"The $3,000-to-$5,000 car is just gone."

[Rogue 9]

USA Today

Clunkers program could drive used car prices up

By Chris Woodyard, USA TODAY

Hundreds of thousands of "clunkers" headed for scrappers may cause already rising prices for used cars to head even higher, dealers and market analysts warn.

The popular cash-for-clunkers program, extended by Congress last week with $2 billion more in federal incentives, requires that all the old fuel guzzlers traded in are scrapped — not resold. That means up to 750,000 vehicles will never find their way into the hands of another owner. Many are at the end of their useful lives, but others, with years of life left in them, normally would be resold.

"Those are the cars that lower-income families need," says Geoff Smartt, owner of Smartt Cars in Caldwell, Idaho.

Used car prices have risen about 5% on average in the last year, says Tom Webb, economist for Manheim Consulting, a branch of a major used car wholesale operation. Fewer new car sales have meant a drop in recent-model trade-ins. Car rental companies also have reduced supply by cutting their fleets. That's resulted in fewer castoffs for used car lots.

Now, the clunker program could cause prices to rise 5% to 10% more, especially for vehicles worth $4,500 or less, says Alec Gutierrez, senior market analyst for Kelley Blue Book. "It's going to drive prices up of some of the most affordable vehicles we have on the road."

The $2 billion added by Congress came after eager buyers churned through most of the original $1 billion in the first two weeks. The program provides incentives of up to $4,500 to people who trade in an old car for a new, fuel-efficient vehicle. But to prevent fraud, the program requires that all trade-ins be scrapped so the gas guzzler doesn't find its way back on the road.

Sen. Tom Coburn, R-Okla., called that provision "nuts" during debate in the Senate last week. He said that in his state, one trade-in had less than 10,000 miles on the odometer. "We're going to destroy the opportunity for somebody less fortunate to have that automobile," he said.

Used car dealers agree. They say fewer older cars are at auction.

Too few older cars at reasonable prices could put some dealers out of business, says Tim Swift, general manager of the Corry Auto Dealers Exchange, an auction operation for dealers in Corry, Pa.

"It's was tough finding them before, and now, it's even worse," says Mike Williams, owner of Auto Wise in Shelbyville, Ky. "The $3,000-to-$5,000 car is just gone."

Well, all I can say is I'm glad my "clunker" has years of useful life left in it, because there's no way I could afford to replace it at this point. What a huge fuckup.

[Ryan Thunder]

Cue an outcry for effective public transit?

[Serafina]

Cue an outcry for effective public transit?

Isn't that unamerican and communistic?

[[R_H]]

Cue an outcry for effective public transit?

Isn't that unamerican and communistic?

Nor is it available for those who need affordable transportation now/in the near future. Or those that live in areas too rural to be serviced by public transportation.

[Mr Bean]

May I point out that the traded in cars were the big fuel inefficient ones? Not all old used cars to be sure, what's left over are the smaller more fuel efficient used cars, more over the cars American's are buying today are smaller and more fuel efficient so the next batch of used cars will also be smaller and more fuel efficient.

Cry me a river if we have a five to six year period where the used cars are more expensive than normal. We'll get through this rough patch fine, and this is the kind of shot in the arm that hurts short term but sure as hell helps over the long period.

[GrandMasterTerwynn]

Cue an outcry for effective public transit? :D

Isn't that unamerican and communistic?

Not to mention it would first require the demolition of all US 'exurbs,' most suburbs, and quite a few city centers and their re-planning and reconstruction to be vastly more pedestrian and mass-transit friendly than they are presently.

[FireNexus]

Isn't one of the major points of cash for clunkers to get those cars off the road? If you don't destroy them, then you're just redistributing the problem of inefficient cars rather than solving it.

[Gil Hamilton]

Well, all I can say is I'm glad my "clunker" has years of useful life left in it, because there's no way I could afford to replace it at this point. What a huge fuckup.

