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Senate Vote on Cash for Clunkers Funding Needed Today
According to a post on The Detroit News, the Senate is expected to vote on the Cash for Clunkers supplemental funding measure Wednesday or Thursday. Since Friday is the last day before the Senate summer recess car dealers are biting their nails and unsure of how to play out this week as their showrooms are active with Cash for Clunkers shoppers.
On Sunday, Transportation Secretary LaHood said that sales made on Monday and Tuesday would be honored. However, when the NHTSA was pressed yesterday on a teleconference with the National Automobile Dealers Association (NADA) no one would confirm if sales would be safe to submit this week.
No Clarity After Today
If the Senate does not take up the measure today, the NHTSA or the Obama Administration will need to make a statement to give clarity on the current operating status of the CARS program.
Dealers are growing wary of the emotional roller coaster they have been on for the program. Long hours of data processing throughout the night is keeping dealers on edge and groggy.
For dealers who have completed 100 Cash for Clunkers transactions their CARS liability would be approaching a half a million dollars. Dealers are unsure of how much more they can stick their necks out without being assured that their further sales will be reimbursed. One dealer calling in yesterday said that they were not sure the program was worth all the additional aggravation and staff needed to manage and submit the required paperwork.
The CARS program is controversial as many consumers argue that the program should never have been approved in the first place. Consumer comments on blog posts, videos and news websites clearly indicate that the progranm has been divisive in spite of its popularity.
One consumer known by his username of ”Ohio Greg” commented on this website to say:
“There doesn’t seem to be a media outlet that can just spell it out…
Lot’s of people like the CARS program because it’s free money, and the government’s implementation is, at best, a major cluster-foxtrot.”
Greg must be referring to a variation of the “Foxtrot” often demonstrated on Dancing with the Stars now called the “Cash for Clunkers Foxtrot“.
Consumers Seek Confirmation
Consumers are frustrated; comments on SPEAK UP forum is required reading to see the scope and variation of consumer experiences. Consumers want to know the exact status of their previously completed CARS sale and the local dealer’s hands are tied.
Dealers are being bombarded with questions whether deals have been approved but right now consumers are being greeted with silence. Dealers have nothing more to report other than that the sale was submitted and they are waiting for NHTSA approval. Dealers would like to help but they are caught in the middle of a complex submission and approval process.
A vote today would keep the Cash for Clunkers momentum going and give dealers and consumers some breathing room to continue the program through Labor Day. Our prediction is that if the additional $2 billion is approved, it will fund the program into Labor Day Weekend. Hopefully this month the NHTSA can get all dealers online and caught-up with process.
CARS Represents Pain and Pleasure For Dealers
For some, the CARS program has been a tremendous boost to their local economy and store sales. Dealers have reported that floor traffic matches some of the best numbers seen from over two years ago. For others, the dealer registration process has not been smooth and has put a damper on any excitement.
As of yesterday, dealers were telling us that they still cannot enter their first sale into the NHTSA system because the dealer ID and password was incorrect. One Massachusetts Nissan dealer whose login still is inactive said that they had no choice but to stop taking Cash for Clunkers sales this past Saturday.
28 responses on “Senate Vote on Cash for Clunkers Funding Needed Today”
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@sellcars: look at it this way, if it wasnt for cash for clunkers you would have not made those sales. Which translates to: No sales No commission your going to starve anyway.
@yogi your car qualifies, just go to another dealer. use this link below to learn more about your minivan
http://www.fueleconomy.gov/feg/CarsSearchIntro.shtml
yogi: Find your 1992 Dodge Caravan at the link below.
http://www.fueleconomy.gov/feg/findacar.htm
All your questions can be answered on the cars.gov website. Stop beating yourselves up with the whats and whys and get your clunker traded in. If one dealer doesn’t want to do your “deal” another one will. This is not “free” money it is a “tax free subsidy” like the government gives every year to farmers, and airlines, and banks, and utilities, and- you get the idea. So get out there and get your car(s). Follow the instructions on cars.gov and you cannot fail; I am driving my first new car in 15 years thanks to this program and some elbow grease. Peace.
