Cash For Clunkers Gets $2 Billion Green Light
If you’re in the market for a car, get to buying!
Did you actually think that a Senate with a Democratic super majority would allow one of President Obama’s pet projects to die? Did you believe that the shot in the arm for automobile dealerships would be allowed to fade away? Did you think for one second that Americans would stop buying things they probably can’t afford?
Of course not. And that’s why Cash For Clunkers has been extended, to the tune of $2 billion taxpayer dollars. That will mean more payday loans with no faxing and short term loans for down payments, so it helps Personal Money Market, too.
Stimulate the economy, Mr. Obama!
Deb Price reports for The Detroit News that the Senate voted 60-37 and President Obama signed the bill this morning to turn the taxation switch and slam $2 billion more through the Cash For Clunkers program. By current estimate, this should keep the program going through at least Labor Day and fund about another 500,000 vehicle trade-ins. However, this will be the last time, say supporters of the measure. We’ll see about that last one.
“Now, more American consumers will have the chance to purchase newer, more fuel efficient cars and the American economy will continue to get a much-needed boost,” said the president. “Businesses across the country — from small auto dealerships and suppliers to large auto manufacturers — are putting people back to work as a result of this program.”
Breaking down the vote
In total, 51 Democrats, two independents and seven Republicans voted to extend Cash For Clunkers. On the opposite side of the measure, 33 Republicans and four Democrats said no. Two of the Democrats who helped drive the bill toward passing were Sens. Debbie Stabenow and Carl Levin. They’re both from Michigan, which should surprise nobody, considering that Detroit has been the heart of the American auto industry almost since its inception.
“This will be a great weekend to go out and buy an automobile,” said Stabenow. “I would hope it’s an American-made automobile; in fact I would hope it’s a Michigan-made automobile.”
Dealers love it
There were six amendments on the table that could have put Cash For Clunkers in deep freeze until the House returned in a month to vote, but none of the amendments made their way off the Senate floor. However, there are still prominent senators who think the whole thing is a bad idea, like John McCain. He thinks it’s “an unfair giveaway of taxpayer dollars.”
Automakers are very happy that the majority of the Senate don’t share his opinion.
“Cash for clunkers is a resounding success,” said National Automobile Dealers Association Chairman John McEleney. General Motors Co. Sales VP Mark LaNeve said “Our customers and dealers appreciate Congress’ help in keeping the program’s momentum going and providing the stimulus to put more clean, fuel efficient vehicles on the road.”
But will $2 billion last until Labor Day?
Perhaps it is a more accurate prediction of the amount of money Cash For Clunkers will need than the initial $1 billion projection that was supposed to last all the way to November 1. We certainly know that the program has been popular. But if popularity continues to surge – and if the recession begins to let up and the economy improves – there is a possibility that Cash For Clunkers won’t even make it until Labor Day. However, if people who can afford to make car payments are using the program, then it doesn’t matter so much when the program ends, but that it was used as intended. The economy will be stimulated.
The demand has been tough for dealers to meet
Meeting the demand of consumers who want their Cash For Clunkers discount has been a challenge for participating dealers nationwide. “It’s unbelievable. I’ve been buying as much as I can,” said Alan Helfman, who owns three Houston, Texas dealerships. “We are having trouble getting the models that are big sellers.”
In some cases, the automakers are considering an increase in production. Ford hasn’t decided yet, and GM may be on the verge. Tom Stephens, Vice Chairman of Product Development at GM, confirmed as much to Price.
Consumers are loving the Ford Focus
Fuel efficiency is on people’s minds these days, and it’s no surprise. Gasoline remains expensive, and people are thinking about fueling costs over the life of their new vehicles. This fuel efficiency, coupled with good reviews, may be what has made the Ford Focus one of the most popular vehicles asked for in the Cash For Clunkers program.
Saturn dealer Dan Jonuska told Price that the Ford dealer down the street from his Saturn store have run out of the Focus. He believes this has turned their attention toward his lot for a look at what Saturn’s offering. Currently there are around 75 vehicles on his lot, and he projects he’ll sell 30-40 of those in August alone. In July, he moved 20 cars.
“We may not be first on the list, but if somebody wants to take advantage of the program, we have plenty of cars to sell,” he said.
Some dealers are going above and beyond
Many of the vehicles being traded in are simply to nice to junk as Cash For Clunkers mandates. That’s why dealers like Dave Knittel of Charlotte Lincoln Mercury are buying them as trade-ins. They’re even paying more than the $4,500 max that Cash For Clunkers permits. However, if the cars traded in can benefit the dealers’ business, why shouldn’t they do something like this?
“We really got to look at some nice vehicles,” he said. “All these people bought cars; we just didn’t ‘clunk’ them.”
Do you need a loan to take advantage of Cash For Clunkers?
Down payments are down payments. If you need the help of an auto loan, you can apply for one right here, right now.