I think the point is being missed. We are trying to get old gas guzzlers off the road. In the short term, that will mean higher car prices. After all, a resource being more scarce does that. In the long run, prices will go down in a few years as more fuel efficient cars are built and we'll be better off for it.

[Knife]

Doesn't mean shit anyways. Just sold my 04 Vibe for 5500, all you are missing are the old beat up piece of shits that got 12 mpg's, not necessarily all the 'cheap' cars.

[General Zod]

Maybe the automotive industries should start taking cues from India? Just a thought.

[whackadoodle]

says Tom Webb, economist for Manheim Consulting, a branch of a major used car wholesale operation

Manheim Auto Auctions are the Microsoft of wholesale auto auctions. If you are a car dealer - new or used - and you need used cars to sell, you have to deal with Manheim. From October of 2008 to, oh, well, Cash for Clunkers Time, new cars sales were less than stellar. WE resorted to packing in a lot of late model used cars, bought at auction ( read: Manheim ), to meet the new consumer demand - such as it was - for used cars.

After all, with no 0% finance offerings for new cars, it made more financial sense for the consumers in the market to buy quality used cars. At least until this spring, when the dealer demand for used cars started reaching the break-even point. Auction price approached market price.

Then came Clunkers. It nearly emptied us of our new vehicle inventory. Now, we have more than enough used cars to meet customer demand without purchasing from Manheim. We are struggling to find new cars to meet demand. For example, I had an ad up on a very expensive LED billboard - "Yes! We have an Equinox!". That's all it took to move that vehicle in 24 hours.

So, Clunkers - successful. Manheim -Whiny Little Bitches, pissed off that their MASSIVE PROFITS have ben reduced.

[whackadoodle]

Doesn't mean shit anyways. Just sold my 04 Vibe for 5500, all you are missing are the old beat up piece of shits that got 12 mpg's, not necessarily all the 'cheap' cars.

Oh, dear gods - You bought a Vibe? Are you blind??!!

And you got $5,500 for it? Was the salesmanager blind? Or were blowjobs involved?

[Lonestar]

Oh, dear gods - You bought a Vibe? Are you blind??!!

And you got $5,500 for it? Was the salesmanager blind? Or were blowjobs involved?

What's wrong with a Vibe? It's a Toyota Corolla Matrix rebadged.

[Sephirius]

Doesn't mean shit anyways. Just sold my 04 Vibe for 5500, all you are missing are the old beat up piece of shits that got 12 mpg's, not necessarily all the 'cheap' cars.

Oh, dear gods - You bought a Vibe? Are you blind??!!

And you got $5,500 for it? Was the salesmanager blind? Or were blowjobs involved?

It's certainly better looking than the Toyota.
And came better equipped for the price when new.

[Rogue 9]

I drive an '01 Ford Taurus. I measure my fuel mileage on every tank; with highway driving with low acceleration, no speeding, and generally going easy on it I can squeeze 27.5-28 miles per gallon out of it. Driving like a maniac can drop it as low as 19 (more usually 23 or so), but I don't drive like that (even though too many people do) so I'm not too worried about it. I also got it for $3800, and scraped the bottom of the barrel for that.

Is it a match for a compact car's fuel efficiency? No, but when I have passengers it's for long-distance trips, and I have stuff to haul a lot of the time, including a double bass (which I can fit in diagonally across the passenger seat and into the trunk with the back seats folded down; try THAT with a Prius). More to the point, it's what I could get when I finally had to break down and buy a car.

[whackadoodle]

What's wrong with a Vibe? It's a Toyota Corolla Matrix rebadged.

Except that it has a resale value below a Pontiac Aztec; and is nearly as ugly.

[tim31]

^Hey look, an Opinon from someone who Knows About Cars

[ray245]

Cue an outcry for effective public transit?

Isn't that unamerican and communistic?

Nor is it available for those who need affordable transportation now/in the near future. Or those that live in areas too rural to be serviced by public transportation.

Maybe Americans as a whole should reconsider their views towards living in the more rural regions and the suburbs?

At this stage, I really find that sustaining suburban culture is a luxury that no nation can really afford.

