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Government Will End Clunker Program Early

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http://www.nytimes.com/2009/08/21/business...mp;ref=business

The government will end its popular “cash for clunkers†program on Monday, more than two months early, because it is already running out of money.

The sudden halt means new-car showrooms are likely to be flooded by last-minute shoppers over the weekend. Dealers have until 8 p.m. Eastern time on Monday to submit the 13-page application to be reimbursed for the rebates they are giving out under the program.

Although the program has brought on a welcome surge in demand for cars after months of dismal sales, some dealers will be glad to put it behind them because it has been plagued by confusion and processing delays.

General Motors on Thursday told dealers that it would give them cash advances on money the government owed them to keep them from dropping out, as some have already.

The program, formally known as the Car Allowance Rebate System, or CARS, gives consumers a credit of up to $4,500 toward the price of a new car or truck if they turn in an older vehicle with lower gas mileage. It has generated more than 457,000 sales since July 24, prompting G.M., the Ford Motor Company and other automakers to increase factory output and call back some idled workers.

“It has been successful beyond anybody’s imagination,†President Obama said on Thursday in a radio interview with the syndicated talk show host Michael Smerconish. “And we’re now slightly victims of success because the thing happened so quick, there was so much more demand than anybody expected, that dealers were overwhelmed with applications.â€

As of Thursday, the Transportation Department had repaid dealers just $145 million, or 7 percent of the $1.9 billion that they had requested, leaving many squeezed and prompting some to withdraw from the program early. The government is tripling the size of the work force assigned to handle the applications.

In many cases, the administration says incomplete forms or errors in the information submitted by dealers are slowing the process. Workers have reviewed about 40 percent of the applications filed, and many have been rejected and then returned to the dealer for possible resubmission.

So the stimulus ends I wonder what will happen then to car sales?

Surely logic would dictate price reductions as clearly at lower prices they get more sales???

Car sales to drop off the edge of a cliff after Monday? Another stimulus package to be announced shortly?

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http://www.nytimes.com/2009/08/21/business...mp;ref=business

So the stimulus ends I wonder what will happen then to car sales?

Surely logic would dictate price reductions as clearly at lower prices they get more sales???

Car sales to drop off the edge of a cliff after Monday? Another stimulus package to be announced shortly?

The problem is they;ve brought forward demand for cars about a decade. This has added another 6-8 months on top of that.

As soon as it ends, the car industry will be decimated, completely wrecked.

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Guest absolutezero
The problem is they;ve brought forward demand for cars about a decade. This has added another 6-8 months on top of that.

As soon as it ends, the car industry will be decimated, completely wrecked.

You're implying the car industry exists, Injin.... :rolleyes:

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You're implying the car industry exists, Injin.... :rolleyes:

But he may have a point.

Perhaps he phased into our universe for a second of lucidity?

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This is the US scheme.

Any news on the UK scrappage scheme?

The money is still being recycled to Mp's bank accounts, so no problem with it so far.

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At current rates, its due to run out in November.

Thanks.

Looks like it could be a cold Christmas this year.

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Thanks.

Looks like it could be a cold Christmas this year.

Isn't it normally in the UK? :P

Once these stimulus packages end there will be calls for new ones as sales collapse.

Still at least the market isn't being manipulated.

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The problem is they;ve brought forward demand for cars about a decade. This has added another 6-8 months on top of that.

As soon as it ends, the car industry will be decimated, completely wrecked.

Indeed. They have killed demand in the car market for years to come by interfering with the natural cycle. They are about to do the same with domestic appliances and after that fook knows what.

Things will get very bad next year because of all this UK/US government meddling. :angry:

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Indeed. They have killed demand in the car market for years to come by interfering with the natural cycle. They are about to do the same with domestic appliances and after that fook knows what.

Things will get very bad next year because of all this UK/US government meddling. :angry:

On one side they have (supposedly) destroyed the clunkers) - taking supply of old stuff out of the system, however, those that bought cheap may not now be buying cheap so who knows what they might have done to the sales chain going forward.

The real damage could be elsewhere. It is widely recognised that car manufacturers have not just used this scheme to drum up some revenue to tide them over, they have (like the bankers) taken the piss and increased their prices. This means they will not have realigned their business to the market reality, not made the necessary cuts / efficiency improvements and probably put themselves in a position where they are unwilling/unable to make the necessary changes to their business models. This then opens the door to companies that will - the aggressive upstart companies and foreign competition which will then have a better chance of wiping them out on the forecourt.

