When will Cash for Clunkers run out of money?

Okay so I did it. Today I got my Blizzard White and came home happy.

I got it from a dealer in MD and clearly the contract says that the 4500 cash requires government approval. It seems as though there will be a huge flood of applications coming into the Cars.gov website and program on Monday, which is the first day that the program will be accepting submissions from dealers.

Some are reporting of slow servers and websites. With that in mind it will be nearly impossible to figure out which deal will be the last one to have cash available in the $1 billion program.

My dealer did 27 C4C on Friday and will likely have more than 50 by Monday. If the program rejects you because of lack of funds, the contract will have you on the hook for the $4500.

I have read reports in the Wall Street Journal and the like, that most analyst predict that the funds will be depleted by Labor day. No dealer or salesperson I have spoken to think it will last past 2-3 weeks.

In the 130 page rules on the C4C, it states that if the paperwork on the submission contains an error or missing information, the application goes back to the end of the line.

Although I am happy to have the opportunity to trade in my old and faithful car for good money, I am pessimistic for those who are at the end of the line.

Good luck to all. Fingers crossed

If I take delivery and they couldnt get their $4500 due to an administrative error that is on their part, they would have to sue me to get the $4500 as I am not responsible to fix their mistakes. I have no problem signing some waivers to them afterward, but definitely not going to pay them for something they screw up on.

Rough estimate at $4500
$1B=22,222 cars. 22222 cars roughly averages to 440 deals per state. Let's assume there are 25 dealers per state, that means each dealer should be at 18 deals.... yikes

This brings up another point. Who gets screwed the dealer or the original owner. You sign over a transfer of ownership when you do the transaction. Also The dealer destroys your engine. If they expect you to fork over the $4500 you better be able to get you clunker back in running condition.

Your math is off. It should be 222,222 vehicles. The upper bound would be 285,714 vehicles.

By The Numbers — Autoblog should be able to give you a relative sense of how many new vehicles are sold in US every month. It's a given that not all the buyers will have clunkers to cash in though or buy something that qualifies.

http://www.reuters.com/article/earningsSeason/idUSN0152644020090701 is another example report. Last month, 856,670 vehicles were sold in the US. Per http://www.reuters.com/article/companyNews/idUSN0252012720090602, 921,645 were sold in May 09.

There is a large amount of variability from month to month. When sales figures are compared, by convention, they're compared w/the same period a year ago, not the prior month.

The C4C law would have been better if the cut off was just a date. Basically that if you are in line and you submitted before a certain date you got your money. A dealer with very low tolerance for risk would make you wait to take the car until they got their money from the government. Which means that they would lose out in sales to other more aggressive dealers.

1. Many here have driven away with cars on contracts that don't have a guarantee of money from the government.

2. People make mistakes and computers crash. So I would expect there to be some people who wish they never heard of Cash for clunkers before we are all done and through. So there will be a number of applicants that will have to get back at the end of the line.

Your math is wrong...

$1B=222,222 (This assumes that ALL cars traded in will qualify for the $4500 as opposed to some only getting the $3500)

222,222 cars roughly averages to 4444 deals per state.

Assuming 25 dealers per state, you're looking at about 177 deals per dealer.

Personally, I think there are many more dealers per state than you're assuming. Remember, this is for ALL new car dealerships, not only Toyota...

My bad, I used the mini calculator on the computer.

Still with 222K car, I am predicting they will run out of money by Labor day too. Ford Exploders and Expeditions were great sellers back in the 90s. Once again, SUV comes back to haunt us again

I just found http://www.nada.org/NR/rdonlyres/E5...85251/0/StateeconomiesAnnualContributions.pdf which means there are an estimated 20,770 new-vehicle dealers in the US.

http://www.nada.org/Publications/NADADATA/DrivingUSEconomy/ has links to PDFs showing how many dealers there in the state. California has an estimated new-vehicle 1594 dealers.

It's probably lower than that now, since those seem to be 2007 numbers. A lot of new car dealerships 'shut their doors' during the GM and Chrysler bankruptcy filings.

Still, a good number to work with; thanks for pointing that out.

