‘guzzlers’ Program In Search Of More Funds After Sales Surge

[fbachman]

The good news: I guess even Washington doesn't overestimate themselves too much anymore. Seems like they never expected it to really work. I guess they were going by past experience......

 

 

queryvar="guzzlers,program,in,search,of,more,funds,after,sales,surge"; Staff and wire reports

Automotive News

July 30, 2009 - 8:52 pm ET

UPDATED: 7/31/2009 1:48 a.m. ET

 

 

WASHINGTON -- The federal "cash for guzzlers" program reached its $1 billion funding limit unexpectedly after an avalanche of business exhausted its funds, an Obama administration official said late Thursday.

 

 

The White House was working with Congress to try to extend funding as lawmakers prepared to leave town for the month of August, according to the official, who was not authorized to speak for attribution.

 

Initially, congressional and industry officials signaled that the program was going to be suspended as soon as today as funding ran out. Those reports, widely reported by national news outlets including Automotive News, triggered confusion throughout the industry.

 

National Automobile Dealers Association spokesman Bailey Wood said earlier Thursday the organization was briefed by Department of Transportation officials on plans to suspend the program at midnight.

 

But later, Chuck Cyrill, another NADA spokesman, said the association had no official DOT confirmation suspending the program.

 

Backlog

 

The plan appeared to be prompted by a NADA survey showing a huge backlog of unplaced dealer orders that would burden the government's computers and exhaust the budgeted funds, he said.

 

NADA plans to issue advice to members at 8 a.m. EDT today. Wood said.

 

U.S. Rep. Fred Upton, (R.-Mich.) said he was told by Secretary of Transportation Ray LaHood earlier Thursday that the agency is accepting dealer refund applications only until midnight.

 

"They've exhausted the money," Upton said in an interview.

 

But Upton, quoting LaHood, added, "He did not say any orders placed after midnight would not be honored."

 

Upton said the Michigan congressional delegation spoke by telephone Thursday evening and will be meeting this morning to try to find new funding for the program.

 

"The consensus is that this program has worked and we damn well ought to figure out how to continue it," he said.

 

Transportation spokesman Rae Tyson declined comment.

 

"Incredibly popular"

 

"We are working tonight to assess the situation facing what is obviously an incredibly popular program," a White House official said in an e-mail to Automotive News. "Auto dealers and consumers should have confidence that all valid CARS transactions that have taken place to date will be honored."

 

CARS stands for Car Allowance Rebate System, the official name for the program known popularly as cash-for-clunkers or cash-for-guzzlers.

 

Dealers began offering the U.S.-backed rebates of as much as $4,500 in earnest a week ago. But the Transportation Department will need additional cash after a backlog of nearly 200,000 orders threatened to jam the pipeline

 

The program was part of a congressional effort to revive slumping U.S. sales and further help domestic automakers, especially General Motors Co. and Chrysler Group, which have emerged from brief bankruptcies.

 

Sales spiked more than regulators anticipated this week after the government began logging transactions and approving rebates that indicated consumers were opting for vehicles that get significantly better gasoline mileage than the models they were trading in.

 

Fund sought

 

The administration opted to keep the program in place while it sought new money. It was not clear where the administration would find additional funding in a short period of time.

 

"We hope there's a will and a way to keep the program going a bit longer," GM said in a statement. "Any doubt that the program would jump-start auto sales is completely erased."

 

An estimated 16,000 dealers were eligible for the program and each would have to sell more than a dozen vehicles at the maximum rebate to reach the government's funding limit, according to the NADA.

 

U.S. Senators Dianne Feinstein of California and Susan Collins of Maine said any extension of the incentive must require greater fuel efficiency and higher reductions of auto emissions.

 

Congress wrestled with both issues when it established the current incentive to give U.S. manufacturers a better chance of qualifying for the program.

 

U.S. auto manufacturers are scheduled to report their July sales on Monday.

 

NADA presented the results of a dealer survey to the Transportation Department this week, Wood said.

 

The survey showed that there were almost 200,000 dealer transactions that had not yet been submitted for refunds to the government, he said.

 

Data released earlier Thursday by the government showed that dealers had submitted 22,782 deals seeking $95.9 million in refunds.

 

The NADA survey suggests that if the entire backlog of orders were filed with the government, its $1 billion budget would be depleted, Wood said.

 

Neil Roland, Chrissie Thompson and Reuters contributed to this report.

[700 sportsman]

I saw this video of what the dealerships are required to do to the cars that come in for that program, and they drain the oil and fill it with sodium silicate, which I understand is like glass going through your engine, I also find it funny how the program ends the day after this video leaked,

 

Do any dealer employees have any experiance with that?

[bark387]

I'm astounded how fast this all happened, it sure beat the November funds depletion estimate by a few.

 

I wish my 01 Taurus was applicable to this program without MPG restrictions, it would be gone today.

 

[P71_CrownVic]

I saw this video of what the dealerships are required to do to the cars that come in for that program, and they drain the oil and fill it with sodium silicate, which I understand is like glass going through your engine, I also find it funny how the program ends the day after this video leaked,

 

Do any dealer employees have any experience with that?

 

Here is a NEWER VOLVO S80...getting the glass treatment.

 

I am really starting to despise this administration. This is completely unacceptable.

 

Some of these cars could be donated to people that really need them...

[fbachman]

I saw this video of what the dealerships are required to do to the cars that come in for that program, and they drain the oil and fill it with sodium silicate, which I understand is like glass going through your engine, I also find it funny how the program ends the day after this video leaked,

 

Do any dealer employees have any experience with that?