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"The program, formally known as the Car Allowance Rebate System, or CARS"

*slaps forehead*

:lol::lol::lol: Someone has been paid a lot of money to come up with that.

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This means they will not have realigned their business to the market reality, not made the necessary cuts / efficiency improvements and probably put themselves in a position where they are unwilling/unable to make the necessary changes to their business models.

I can tell you that that is certainly not the case in all the motor manufacturers I know of.

The ones I know intimately have all changed their business models massively with respect to the future.

Will it be enough - only time will tell.

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At current rates, its due to run out in November.
Once these stimulus packages end there will be calls for new ones as sales collapse.

Still at least the market isn't being manipulated.

We are going to be wrung out of every penny and every last option before they finish trying to prevent the inevitable. Short cycles of boom and bust really don't seem that bad now, looking back from this place.

Is it only us that can see they are making it worse for us in the long run? Are we the only sane one's left??

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This is the US scheme.

Any news on the UK scrappage scheme?

As I'm looking for a 'new' car I called into a dealer two weeks ago to be told the scheme would be finishing at the end of August so I woulsd need to hurry.

What I would like to know is what effect the scheme will have on the used car market. A 'new' car to me is one between 2-3 years old. For the particular model and year I'm looking for prices went up between 1k-2k around Jan/Feb and haven't reset yet.

Any of you car enthusiasts or dealers out there any opinions on what the future may hold?

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I can tell you that that is certainly not the case in all the motor manufacturers I know of.

The ones I know intimately have all changed their business models massively with respect to the future.

Will it be enough - only time will tell.

OK, will it be enough though?

On the surface it seems they have increased their prices 10/15%.

Will the consumer have the stomach for volume 15 grand focuses when there are 10 grand (or less) Asian cars in competition as a new string of smaller manufacturers vie for volume sales?

Depends on how much of a budget the consumer has to work with - with the VAT, tax and a lot more nasty knocks on the way even running a car might be problematic in itself.

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We are going to be wrung out of every penny and every last option before they finish trying to prevent the inevitable. Short cycles of boom and bust really don't seem that bad now, looking back from this place.

Is it only us that can see they are making it worse for us in the long run? Are we the only sane one's left??

They don't care about the long run, all what Obama's aim is to win the next election, and then delay and fall out until he leaves office. This is always the plan of the person in power.

Trouble is the point where the shtf is fast approaching and delaying it is becoming increasing difficult.

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Trouble is the point where the shtf is fast approaching and delaying it is becoming increasing difficult.

It would be nice to have a clue when it will happen but as i'm surprised it's gone on so long i'm all out of guessing. I just assume one day soon i'll turn on the news to see a bloody great snow ball getting bigger fast until it fills the screen. Then it's anyones guess how it'll play out.

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These new cars are not really new....most have been in open storage for the past 2 years. I wouldn't buy new at the moment....

I've bought two under the scheme, awaiting delivery on the second one, delayed because the factory is closed for the summer holiday, so at least mine are "new".

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What I would like to know is what effect the scheme will have on the used car market. A 'new' car to me is one between 2-3 years old. For the particular model and year I'm looking for prices went up between 1k-2k around Jan/Feb and haven't reset yet.

My guess is that given that there's been a spike in new car sales in the past few months (albeit from a very low base), prices for 2009 cars will be slightly lower than the average for the age as they work their way through their life cycles.

Incidentally, no-one seems to have mentioned the impact of the bangers for cash scheme on independent garages. A significant number of older, maintenance intensive cars of the sort that are usually looked after by independent garages, DIY-serviced or (as in my case) a combination of the two have been taken off the road and replaced with new cars that will require a lot less maintenance, and will be main dealer serviced for the first few years of their life. Will one of the unintended consequences of the scheme be skilled job losses in the maintenance sector?

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These new cars are not really new....most have been in open storage for the past 2 years. I wouldn't buy new at the moment....

Total ******.

Some manufacturers have had problems supplying cars. They scaled down production massively.

Many orders taken will not be supplied for 6-8 weeks as they have to be built!

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Total ******.

Some manufacturers have had problems supplying cars. They scaled down production massively.

Many orders taken will not be supplied for 6-8 weeks as they have to be built!

Agreed, my first one took 8 weeks, the second will take 12 weeks.

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Total ******.

Some manufacturers have had problems supplying cars. They scaled down production massively.

Many orders taken will not be supplied for 6-8 weeks as they have to be built!

Presumably it depends on the type of car you're after. If you want a popular brand of supermini, you've got to wait. If, however, you'd prefer a six-litre guzzler with extra large bull bars, they can just dig one out of a field and deliver it to you tomorrow.

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