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Senate Votes on $2 Billion Clunker Funding
CBS Channel 2 News in New York is reporting that Senator Harry Reid is not only saying that there are enough votes in the Senate to pass the $2 billion funding extension for the Cash for Clunkers bill but that the vote will take place today.
Thursday August 6, 2009 looks like the day which will give car dealers some financial stress relief. As we listened to the CBS Channel 2 news on Wednesday night at 11:00 pm, the newscaster added a very interesting statement.
He said that the additional $2 billion in funding would keep the program running through Labor Day.
We agree with CBS 2 News in New York that the $2 billion is only a stop gap measure to fund the program through August. When you do the Cash for Clunkers math and factor in the pace at which consumers are buying cars, the Labor Day weekend may be the last hurrah for the CARS program.
Since the vote and approval seems certain to take place tomorrow, we turn our attention to September when funding once again will be exhausted. We also encourage consumers to heed our warning; get out and shop for your new car or truck in August.
Do not count on the Cash for Clunkers bill having money in September.
If you would like to have a local car dealer contact you about your qualifying clunker and new car purchase, complete the form on the left.
NHTSA Needs a Firm End Date
We urge the NHTSA to consider setting an “pause date” for the CARS program since we don’t know if the NHTSA can clear the backlog in 1-2 weeks. By setting a “pause date” dealers and consumers will have a date certain to make sure they complete their transactions on time. After the pause date, the NHTSA can process all sales, send out reimbursements and then come back with a report of remaining monies and present the CARS trade-in data to Congress.
Since the CARS system has inherent delays for approving sales, the NHTSA will never be able to know when funds actually run out and stop dealers from taking new sales. Setting a “pause date” makes more sense, even if they have to be a little conservative in estimating the date.
More Money in September?
Will the House ask to draw from the “stimulus well” after the August recess to continue the CARS program? Some consumers feel that of all the stimulus programs approved, that this may be one of the few that is actually working and one that is measurable by the average consumer.
Tell us what you think below.
18 responses on “Senate Votes on $2 Billion Clunker Funding”
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Scott, do appreciate the sentiment but I sense that your more spun up over being, apparently, left on the outside of the dealing than you are informed.
1) You can buy a new Nissan for $11,090 +tx/ttl/doc less $4500 if qualified. So that’s well below $10K. Not 20. And it is NOT a tax credit. It is essentially cash.
2) The concept that politicians can “make [a] program that ALL people can benefit from” is the Holy Grail of politics. Never gonna happen.
3) Pre-owned cars are “recycled” merchandise. Auto manufacturers and their supporting cast of thousands have no comparable direct benefit to an asset that is already circulating in the market. New sales are an essential element to this stimulus.
Why is this program only for NEW cars, which most of the normal working people cannot afford? How about the politicians get off of their asses and make this a program that ALL people can benefit from. After all the poorer people pay taxes just as well as the middle class and rich dont they? But they cannot afford a $20,000 car! Plus its only a TAX credit, how about a real discount, based on ones income?
Nearly 6 PM Eastern. Senate remains in session and is role-calling a procedural vote on Harkin’s motion to table his own amendment (salary cap). H.R.3435, it appears, will see a vote this evening. Also seems that all amendments will be voted down as they will likely cripple smooth and timely program continuation — as the arguments have been duly presented.
I predict the bill will pass and be on the president’s desk before midnight.
I am also of the opinion that NHTSA has the authority to “effectively” administer the program. As such, the desired pause and, accordingly, beefing up of the data infrastructure as well as human resources to keep pace with the dealers sales rate should be within their jurisdiction. Otherwise it is like a donkey chasing a thoroughbred at Santa Anita. We shall see.
Pausing the program would be good for the public consumer. Give the dealers time to replenish their inventories with the more efficient vehicles and maybe even get some 2010 models in inventory.
This would also give everyone a rest period to get ready for the next round..
