Review of 500 dollar cars::Used Cars under 700 Dollars?
Review of 500 dollar cars::Used Cars under 700 Dollars?
I don't think anyone could have anticipated the wild success of the U.S. government Cash for Clunkers program. Aside from hearing constantly of the collapsed credit markets and the urgency of a 787 billion dollar stimulus program to prevent an even greater depression, you'd think two things: that people didn't have any cash or credit left to apply to new cars and, two, that there weren't that many "clunkers" out there. Wrong on both counts! Auto dealers are reporting a run on cars, taking in so many "clunkers" that some dealers are worried that the program would run out of money before they get the rebates for clunkers already taken in. There is a reported $1 billion dollars invested in the Car Allowance Rebate System and each qualifying person or vehicle could get up to $4500 dollars depending on the mpg improvement on the vehicle purchased. There are some rules required for qualified participants in the program. The "clunker" must not be more than 25 years old and must get less than 18 miles per gallon. You have to have had the vehicle insured for all of the last twelve months, and this is verified through contact with your insurance company. You'll need a clear title to the vehicle you're giving up. Because of the paperwork mountains, the additional workload has stressed both dealers and customers. I needed a new truck and, while my present truck is qualified for the program, I couldn't afford the truck I needed, even with the discount. In order to buy the truck, I would have had to take on too much debt, not a wise option in this economy. New vehicles lose thousands in value during the first year of ownership. Cash for Clunkers doesn't make sense for those who might take on too much debt outside of the $4500 you might get from the program. So I then responded to a mailer from the Ray Price Ford in Stroudsburg, Pa. and decided on a small, high-mileage compact car. The ad brochure was targeted for the low end trim Ford Focus S-model. Applied discounts included a $254 dealer discount, a $1500 Ford cash rebate to customer, an additional $500 dollar Ford Motor Credit discount for those who took the Ford financing. I didn't need the financing but took it anyway in order to get the maximum discount off the base price attached to that model Ford Focus-a base price of $16,200. There were a few conditions put upon my freedom of purchase by my wife. "Don't come home with a red one and be sure that whatever you get has an automatic transmission. And no black interior!" The automatic transmission option would cost about a $1000 bucks more. Red cars are the ones most often ticketed. Black interiors showed dirt. The ad brochure had displayed in bold italics the phrase "No Gimmicks" so I pointed that out to my salesman, Larry Gordon. The dealership had only one Ford Focus S in stock and that one had a manual transmission Gordon went to the company computer and located the nearest Focus with the S trim at a dealership in Phillipsburg, N.J. We did the arithmetic and decided to write up the deal. "Wait a minute...I'll call the dealership." He came back a few minutes later, disappointed. "Sold," he said. Under normal conditions, that would be an opening for the famous auto sales bait and switch, but not in these tough times. I took a look around the relatively small dealer outlet and noticed that the chairs and desks were filling up. A few weeks earlier I'd stopped at a large dealership in another town and you could hear the wind whistling through the gravestones-cars in this case. Nary a soul to be found; it was sad. There was a middle-aged couple in the process of buying a Ford Escape at the table next to us. I had a chance to talk with that couple and look over their car while Gordon perused the internal Ford listings of nearby dealerships. The middle aged couple had traded in a van, they told me. Across the room, there was a young African-American couple working with a salesman to get their monthly payment down. All I got from eavesdropping was that the guy was operating some sort of business and their trade car didn't qualify for the $4500 Cash for Clunkers Plan. He was trying to get a leased vehicle. At another station, there was an old couple patiently waiting for their salesperson to return. They appeared to be in their 80s, well groomed and dressed, and appeared well-to-do. While Gordon searched the internal computer listings for another vehicle that the dealership refused to give up, I sleazed over to talk to the senior-senior citizens. They were disappointed because their car didn't qualify for the "Clunkers" program. "What kind of car are you trading in?" I asked. "A 2000 Ford Escort," they said in unison. For the year, their trade-in had low mileage-73,000. They'd had a transmission problem, though, which they said was fixed twice by the dealer under warranty[V1] . Along about that time, Gordon called me over to look at another vehicle resembling the one I'd first picked out. We called that dealer and were similarly disappointed. They had a buyer for that one and didn't want to give it up. I was a little irritated and said so. "You mean those dealers won't relinquish those cars to other dealerships even when they have a sure thing sale?" Gordon explained it to me and, after I thought about it for a minute, it made sense. I could see that the Cash for Clunkers was beginning to look like a bank run as more and more people came into the dealerships, and the sales staff ran around, sweated, dodged out to smoke cigarettes at the side and rear entrances. Just about everyone with a clunker, a bank account, and a decent FICO score needed a new car-as I did. The writing on the wall of the Ray Price Stroud Ford dealership said "Let Ford Recycle Your Ride" but, if you looked hard enough, you could also see that it said the dealerships would soon run out of cars and the government could likely run out of money for the program. So I pushed for a deal on the available Ford Focus cars on the lot-higher trim models as it turned out. I selected the middle trim level Ford Focus, the SE, which had added options of alloy wheels, Sirius radio complete with subscription, MP3 hookups, and power door and window and mirror controls, and a few other things I didn't need but liked. I told Mr. Gordon of my unwillingness to pay more than $200 dollars extra for those options and that I wanted to buy a Focus close to the original price we bargained for. To my surprise, the dealership agreed and we started writing up the contract. While Gordon called my insurance company to prove that I'd been driving my own clunker and kept it insured for the past year or more, my elderly neighbors came over to ask me what car I was buying. I pointed it out through the showroom window. "That one? That's the one we wanted to buy," said Mrs. Elderly Woman. She explained they'd looked at the car before I got there, drove home, had a change of mind and come back to buy the car. Too late, I thought, irreverently. The car was mine. So the sticker price had been $17,000 and some change for the 2009 Focus SE as opposed to 16,100 for the Ford S model Focus. I got a total of $7,000 off the 17K, including $4500 for my clunker. I got some options I hadn't counted for. I got a car with an automatic transmission, one that wasn't read, and had a "charcoal" as opposed to a black interior. I put $1500 down to shrink the amount owed and I financed $9,276.39 for 3 years though I will no doubt pay the loan off in three months, the earliest I can do that without penalty. That was two days ago. There is new news on the auto front. The Obama administration warned Congress yesterday that it may have to cease the Clunker program because they're running out of money. Obama assured members that existing contracts would be honored, an assurance that did not calm all dealerships. Many dealerships have already stopped taking orders within the program. Others were forced to do so because they have run out of cars. Just a moment ago, I queried the Ford system for new Ford Focus cars by inputting my zip code. The search turned up seven nearby Ford dealers but no Ford Focus cars. All of these dealerships have posted a standard apology. A Wall Street Journal today included an article titled "Government's 'Cash for Clunkers' Program Runs Out of Gas Early." The same article tells of a single dealership, the Lee Auto Group of Southern Main, where Adam Lee, proprietor, has stopped taking in "clunkers" now that he already owns 100 of them and is waiting to be reimbursed $450,000 by the Cash for Clunkers Program. Finally, a government program that works! Well, almost.... |
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