You have to give chance to every one. Lotpeople are not happy because dealers are consider min van a truck insted of family car.
My car is Dodge carvan 1992 , Dealer is consider as a truct my car is not qualify. please clarify this issue because it is not fare to medium class family person that we can not buy new car due to Govt program is not clear.
please clarify asap.
when obama first mentioned “cash for clunkers”, he was really referring to overhauling medicare.
In response to:cashforc says:
August 4, 2009 at 9:33 am
Here are a few unknowns:
1. Does the program backlog scare off dealers. Will dealers slow down deals until they start to get paid.
Yes it does. I don’t get paid on my deals until my dealership gets the reimbursement from the government. While the sales taxes may be helping the econony and the demand is helping the factories, those of us that work on commission may starve soon.
Commentary: Cash for clunkers is a clunker
Why “Cash for clunkers” is flawed as environmental, economic policy
Link: www .cnn.com/2009/POLITICS/08/03/miron.clunkers/index.html
I think the Program is great for the economy, the auto industry, the consumer and the environment. It will stimulate the economy. The NHSTA is to be commended for bringing up the Program with little forewarning.
We took advantage of it the 2nd day it was in effect.
Like any government program, Cash for Clunkers is good for those who can take advantage and not so good for those who cannot take advantage.
Questions:
After this program ends, what happens to sales? Will people who were going to buy a car under the program but for some reason fell through the cracks come back to buy the intended vehicle?
Did the program generate enough traffic at dealers to get consumers interested in buying new vehicles?
Will people like me, who had only planned to buy a new car if they had a vehicle that qualified (mine did not qualify) eventually look to buy a new car? In my case, if my car had qualified I was going to buy a new car. My car did not qualify, so now I’m holding out with my old car and planning to buy used in two years.
Personally I think the program is creating an illusion of demand. Once the program ends sales will plummet and dealers will once again have a lot full of new cars they cannot sell.
Rafael -> “do I have to report that money as income?”
QUESTION:
IS THE CREDIT SUBJECT TO BEING TAXED AS INCOME TO THE CONSUMERS THAT PARTICIPATE IN THE PROGRAM?
ANSWER:
The CARS Act expressly provides that the credit is not income for the consumer.
Source: cars.gov FAQ
How this program will effect your Federal Income Tax. Is that money given to customers a freebe, or do I have to report that money as income.
Most of the people complaining and criticizing the program are those who don’t like any government program and jump at the chance to voice their tired and repetitive negative opinions. The program is a handout only taken at it’s most superficial level. If you allow yourself to look deeper it is pretty easy to see how it will have a positive effect on the economy. I took a 32% paycut last november and have not recouped any salary since. We had to cancel a car order when that happened. CARS will allow us to replace our 17 year old car with one 3 times cleaner and 3 times more efficient and probably a 100 times more reliable.
There probably needs to be a different program to help lower income folks get away from their clunkers. As someone stated below CARS as currently designed does not help them, but then again that was not it’s purpose.
This program was a Godsend for my family. I was driving a 96 Lumina minivan with 160k miles that was definitely on it’s last legs. When the CARS program was announced in late June, I started doing my research on new vehicles. Some manufacturers and dealers were far more motivated to move their inventories than others, so I did several side-by-side comparisons on Edmunds and started crunching numbers. I got my financing approved in advance and most of the documentation I needed to satisfy the dealers that I indeed qualified for the program. When the final program rules were published on July 24, I had to rush to get an additional document from my state bmv. The BMV was overwhelmed with requests so it took a few days to get this. It was probably not a good idea for the rules to come out on a Friday, since most state offices are closed over the weekend, so by the following Monday they were crushed with calls.