[Knife]

Doesn't mean shit anyways. Just sold my 04 Vibe for 5500, all you are missing are the old beat up piece of shits that got 12 mpg's, not necessarily all the 'cheap' cars.

Oh, dear gods - You bought a Vibe? Are you blind??!!

And you got $5,500 for it? Was the salesmanager blind? Or were blowjobs involved?

I sold it actually. Bluebook could have gone up to 6200 but I priced to sell. Anyways; I rather liked the car. It was roomie inside, seated five comfortably, got ~38 miles to the gallon and plenty of room to haul shit in the back. We referred to it as a mini-minivan. I only sold it because I had too many cars and it sold before my chev did, so it won the prize.

[Glocksman]

What's wrong with a Vibe? It's a Toyota Corolla Matrix rebadged.

Except that it has a resale value below a Pontiac Aztec; and is nearly as ugly.

Which is why those who realize the Vibe and Matrix are the same vehicle are willing to buy the Pontiac.
Shit, why should I pay at least a grand more for a Matrix of the same age and mileage?

I bought a used Kia Spectra EX (2008 with less than 20K on the clock) last April for $10,990.
If I could have touched a used Vibe of the same age and mileage for less than 12K, I would have leaped at the deal.
Alas, Vibes like that go for at least $13k around here.

What I find annoying is that the 1992 Olds Cutlass Ciera S V6 I traded in for $600 (it had a chattering valvetrain, a 'clunky' transmission and bald tires among other problems. I considered the car to be 3000 miles away from the U-Pull yard) would have qualified for the maximum 'cash for clunkers' rebate.
If I'd waited a couple of months I could have bought a brand new Spectra, Cobalt, or Focus for about the same money after the credit was factored in.

[Glocksman]

I drive an '01 Ford Taurus. I measure my fuel mileage on every tank; with highway driving with low acceleration, no speeding, and generally going easy on it I can squeeze 27.5-28 miles per gallon out of it. Driving like a maniac can drop it as low as 19 (more usually 23 or so), but I don't drive like that (even though too many people do) so I'm not too worried about it. I also got it for $3800, and scraped the bottom of the barrel for that.

Is it a match for a compact car's fuel efficiency? No, but when I have passengers it's for long-distance trips, and I have stuff to haul a lot of the time, including a double bass (which I can fit in diagonally across the passenger seat and into the trunk with the back seats folded down; try THAT with a Prius). More to the point, it's what I could get when I finally had to break down and buy a car.

That 1992 Cutlass Ciera I owned would average 17-18 MPG mixed city/highway driving and thanks to the automatic overdrive would hit 30 MPG on pure highway driving.

My Kia averages 23-25 MPG mixed city/highway driving and 32+ on the highway.

[Raw Shark]

Cue an outcry for effective public transit?

That got me thinking: It's too bad that you can only reap the Cash For Clunkers incentive if you're buying a new car... If I could score $4500 worth of new bicycle and bus/train pass I'd give them the '95 Explorer that I keep around for moving furniture (less than once a year) tomorrow.

[Ryan Thunder]

Maybe Americans as a whole should reconsider their views towards living in the more rural regions and the suburbs?

At this stage, I really find that sustaining suburban culture is a luxury that no nation can really afford.

They're going to have to one way or another, because with peak oil and all that we're going to be losing our pesticides, which means that we'll need even more land to feed everybody than we do already.

Which means higher density living, at least for you folks in the States. Canada... well, we have more room, I think.

[Mayabird]

There are, according to the U.S. Department of Transportation, 136 million registered cars and 110 million registered trucks in the U.S. Cash for Clunkers replaced a whole 0.3% of them, thus apparently destroying the ENTIRE WORLD.

[Knife]

Maybe Americans as a whole should reconsider their views towards living in the more rural regions and the suburbs?

At this stage, I really find that sustaining suburban culture is a luxury that no nation can really afford.

Don't be a douche Ray. That very fact is slowly sinking into a lot of Americans; however, you can't expect it to change with a snap and a pop.