Is cash for clunkers a bad issue?.

[pwb]

I thought it was a great thing. Never hear it mentioned.

[TeamPooka]

1. I got my car through CFC. I call it the Obamamobile. nt

[Populist_Prole]

2. I think it was a temporary shot of B12 but in a general GDP way

That is, it helped get some money flying about, It got people to "consume" but it helped foreign makes as much or more as domestics.

The other issue is that it created demand for durable goods NOW which would cause a drop in demand later.

[HiPointDem]

13. same program was used in germany & other foreign countries. it was a way to get people to buy

cars when the economy was sagging (not that it isn't still sagging).

also to take old cars off the street & drive up the price of used cars.

[meadowlark5]

3. We got our vehicle with the help from Cash for Clunkers

Much more fuel efficient vehicle than the one we traded it for.

It's probably not talked about because it was more of that "tax and spending". And it was about replacing less fuel efficient cars with newer more efficient cars. And since there is no climate change or at least that it's not caused by humans - it is was a wasteful spending program

[former9thward]

4. It was not a good program for low income people.

Not everyone can afford a new car. CFC took used cars off the market that poor people would have been able to afford. Most of the cars that were traded in were not "Clunkers" in any respect.

[Joe Shlabotnik]

15. It impacted auto wreckers too.

Many just started scrapping vehicles for their weight instead of stripping off good parts that could be resold to people who could only afford them to keep their older vehicles on the road. The wreckers was always my first call when I needed a part, then an after-market place and lastly a dealership.

[cherokeeprogressive]

5. I believe in the end after it was studied, it was judged to be "not all that".

Abstract:
A key rationale for fiscal stimulus is to boost consumption when aggregate demand is perceived to be inefficiently low. We examine the ability of the government to increase consumption by evaluating the impact of the 2009 “Cash for Clunkers” program on short and medium run auto purchases. Our empirical strategy exploits variation across U.S. cities in ex-ante exposure to the program as measured by the number of “clunkers” in the city as of the summer of 2008. We find that the program induced the purchase of an additional 360,000 cars in July and August of 2009. However, almost all of the additional purchases under the program were pulled forward from the very near future; the effect of the program on auto purchases is almost completely reversed by as early as March 2010 – only seven months after the program ended. The effect of the program on auto purchases was significantly more short-lived than previously suggested. We also find no evidence of an effect on employment, house prices, or household default rates in cities with higher exposure to the program. (emphasis mine)

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1670759

[A HERETIC I AM]

9. Well, if nothing else, it likely got me my present job.

It did spike new car sales and the fact that new car units sold fell so dramatically during '08 & '09, creating a HUGE pent up demand factor, it resulted in a shortage of qualified car haul drivers in this country. A shitload of the older hands took early retirement or moved to other disciplines in the trucking industry and scores of smaller car haul firms either went out of business or downsized dramatically. Allied Automotive Group is a perfect example. They had their difficulties beginning before the recession started (went on a buying spree thereby loading the company up with debt at the wrong time, not to mention the management went on a typical 'extract a much as we can get and screw the worker' type program) but they are not the only example. Hundreds of older but completely serviceable open racks went to the scrap yard because so many companies went under.

It left a HUGE hole for qualified car haulers AND equipment.

Most of the major carriers are finding it more and more difficult to fill positions. So much so that many who have never operated new driver training programs now are doing so, my company included.


I am currently training my second driver, as my firm has recruited me to be a driver trainer and we are about to start our 3rd class of new car hauler candidates in the last 8 weeks.

If you are a trucker and are looking for a change and one that will DEFINITELY make you more money than hauling freight, car haul is a booming industry right now, and it looks VERY good for quite a few years to come. While the number of OTR tractor trailers in the US exceeds 4 million, the number of car haulers is only around 15,000 to 17,000 and there are only a limited number of drivers that can call themselves "Experienced" in this segment. The average age of the drivers in our rather small fleet (70 or so trucks) is 45 years old and up. There are damned few 25ish car haulers out there. I have the proud claim that my first trainee was COMPLETELY out of the ordinary in that she is a woman and 25 years old, joining a select group as one of the youngest female car haulers in the country.

[cherokeeprogressive]

10. I can understand that...

I guess you don't remember telling me though when I was driving OTR that I wouldn't want to be a car hauler.

Trainer huh? That's very cool.

I got lucky in that I found a local gig hauling recyclables off of the mountain I live on.

Be well, friend.

[Edweird]

6. It kinda screwed those that needed affordable vehicles.

Crushing serviceable vehicles, that are desperately needed, in the name of political correctness is borderline sadistic.

[Historic NY]

7. I didn't use it but I think I got a fantastic deal because of it....

paid out the door tax tags etc. 6k less than I did for the previous truck/suv I bought 10yrs earlier.

[Brother Buzz]

8. Cash for Clunkers removed a lot of used cars from the market

A lot of them were not gas guzzling clunker, but very serviceable cars that would normally have trickled down to lower income people. The dearth of used cars drove the price up and hurt poor people.

[Populist_Prole]

11. Agreed. It also distorted the definition of "clunker" by defining the term too broadly

Many of those vehicles were perfectly serviceable and reliable.

[louis-t]

12. It sure lit a fire in the auto industry around here.

Ford dealership at the end of my street had nothing going on for months. No golf carts going back and forth, no truck haulers lining up. Suddenly, there were trucks unloading cars for days. They lined them up 3 deep for 500 ft. length of the lot. They were gone within a month or 2, and the dealership ended up buying the property next to it and tore down the seedy motel to expand. I call it a success.

[reflection]

14. Same here.

I work on the same block as 4 auto dealerships and I see a lot of the salesmen at the various lunch spots nearby. They have been vocal supporters of CfC before, during and since. I imagine they know better than anyone else the effect it had on their business.