 

Here is a NEWER VOLVO S80...getting the glass treatment.

 

I am really starting to despise this administration. This is completely unacceptable.

 

Some of these cars could be donated to people that really need them...

 

 

An S80...now THERE'S a clunker that deserves a lethal injection...

 

let's see, $1 billion / $4500 = 222,222 vehicles. The actual number is most likely higher, as not all qualified for the full $4500 clunk-rebate.

 

let's assume that the number of vehicles sold is on the order of 300,000 vehicles. This, I think, has been around, what, 3 weeks now? Let's assume 1 month for posterity.

 

That means sales over the last month, OVER what would have been sold without it, were running at an annual rate of about 3.6 million per year. THAT should show up in the sales numbers next month fer sure.

 

wait till all the dealers start asking: "when do we get our money?" LOL

 

My dealer, one of the best I have found, and a VERY shrewd business man (still healthy despite everything) did NOT participate. His answer was on the order of "I don't look THAT stupid, do I???"

He says when someone comes in, he just gives them the rebate (depending on vehicle), and puts the "clunker" on the used car lot. Of course, this forces him to turn away cars that aren't worth $4500 on his lot. But, he says, that not the market segment I'm targeting anyhow. He says over 80% of his customers trade cars in worth MUCH more than that anyhow.

 

This all seems like smoke and mirros to me, but, whaddo I know?

[P71_CrownVic]

My dealer, one of the best I have found, and a VERY shrewd business man (still healthy despite everything) did NOT participate. His answer was on the order of "I don't look THAT stupid, do I???"

He says when someone comes in, he just gives them the rebate (depending on vehicle), and puts the "clunker" on the used car lot. Of course, this forces him to turn away cars that aren't worth $4500 on his lot. But, he says, that not the market segment I'm targeting anyhow. He says over 80% of his customers trade cars in worth MUCH more than that anyhow.

 

This all seems like smoke and mirros to me, but, whaddo I know?

 

Good for him. He sounds like a very smart individual.

 

Here's another kicker...

 

C4C is paid for with TAX dollars...so what does the government do when the dealer gets the $4500 from the clunker? Tax it of course.

 

AutoBlog

[thewaterboy]

This all seems like smoke and mirros to me, but, whaddo I know?

 

 

 

You nailed it!! This program is 100% BS. After seeing some of the cars being destroyed it just shows how stupid this scam has become.

[rvsahs]

Like one dealer was quoted in the funny papers comparing C4C to a military operation... "It is a disaster. We met our objective, but the losses were terrible."

[fbachman]

This all seems like smoke and mirros to me, but, whaddo I know?

 

 

You nailed it!! This program is 100% BS. .

 

 

Just like our present government.... every $%^&* one of em in congress, the senate and the white house....

[NFSGamerUSA]

Isn't it great having such a bright, experienced individual running our country?

 

I had absolutely no idea (or had forgot) that the cars traded in must be destroyed. That's COMPLETELY ridiculous after watching just a few videos on YouTube of many perfectly fine, very new cars being destroyed. It's just wasteful on so many levels and sickening to watch.

[fbachman]

Isn't it great having such a bright, experienced individual running our country?

 

I had absolutely no idea (or had forgot) that the cars traded in must be destroyed. That's COMPLETELY ridiculous after watching just a few videos on YouTube of many perfectly fine, very new cars being destroyed. It's just wasteful on so many levels and sickening to watch.

 

na, you just don't UNDERSTAND.... It's helping curb global warming...

[NFSGamerUSA]

Isn't it great having such a bright, experienced individual running our country?

 

I had absolutely no idea (or had forgot) that the cars traded in must be destroyed. That's COMPLETELY ridiculous after watching just a few videos on YouTube of many perfectly fine, very new cars being destroyed. It's just wasteful on so many levels and sickening to watch.

 

na, you just don't UNDERSTAND.... It's helping curb global warming...

 

 

Well I guess it MUST if our leader says so! After all, he has the polar bear death rates to prove it!

[gave20]

Isn't it great having such a bright, experienced individual running our country?

 

I had absolutely no idea (or had forgot) that the cars traded in must be destroyed. That's COMPLETELY ridiculous after watching just a few videos on YouTube of many perfectly fine, very new cars being destroyed. It's just wasteful on so many levels and sickening to watch.

 

 

Then don't use a perfectly good vehicle for the clunker rebate. I personally like the program and would have rather seen the "stimulus" money from both administrations used for this program instead. It definitely got us looking hard; $4,500 off a new Audi would have been sweet.

 

----------------

Now playing: Alice In Chains - I Can't Remember

via FoxyTunes

[NFSGamerUSA]

Isn't it great having such a bright, experienced individual running our country?

 

I had absolutely no idea (or had forgot) that the cars traded in must be destroyed. That's COMPLETELY ridiculous after watching just a few videos on YouTube of many perfectly fine, very new cars being destroyed. It's just wasteful on so many levels and sickening to watch.

 

 

Then don't use a perfectly good vehicle for the clunker rebate. I personally like the program and would have rather seen the "stimulus" money from both administrations used for this program instead. It definitely got us looking hard; $4,500 off a new Audi would have been sweet.

 

But the problem is most people DID trade in perfectly good vehicles. This program has a very negative effect on the used car network, too. It's not as perfect as the government would have you think.

[bigdogxx]

I wonder how many roads could be repaved, bridges that could be restored, policeman that could be hired etc. etc. instead of giving people my tax dollars who do not deserve it for them to buy cars they otherwise could not afford.