Car Allowance Rebate System Off Again On Again

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The Obama administration has no idea what to do with this cash for clunkers taxpayer money give away program. They announced a halt to this thing yesterday then come out today and tell us nope, she’s back up and running.

The Car Allowance Rebate System (CARS) or cash for clunkers program provided a total of one billion dollars to be distributed to car dealerships who managed to figure out the complicated 135 page mess that was handed down by the Democrats in Washington DC and get customers into new cars that get 22 mpg (light trucks 18 mpg) after trading in their old vehicle that was “only” getting 18 mpg or less.

Here’s the problem.

1,000,000,000 dollars divided by 16,000 participating U.S. auto dealers = $62,500 per dealer. At an average of $4,000 ($3,500 minimum-$4,500 maximum) per government clunker rebate that means each dealer can sell all of about 16 vehicles under the CARS program then the gig is up. Sixteen vehicles per dealership, big whoop.

For some reason I have this feeling that many dealers have already exceeded their limit, by a bunch, with the expectation they will be reimbursed by the government for each qualifying transaction. Maybe they will maybe they won’t but many dealers have taken to having customers sign forms agreeing to return their shiny new high mileage Cozy Coupes in the event Uncle Sam can’t or won’t cough up the cash somewhere down the road. Of course the customer’s previously owned clunker is now a pile of scrap at Uncle Bennie’s Tow Yard and Auto Salvage.

Keep in mind that these dealers are not allowed to resell any of the vehicles they take in on this clunkers program. These trade in vehicles must have their engines permanently disabled and they then must be sent to the scrap yard for shredding within 48 hours after the dealer accepts the clunker via the sale of a new car under the CARS program. How’s that for an environmental benefit to our beautiful and pristine planet?

Q. Where can we buy the sodium silicate necessary to disable the engine block?

A. Sodium silicate is readily available from chemical or automotive supply distributors. Many ATAEs have also arranged for supplies for their member dealers. Clunkers should be disabled prior to applying for reimbursement.

So how in the world are these dealers supposed to protect themselves from consummating deals on qualifying vehicles without taking it up the keister if the fund runs out of cash? Well there is a little gizmo widget on a government website that they are able to log into and see how quickly the taxpayer money is being pissed away so ostensibly they won’t get stuck selling cars under the program after the cash dries up. Yeah, so some nitwit drops the ball and the website doesn’t get updated or locks up under the load and goes blue screen…oh well sucks to be a dealer who is out thousands of dollars when they find out they won’t be getting reimbursed because there isn’t any more money in the fund. Maybe they can call their Congressman.

Q. As funds run down, how can dealers protect themselves from losing $3,500-$4,500?

A. NHTSA has posted a fund balance ticker on the dealers-only Web site (listed in the box above) showing how much money has been allocated to deals submitted for approval. The law states that the program will end by November 1, 2009, or when $1 billion appropriated for this program is spent. It is clear the money will run out well before the statutory expiration date. Accordingly, NADA is working with NHTSA on a fair and orderly program wind down designed to ensure dealers are reimbursed for all valid deals.

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As of this morning Congress is scrambling to find a way to double or triple the amount of money for the CARS program which means each dealer would be able to accommodate a grand total of 32 to 48 customers, depending how much of our money is crammed into this boondoggle, who manage to qualify for this government funded rebate.

One could surmise the method behind some of this madness is that potential new car customers who do not have a clunker that makes the cut would go ahead and make some kind of deal anyway once one of the dealership’s most excellent salespeople sink their hooks into them out there on the lot full of brand spankin’ new cars that have been sitting there for months. In this economy, good luck with that as I suspect the vast majority of those who are showing up at dealer showrooms have not done their homework and have no idea if their trade in will qualify for the $3,500-$4,500 giveaway. Once they discover the deal ain’t happening it’s foot bail out the front door and back into their long since paid off clunker. That’s right folks the trade in must be paid off in order for it to qualify for the CARS program.

So what is this cash for clunkers really all about? Well it looks like just another payback by the Obama administration and the Democrat controlled Congress to the auto workers’ unions and to a lesser extent the enviroweenies using the American taxpayer’s hard earned money and to “prove” to everyone that the government can indeed be the “savior” of the economy just because a billion dollars or more was shoveled into this program. It’s also the first step this administration will be taking to force people out of the vehicles they wish to own into the type Obama decides we will be driving. Look for increased demonization from Congress and the White House for those who drive full sized SUVs and pickup trucks soon after this program ends.

Of course this government has the power to take earnings away from people and throw it at some stupid program without having to show any real or productive results for the effort but still twist the facts to suit their political agenda with the assistance of their pals in the media.

“…and Socialist governments traditionally do make a financial mess. They [socialists] always run out of other people’s money. It’s quite a characteristic of them.”

-Margaret Thatcher former British Prime Minister

Private businesses on the other hand do not have access to unlimited capital taken from the unwilling masses. They have to be able to compete with other businesses and show profits or they will be closing their doors in short order. They are not in a position to spend their shareholders’ investments recklessly without risking, unlike the bums in Congress and the White House, long stints in a prison cell.

Why won’t the left wing dominated Congress and the Obama administration just cut taxes and let the people who have actually earned the money purchase whatever they want? After all there are thousands of businesses in this country that want and need customers to come through their front doors and buy stuff. Why initiate a program that dictates what the government will allow people to buy unless it is intended to benefit a certain constituency and control how citizens spend their own income?

It’s because these idiots think they know what’s best for all of us. We can’t be trusted to make the “right” decisions on our own. I don’t know about anybody else but I sure as hell didn’t buy a ticket for this train ride into Obama’s brand of socialism.

Next stop 2010. That’s when a grip of Congressional Democrats get their tickets punched and their asses kicked out of office and we can begin to put a stop to the abject insanity coming out of 1600 Pennsylvania Avenue.

Update 8-1-09:

The White House and Congress may be giving the “cash for clunkers” program a reprieve, but one can’t help wondering how many dealers and customers will have the confidence to go forward at this point. Things sound like a total mess in the showrooms.

“There is absolute frustration across the board,” Alex Kurkin, a lawyer based in Miami who represents several car dealerships, tells The Lede today. “As of this morning, they’re not really confident about any deals, and no one can give them advice about what they should be telling their customers.”


Mr. Kurkin tells us that the government Web site where dealers are supposed to register their deals has been crashing, and the dealers haven’t been able to plug in their information.

Gee, never could have see that one coming. Oh wait. I think we did earlier today.

“Yeah, so some nitwit drops the ball and the website doesn’t get updated or locks up under the load and goes blue screen…oh well sucks to be a dealer who is out thousands of dollars when they find out they won’t be getting reimbursed because there isn’t any more money in the fund. Maybe they can call their Congressman.”

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