Yes, but stories like GM, Chrysler fight reopening closed dealers - Autos- msnbc.com mention 1900 GM dealers will be cut (down to 4100) and Chrysler cut 789 dealers were cut, leaving 2400.

I know some American car dealers which have gone out of business well before the above automakers took any action.

The more I think about it, perhaps http://uk.reuters.com/article/idUKN0331038120080903 would be a good # to look at. Auto sales have been off by 34.7% YTD. I'd imagine we'll see smaller declines for July and August due to C4C.

My guess is that those who have a qualifying clunker and the money to buy a new car (surely their can't be THAT many in this economy) were gnawing at the bit for this program to start. That's probably why dealerships were getting so many clunkers on Friday and Saturday. The rate of clunker turn ins will likely be signifigantly less by the end of this week...15-20/day might fall to a steady 2-3/day.

I've seen $1B thrown around here, according to USAToday:

Q&A: How the 'cash-for-clunker' plan would work - USATODAY.com

As far as I'm concerned, the program can't run out of cash soon enough. Doesn't really matter as it's evidently a done deal, but why on earth should all of us subsidize trade-ins for some who have old gas guzzlers? Another very poorly thought out program IMHO.

The $4B in the original plan was changed to $1B.

With 222K cars that will be sold under this plan, it's going to stimulate the economy by providing tax revenues, jobs, money for the bank and the effect of these 222K cars will trickle onto many others (insurance, dealers, etc) I am sorry, but you have to think long term and realize what these spendings will do to the economy (I do think the laws should be more strict). The US' economy is tertiary , we need consumer spending to keep ourselves going. Is it a coincident that our GDP went down yet when our savings went up? I am all about responsible spending, but you have to stop listening to the political idiots and think about what programs like these will do to our country. For the right side, all they care about is military spending. For the left side, all they care about is supporting the poor. %$^&*, what about the middle class? I am sick of getting shafted.

And no, I am not with the left or right side, I believe I am smart enough to make my own decision.

The reason this is called a stimulus is that it is a stimulant to our economy. Yes it will help in the short term. But just like any drug, you eventually have to come down from your high. The current crisis is essentially a hangover from too much spending (government and personal). I would suggest that overdosing on this drug called government spending will probably solve our problem in the short term but cause an even bigger hangover in the future, possibly resulting in the actual death (collapse) of our economy.

The idea that we should never experience the pain of a recession (especially after the binge we have been on) is just a drug users justification for more drug use. We are getting very close to the point where tax collections won't even pay the interest on the debt. Stop the madness, Stop the spending!

Edit: For those who know me, I was going to participate in this program, figuring that the money was going to be spent whether I took advantage of it or not. However I opted to sell my van instead (due in part to some chiding I took on PC) and I have to say I feel pretty good about it.
G

Are you sure you are looking far enough down the road? You may just be listening to more short-sighted, bigger idiots...

Do you have kids? What about those who don't have kids but pay taxes that put your kids through school?

Do you have elderly parents? There's an entire workforce paying into social security who probably won't see a dime themselves.

You are welcome to look over the big picture, decide if you like the way this country is run and where it's going and feel free to jump off at anytime during the ride. Good luck finding a country that meets your expectations.:usa2:

You're living up to the stereotype that Prius owners are smug!

Unfortunately in this case: Guilty as charged.

A telling hollow reply. If you don't like it go away...yawn.

Supporting kids and the elderly has been a hallmark of the US for decades if not more, we all know, accept and expect it. Giving an unexpected subsidy to people who happen to have an old gas guzzler is not. They've cloaked it at least in part as an environmental initiative and then structured it to favor the D3 and their lower mileage cars (by deliberately leaving the threshold low). There is a guy in my office who makes $80K+/year and is financially very comfortable. He bought a Honda Fit over the weekend, traded in an old Chevy Blazer he inherited. He wouldn't have bought a car right now if not for the CfC program. I wonder how folks making $10-15/hr or so feel about subsidizing him? We are already in debt and making it worse.

folks making $10-15/hr probably don't pay enough tax to subsidize the guy in your office. He makes 80k+/year. What he gets from the clunkers program is chunk change compare to the tax he paid over the years. He just got some of his money back, what's wrong with that?