With all my documents in hand, I was able to get the deal done on Tuesday. With all the incentives I received from the dealer, manufacturer, and the CARS program, we saved $8500 on our new vehicle purchase. People can criticize this program all they want, but I feel very fortunate that this program came along when it did. The timing was right for us and the savings motivated us to purchase a new vehicle rather than trade in our clunker for a late model used car.
purchased car with clunker on Aug 2. dealer told me that they could not discount price because I’m using the cash for clunker program. I asked dealer if I negociate car first, and told you about clunker, would you change the price from the discount? Dealer said “YES”. You can not get discount if you use the clunker. Is it legal?
September is soon. 2009 model price will be drop some. for someone trade in value is at least 2000, do not use clunker program. With all the help from the government, dealer only complains about more paperwork. That is like giving can food to some needed person and the person complains about the can is not opened. LOL
For Serena, cars.gov updated info
In addition, because New Hampshire and Wisconsin do not have an insurance requirement under State law, trade-in vehicles registered in these two States are exempt from the one-year insurance requirement.
Serena -> “…and no proof of insurance, since Wisconsin at this time doesn’t require insurance at this time.”
The regulations were amended last week for states that don’t have an insurance requirement:
“..because New Hampshire and Wisconsin do not have an insurance requirement under State law, trade-in vehicles registered in these two States are exempt from the one-year insurance requirement.”
Source: http://www.cars.gov/files/amendment.pdf (see page 6)
And for what it’s worth, I agree with you about the 6 month ownership requirement. You aren’t the only one caught in that trap.
Cash for clunkers may be good for those with large or medium income, but it is hard for a person such as I that has low income and has bought a vehicle in Feb. that is a clunker to replace a clunker. Should make the stipulation at 6 months instead of a year for ownership and no proof of insurance, since Wisconsin at this time doesn’t require insurance at this time.
Let’s stop and take a breath. The Government has the guts to fund a program to help the car dealers get rid of their inventory and show those dealers that cars with good mileage can be popular and they may fill some of their new inventory with vehicles that have good mileage. It takes a small step in increasing the over all MPG which I am told is significant in reducing dependence on foreign oil. And it gives us consumers a break. The fact that it was so successful is something that could have been predicted but that is not how the Government works. I am confident that the Senate will step up today and fund the program but when they do I am not confident that the money will last much past August. The American consumer wants nothing placed in the way of them (us) getting what we want NOW. Everyone just relax and think over your decision to buy a car, there is still time to get that yellow two door that you drove when you were 17. Seth Watterson
We agree that the additional funding will not last long and that Labor Day is the outside window if the NHTSA gets caught up soon.
Here are a few unknowns:
1. Does the program backlog scare off dealers. Will dealers slow down deals until they start to get paid.
2. Most car dealers are under tight cashflow restrictions and going out $300,000 + to the Federal Government is not comforting for most. Does floor plan financing slow deals?
3. We also see that Chrysler is pulling their “double rebate” campaign which may slow down Chrysler sales. Will other manufacturers start to reign in rebates and reduce demand while they restock popular cars?
4. Is the pent up demand starting July 1st an unrealitsic yardstick to use to measure August sales?
The $3 billion will never last till Novemeber 1st….and not likely more than 4 weeks. A big Labor Day car sales weekend can drain the keg for sure.
We need to get a feel for the backlog from the NHTSA to nail down a better projection.
Some dealers of the 20,000 have opted out because of all the paperwork so its hard to tell.
Editor -> “…if the additional $2 billion is approved, it will fund the program into Labor Day Weekend.”
I’ve posted my own calculations before (which may very well be incorrect) and I don’t see how CARS survives another 10 days…even WITH $2B in added funding.
Here’s the way I’m looking at it if the funding comes through…
…$3,000,000,000 of total funding
…20,000 registered dealers
…$4,000 average CARS voucher
That boils down to 38 vouchers per dealer. Let’s assume the average dealer has done 18 deals so far (about 2 deals per day). That leaves every dealer with 20 vouchers. If each dealer continues with just 2 CARS deals per day, the entire $3B will be used up within 10 days.
That’s my perspective. How are you guys seeing it unfold?