I thought this would be a good deal at 1st to. I am disabled and am driving a 1991 Dodge Dynasty that was struck by a hit and run driver, while my family was taking me to one of my many doctor’s appointments. But my car which is held together by so many of God’s angels that I’m not sure how many are left in Heaven is not old enough. The radiator leaks so bad we have to add water into it on every trip we take even just to chuch(7miles). The tires are all uses may-pops cause that’s all I can afford. I thought this program was for the big car company’s to pay back some of the millions of dollars that was given to them in the bail-out. So how about having these guys donate a few cars to some of us that really need it! I live 125% below the poverty level. I do not us credit cards. And so far I have not had to go back on food stamps,Yet! Since finally getting off them almost 7-10yrs ago.(Sorry, Brain Injury, can’t remember #’s anymore.) But I have began raising livestock in my backyard to feed my family. I can’t afford the insurance that goes with a new car. I verily can afford liability on the vehicles we have.
That would be making the auto industry accountable for their part of the “Thank You” they need to give to the American People for the bail-out that we will eventually have to pay for.
“As of Thursday morning, there were several proposed amendments to the Senate bill, including one from Sen. Tom Harkin (D-Iowa) that would limit the provision of vouchers to individuals with adjusted annual gross income of less than $50,000 or joint filers earning less than $75,000. The amendments appeared likely to be voted down.”
For those of us who do not qualify and need a new car you are in trouble. Not only has the inventory been depleted, the power has shifted back to the dealers who are charging premium prices, above MSRP, with not incentive to negotiate.
I orginally thougth this program was good but now think the ‘below 18mpg’ trade in qualification is a flaw that unfairly eliminates a portion of the population. It should have been a running scale base on trade in mpg vs. new car mpg, incentivising everyone to move up to better fuel economy cars.
It absolutely should continue for a lengthy time, even after the 2 billion is gone.. It is finally a program for the people and shows immediate feedback to the economy.. If we could take back all of the money given to the banks and do a redo, we could use this as a model for other programs to actually stimulate the economy and not stimulate bonuses for bankers. It is helping the environment, helping people to buy cars, helping car salesman, helping car dealers, helping alot of other auxiliarry businesses–
Stern -> “…this bill will see even more money as the demented people in Washington conclude that “We’re only hurting the dealerships without it.”
CARS will absolutely have some negative unintended consequences. Sure, dealers and manufacturers are all fat, dumb and happy now. But what happens when the gravy train is over in a couple of weeks? No doubt sales will return to their pre-CARS levels as buyers hold out for the next “free money” giveaway.
Did my homework and shopped. Printed off my requirements and gathered my paperwork. Sales rep asked for everthing on July 23rd, so we’d be all set for Monday. I get an appointment at 6pm Monday to take care of the paperwork. Happy as a clam! (whatever that means) What the….I’m not getting the car tonight?? What the….you still want all the money???? I don’t think so. No car, no money. Still waiting, hope the clucker holds out…
Now that i have my new truck thru CARS how about one for boats perhaps we call it “BARS”(Boat Allowance Rebate System). Just put “BARS” on a bill and i assure you the politicians will push it through…LOL
Two billion will keep the program running through Labor Day? I doubt that…
Perhaps alongside with the bill, they should’ve required that they get this friggin backlog under control. If they have to switch to a better hosting company to deal with the massive data flow, then so be it.
Chances are this bill will see even more money as the demented people in Washington conclude that “We’re only hurting the dealerships without it.”
“We urge the NHTSA to consider setting an “pause date” for the CARS program since we don’t know if the NHTSA can clear the backlog in 1-2 weeks.”
^ That’s a great idea…but makes entirely too much sense for a government program.
Seriously…they really should suspend the program NOW to account for all deals done up to this point.
Based on the published numbers, the average rebate being paid is $4200. Even with $3B of funding, that averages out to only *36* rebates per registered dealer.
This program is on life support even WITH the funding. I wonder if the government has figured that out yet?
