U.S. September Auto Sales Plunge; GM, Chrysler Hit Hard

http://www.reuters.com/article/businessNews/idUSTRE59066D20091002?rpc=64

U.S. auto sales tumbled by 23 percent in September as showrooms emptied after the government-funded boom from the "cash for clunkers" program, with General Motors Co and Chrysler hardest-hit.

Sales for General Motors Co and Chrysler -- the two U.S. automakers struggling to regain momentum after emerging from bankruptcy -- dropped by 45 percent and 42 percent, respectively.

Ford -- the only U.S. automaker to have avoided bankruptcy -- managed to hold its sales decline to 5 percent from a year earlier despite low inventories and reduced incentives for car shoppers.

When you artificially inflate demand, the market corrects in following periods to a point lower than the original demand. Economics 101 people.

Dealers Still Waiting For Clunker Cash

http://www.keloland.com/NewsDetail6162.cfm?Id=89419

During the month long program, Billion Automotive sold close to a thousand vehicles but has only been reimbursed for 272 of them. Vern Eide sold over 200 cars and has only been paid for 27 of them, and that's fueling lots of concerns in the auto industry.

Billion Automotive cashed in during Cash for Clunkers, but owner Dave Billion is still waiting for the rest of his money from the government run program, $3.2 million.

"I wonder how long they'd wait if I owed them $3.2 million. I think they'd be at my door or at least my banker's door," Billion said.

"We had a situation where we had a submission, they rejected it for multiple reasons. We didn't see anything wrong with it, so we resubmitted it. They rejected, we resubmitted it. They rejected it, seven times and finally they paid it, and we never changed a single thing on it," Billion said.

Surprise: Cash for Clunkers Rebate Taxable!

http://www.keloland.com/NewsDetail6162.cfm?Id=0,89084

But many of those cashing in on the clunkers program are surprised when they get to the treasurer's office windows. That's because the government's rebate of up to $4500 dollars for every clunker is taxable.

"They didn't realize that would be taxable. A lot of people don't realize that. So they're not happy and kind of surprised when they find that out," Nelson said.

So the government taxes the people's money, gives it back to some of the people, then taxes it again. What is wrong with this picture? Why not give the dealers $4000 and $3000 and say it's tax free?

Text of "Cash for Clunkers"

http://www.gpo.gov/fdsys/pkg/PLAW-111publ32/pdf/PLAW-111publ32.pdf

This was really hard to find and the reason being because it isn't its own bill. No, it is buried within the Supplemental Appropriations Act of 2009, Title XIII which interestingly enough appropriates "public funds for spending in the Iraq War and Afghanistan War during the 2009 fiscal year." Who knew tanks and cars went together?

More Problems for Cash for Clunkers: Worthless For Most Auto Recyclers

http://jalopnik.com/5324812/cash-for-clunkers-worthless-for-most-auto-recyclers

"This is because the law requires destroying the engine and the transmission, which makes up to 60% of a vehicle's salvage revenue according to the Automotive Recyclers Association. Being unable to sell these parts means the value has to come from the scraps and whatever parts they can strip for sale within 180 days of receiving the vehicle. After this period they are required by law to destroy it."

"'The CARS act, as written... is horseshit beyond repair' and points out the current scrap value is $140 a ton, which means a two-ton vehicle is only worth $280 as scrap. Subtract out the estimated cost of $200 to detox the vehicle as required by law and the total value is only $80 per car if nothing can be sold on it."

"There is nothing from a federal standpoint to stop a consumer from removing the radio, doors, etc."

Cars.gov Privacy Agreement That Taps Into User's PC

http://www.realclearpolitics.com/video/2009/07/31/beck_exposes_carsgov_privacy_agreement_that_taps_into_users_pc.html

"This application provides access to the DoT CARS system. When logged on to the CARS system, your computer is considered a Federal computer system and is the property of the U.S. Government."

"Any or all uses of this system and all files on this system may be intercepted, monitored, recorded copied, audited, inspected, and disclosed, to authorized CARS, DoT, and law enforcement personnel, as well as authorized officials of other agencies, both domestic and foreign."

Government Suspends 'Clunkers' Program

http://wcbstv.com/consumer/cash.clunkers.success.2.1108544.html

"At Current Rate, Giving Out $3,500 Or $4,500 Per Vehicle Would Burn Through $1 Billion Allocated In No Time"

"If they can't administer a program like this, I'd be a little concerned about my health insurance," car salesman Rob Bojaryn said.

When something is free, more people always come to the table than expected. Like Mr. Bojaryn said, just wait until the government gives out "free" healthcare...