Acting or Reacting?

By now most of you have to have heard of the U.S. Government’s automotive stimulation plan called C.A.R.S (or more lovingly “Cash for Clunkers.” Even if you hadn’t heard of it before today, you must have at least tripped across the entire day of news being about the wild success of this program… or as others started looking at it… “Holy #&^@ I missed out!”

Through the C.A.R.S program, the government hoped to kill tow birds with one stone.  First, infuse the automotive industry (and consumers) with $1 BILLION in incentives in ($3500-$4500 bunches) for consumers trading in older vehicles to purchase new cars. Second, through the trade in of older (hopefully much less fuel efficient) cars and trucks there would be a bump in the lowest average gas mileage vehicles on the road and thereby making a dent in the overall U.S. demand for foreign oil.

This $1 BILLION program was slated to run from July 27, 2009 to November 1, 2009 (or til the governmental funds ran out). Well it only took 4 days… FOUR DAYS… for the American populous to scarf up 250,000 cars draining all of the allocated funds… The good news (I think) is that the OMB worked through the night and “found” 2 BILLION DOLLARS MORE just laying around to provide additional funding to keep the program alive!  So, if you found yourself in that “HOLY &^%#” group, you now have a bit more time to trade in that old gas guzzler for a new fuel efficient car payment and the knowledge that you have done your part to help turn around the economy… Twice actually… remember it is FUTURE debt that the government is drawing from to allow you to more easily buy a car today that you will “gladly repay” (flash back to Popeye’s Whimpy burger fetish) for the next five years in the loan and the next possibly 20+ years in the National debt.

For those of you wondering if you qualify here are the specifics:

One-year Proof of Insurance.

Proof of Registration going back at least one-year.

"Clear" title. This means the title must be free of any liens or other encumbrances.

The vehicle manufacturer date found on the driver’s door or door jamb is less than 25 years old when you trade it in.

The trade-in is in drivable condition.

The trade-in is titled in your name and has been for the last year.

The combined (average) gas mileage is 18MPG or lower.

You have not previously participated in the CARS program.

For more specific details, either go to a dealer website to to the official website.  Both will contain a handy dandy eligibility guide that will help you see if your older car qualifies.

Here’s my story and why I am thinking about this… I have a 10 year old Honda CRV with just about 160K miles… I was thinking that his might be a shoein to qualify. I have really needed a new car for about two years, but we wanted to wait until my wife’s car was paid off (this past June) and then we thought about waiting to maybe save up some cash… Then I got wind of this program to help benefit the economy and we really started questioning whether it was worth it to wait for a few more months or act now and try to leverage a lower overall cost…

We really got excited when some of the dealers began matching the government incentive… There are stories out there of folks purchasing a $20,000 car for less than $10,000… SWAHEET!!! So, we started to get excited and think more seriously about getting a new car.  I dabbled doing some basic research online, we talked about models and our needs / desires… tried to estimate a good timeline for a purchase… then I woke up to the news today… the program was almost out of money and the Office of Transportation may only be able to fund purchased in the pipeline before the end of the day today (if they did not received any new funding).  One thing led to another and we reacted… Trish started calling dealers, I started hunting for my title… I called the Illinois DMV, Trish started test driving, and then the one two punch…

My CRV’s new estimated mileage (which is very accurate to my personal experience) was 21MPG (combined) we don’t qualify for C.A.R.S… but we were so excited that we decided to keep pursuing a purchase by leveraging possible dealer incentives…  We looked at new, and explored used… in fact currently sitting in my driveway is a 2009 Saturn Outlook XR slightly used with 17,000 miles on it that the dealer would like $32,500.  Trish really liked it and the dealership was closing so they let her bring it home to further entice us to make a deal or the car first thing tomorrow morning.  So, for the last few hours I have been looking at Kelly’s Blue Book, I ordered a Carfax report on it, I started calling others for advice, I began crunching numbers…  Did you know that you have to PAY to receive 0% financing now? $2200… that is NOT 0% financing, it is front loaded financing of almost 5% ($36/month for 60 months actually)… even then the payment would almost be $500 for a 1 year old car with 17,000 miles on it… Hmmmm… are we just reacting to impulse now? 

I mean I really do NOT need a car immediately, I don’t qualify or “Cash for Clunkers,” and there are always concerns with used cars… Did you know a brand new top of the line (well one step down but I don’t need an in-car DVD system) Honda Odyssey or list at $33,000?  After looking at some new car models and doing some web comparisons we decided to not try to drive this entire process in a matter of hours (especially based on an impulse) I think calmer heads have prevailed overall… We are going to step back from the impulse and try to really determine our needs and desires before we purchase and then we are going to start test driving and visiting dealers to truly get the best deal for our family… who knows maybe waiting will drive dealer incentives in our favor (especially without C.A.R.S). 

Anyone want to take the Saturn back to the dealer in the morning for me? Awkward moment coming… Oh if someone is interest Reichert Chevrolet has the Outlook XR above available again. (It really is a nice car.)


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