I just took advantage of the program and my clunker does qualify, and I did have a great deal on my new car, do, I do not have at home do to the goverment money issue, I will like to point that even do my car qualify I feel sad for all those people that have small clunkers and want to take advantage of the program but there cars are fuel efficient, remember in this economy we all pay taxes, and owner of small clunkers too. I was not in the market for a car and my clunker was a emergency car no a every day car, and I use my clunker and my 5 year 25000 milles toyota corolla to fund this nice accord. I start over with 60 moths payment but I thing that if I am doing good, I have to help the economy even do I don’t need the car. Just my 2 cents. Thanks.
Hi,
We were well prepared for the CARS program, our car fully qualified (21 years old/15 mpg), we did our research and had all our documents, except our title which we were prepared to obtain from the state. Our dealer told us they could get the title quicker through their own process. We applied early, chose our vehicle, made our down payment and waited to conclude the deal. Suddenly the news came that the money was running out. this was on the very day we were to pick up our new car. On the WAY to the dealership we got a call from our sales associate, she had FORGOTTEN to order our title. so, we were delayed by 4 crucial days over the weekend. We ultimately obtained the title OURSELVES by ordering it online and had it expressed to our home, something our dealer seemed to be unaware that consumers could do easily (?!). We finally concluded the deal and brought our new car (Honda 33mpg) home yesterday.
As an experience, this was all a bit hair raising, not only for us but for our dealer as well. We feel that we were dealt with honorably over all but we still can’t understand how such an important aspect of the deal fell through the cracks. Whether it was human error, disinformation, lack of knowledge or a combo of all three, we have been put in a position of nail biting anxiety until we know our dealer has been fully funded. Getting the vote for 2 billion in extra funding will be a big relief for all of us.
Are the dealer’s allowed to keep the car till they get approve from the government. I thought the sale had to be done and they had to have the title signed over to them and the new car in the buyer’s hand?
I think quality will be an issue as the manufactures try and get product to the dealers quick. I was looking at some of the dealer inventory and not much to pick from for the buyer.
I’ll chime in. I am a 10+ year veteran with both sales and mgmnt background. Here’s my prediction, in brief, given what we know at 0100 MDT, 8/06/09.
1) The $2B will be approved – likely without qualifications amendment. There will be no pause structured into the plan. Perhaps we’ll simply continue the “act, watch and react” mode we have of late.
2) Dealers will process a record number of transactions this weekend. Feast or famine? It’s feast time. The expectation for loss of momentum is palpable. Everyone wants their piece of the pie to catch up on delinquent credit cards, auto payments, even mortgages. ( I sense colleagues nodding “Yep! Nailed that one.”) At the business level some just hope to save theirs.
3) Many would-be buyers will continue to arrive at dealer lots otherwise ready to drive away in a new vehicle but will be woefully unprepared with research and required documentation. It becomes the dealer’s (or staff’s) responsibility to do due diligence — and I assure you that most are now experts in their investigation.
4) Many dealer principals will chose to hold the sold vehicles and perhaps decline acceptance of the clunkers pending approvals/payment. This is a huge consideration for already cash-flow strapped dealers that can’t afford to put assets in the street with suspended sums well in excess of their margins.
5) Selection will become so thin that dealers will decline to “dealer-trade”. Customers will thus become frustrated and even desperate and many will buy vehicles that are a longshot from their first/ideal choice.
6) Already weary sales staff/management will work continued brutally long hours. Patience for non-committed buyers will be noticeably less than the typical professionalism our industry aims for with respect to customer service.
7) Salespersons, already reeling from surprisingly short July paychecks — due to clunker deal holds — will make every effort to reap the windfall of sales opportunities but with guarded skepticism.
But in summary, as dramatic as all that may sound, we’ll make hay with this program. People will buy up the qualified and most desirable inventory and be extraordinarily rewarded. Some factories may spool up, but with great caution. They’ll be too late anyway unless the stimulus momentum gains natural traction and sustains it, refuels it and drives on. The chemistry is both volatile and unpredictable.
Just my humble opinion. I could be and hope to be wrong on numerous predictions. But if you need a new ride, go find it. Scuttle other seemingly high priorities. Just do it — NOW!
- Q.E.D.