Saturday, August 1, 2009


UPDATE: Well, yesterday, after I wrote this and set it to publish on Saturday morning, Congress went to work on a $2 billion funding bill to make sure the program could continue. Good . . . . news? I guess?

Yesterday something over at Captain of a Crew of One caught my eye. It seems that The Revenuers have decided to suspend their "Cash for Clunkers" program. It was supposed to pay car dealers big money for older, less fuel-efficient cars taken in trade for newer cars. The Revenuers put up $1 billion for the program because it sounds like a lot, it's a nice round number, and the people who proposed it weren't paying the freight. What the good Captain noticed was that The Revenuers said they had paid out $9.6 million out of the billion on almost 23,000 "clunkers" and were now suspending the program because they were afraid they were out of money. How could they be out of money after spending less than $10 million out of $1 billion? Because it took forever to get the program started, and now they have a huge backlog of deals The Revenuers haven't processed yet. By my math, if roughly 1% of their money represents, conservatively, about 22,000 deals, then the remaining 99% should be around 2,178,000 deals they have backlogged right now. That's a lot of backlog.

The reason I'm posting this here instead of just in Captain's comments is that it reminded me of another story I heard on Thursday. It appears that the EPA has rather abruptly adjusted the fuel economy of a lot of old models upward (though, to be fair, they say they've adjusted many downward as well.) That move resulted in lots of people finding that their clunkers are no longer clunky enough to get some of that free federal money nobody pays for, and that's a problem. There are even reports of dealerships calling customers to give them a choice between paying the difference or returning their new cars and taking back their clunkers.

When I first heard that story (confession time: I heard it on Rush Limbaugh's show) I figured it was a weird coincidence that looked really bad from a PR point of view. Now I wonder. It seems like we're asking rather a lot of coincidence these days.


Illinois vote said...

I heard about "cash for wrecks" running out funds yesterday morning. The thought that crossed my mind, A few years back my mother received a letter addressed to my father from KIA thanking him for his purchase of a brand new Sedonia van. That more new owner information would be forth coming in the mail for him. One small problem. My father had passed away 4 years before that......

Cliff notes: fearing Identity theft a police report was filled out and KIA USA was contacted. A few days later the police informed us a dealership salesman was playing a scam on the factory and was pulling names out of old phone books and attempting to pocket the rebates himself.

I hope the federal government is checking these new "Car for cash rebate's" and confirming that they were used legitimately for new car purchases and actual cars were purchased.

What are the odds that some people without scruples are scamming the public and the Govt on this deal?

Old NFO said...

Yep, rather interesting... What IS that smell???