, etc), I’d see C4C as merely a bad program that took money from everybody and redistributed it to random people. Since decent cars (wealth) are actively being destroyed? Oh. OH! Don’t get me started.Report
They’re getting rid of used cars and banning used kids books. Seems a bit fishy to me.Report
Welcome to the New Tomorrow!Report
Forget using the C4C program. Donate your junker to a non-profit (many will take them) write it off for $4500 and use a car broker to find the exact model you want with the particular extras you want. It works, I’ve been doing it for twenty years and in that time have had four new vehicles (two for me, two for my wife) They have been Toyota pickups and Honda Civics purchased for way less than a dealer would offer. BTW, I think the Forester or other 4WD is better and safer than AWD.Report
Thanks for the tip! Actually, yes, we’re looking at a Forester. So…4WD is what I meant to say. I’ll know for sure within a couple days (I hope) if this particular deal I found is as good as it seems….Report
Actually, this no longer works. The Feds changed the rules a couple years back so that you can only deduct the amount for which the charity sells the vehicle.Report
Yes, I just did the googling necessary to discover this. Thanks….Report
I’ve donated two cars to Goodwill and got BlueBook before they changed the rules on the program. Even then you still don’t often have enough deductions to make it worth it to itemize over the standard deduction. I recommend just selling it on your own. You can always get more with a private sell than a trade-in. Hondas have great re-sell. My Civic went out the door pretty quick. They’re great first cars for teens and they can pimp them out all day long because of all the after-market stuff made for them.Report
Unforunately, the government changed the amount you can claim for your car donation in 2004. Now, you can only claim $500 or what the car sells for, whichever is greater.Report
Optional 4WD drive will save you a lot of money over AWD. That’s one drawback I’ve seen with Subarus. The new Forresters are pretty much just SUVs now. I liked the older body style a lot. The cargo room was fantastic.
The Toyota Matrix is a really nice car too is you’re in the Forrester range. The only thing they don’t have is the 4WD.Report
Thanks all for the tips, very useful!Report
So you want, $2/lb cheese, but won’t settle for anything except Gruyère and Brie. Thank God I don’t sell cars anymore.
Roughly 15 mil cars are purchased a year. People buy a new car on average just short of every 3 years. Car companies are worried about the 20-40 million households that can afford a $16,000-$45,000 vehicle. There are over 120 million households in this country. For those keeping score at home, the top 20% are driving the feature matrix of vehicles, not average Joe.Report
And how are the car companies doing these days anyways? Seems to me their price-point is a tad bit off….Report
I suppose you are going to argue the same for the RV manufacturers. The actual economics are that small cars don’t make money. The big expensive rigs make very good money. The doo-dads make very good money. AWD and 4WD are high margin items that you just “needed.”Report
I’m not arguing against choice or the possibility of being able to decide between Car A and Car B. My point is that the drift has been away from a sensible low-budget no frills Car A in favor of even basic cars having way too many frills. Nor am I arguing for “small” cars only. I never said any of that. I never said I was arguing for fuel-efficient vehicles or anything of the sort, though that’s obviously not a bad thing (and diesel seems like it might make a comeback for that reason). I’m just saying that it looks to me like a cheaper price-point, reliable, durable, but very plain and basic vehicle might actually sell very well. Indeed, even if it were a truck that was just very basic but cheaper than the ridiculously priced trucks out there today. I’ve spoken to lots of people about this actually. I was just talking to my brother in law who is a truck-only sort of guy who thinks all the frills they attach to trucks these days are absurd.Report
This is why the old used cars must be destroyed.
Keep them from flooding the marketplace and make it so that the poor who cannot afford a new car still cannot purchase a better used car than the one they have now.
Order Must Be Maintained.Report
“Preferably one that isn’t so computerized as to be almost entirely inaccessible to a mechanic or tinkerer without a diagnostic computer. I want durability.”
But part of the reason that new cars routinely get more than 100,000 miles before breaking down is that the computerized systems are actually more reliable than the old systems. Sure, you can feel good about tinkering with your carbourator in the driveway. But you are going to be doing so a few years before I have to have my fuel injector checked by the computer.
But I am right with you on fanciness. I think there is a mint to be had in re-releasing, say, the International Scout. Sure, yes, use some metal which will not rust out after a year (the Scout’s Achilles Heel) and do make some basic upgrade in other materials. Use a lighter material for the block, get some better milage, etc.
But do you remember the Scout? It came, often, with sheet metal seats. It was bare bones across the board. It was loud. Etc. But man… it was sweet. Look at one. It resemble a brand-new Land Rover.
Using the same design and saving on those costs, relying on the retro-cool, etc, it would seem one could be sold at a profit for something like $9,000.
Screw the 12 cupholders and give me a car that WORKS.Report
http://www.youtube.com/watch?v=Qh8zIcJKrXs&feature=PlayList&p=37C5755308133826&playnext=1&playnext_from=PL&index=6
More truth to that than what anyone cares to admit.Report
When I first heard it on the radio, I was excited, but I thought they said — Cash for Drunkards.Report
As with most government programs, the success of the “cash for clunkers” program is not measured in how well the consequences of the program align with the stated goals of its advocates. Nor is it measured by any economic impacts the consequences might cause. Instead, just like the example of the public library in George Dance’s recent article about Booze and books, the success is measured by participation or usage, not by any measure of the value provides or harm it does to our economy. The trick is to define the program specifically so that it has a known demand so the usage is high. Media spin and politics will make sure the right people hear the program was successful and beneficial. I heard a bit on NPR just today about the downstream benefits that recycling all these old cars has. Ridiculous of course, but the perception amongst the voters is far more important than the actual results and consequences. Certainly there will be follow-on programs, cash for major appliances, cash for tools, etc.Report