Hypocrite or Truth Teller? Ford's Cancelled Bailout Commercial

Close to 600,000 vehicles were purchased by consumers two years ago under the Obama's administration widely successful 'Cash for Clunkers' program, which provided upwards of $4,500 encouraging consumers to trade-in their gas guzzler for a fuel-efficient vehicle. Ford Motor Company, who recently ran the questionable government bailout ad, which some critics say were pulled as a result of the heat that they may (or may not) have received from the Obama administration makes the automaker seem like a hypocrite.

In our opinion, we believe that it was a poor move on the senior officials of Ford Motor Company and their ad agency to run this commercial. Obviously, they must have experienced sudden amnesia. The automaker selectively forgot how they personally benefited from the government-sponsored 'Cash for Clunkers' program that steered 90,154 new-vehicle sales in their direction, according to CARS.gov. In fact, Ford Motor Company sales during the 'Cash for Clunkers Sales' represented approximately 15.6% of total sales during the program period. Ford Motor Company was only second to Toyota Motor Sales, which garnered 120,000 sales from the government-funded program. These government induced sales helped to keep the plants running and folks employed.

So, who is the real hypocrite Ford Motor Company or as some critics are alleging, the Obama administration, for forcing the automaker to pull the ad? You decide. We are just laying out the facts. In our opinion, if Ford Motor Company was planning on running such an ad this should have been done at the time the government was deciding, if they were going to save both Chrysler and GM.

Also Ford Motor Company like the other Detroit-based automakers have received assistance from the government for plant upgrades, assistance in building hybrids and other fuel-efficient vehicles.

Four Ways a Car Can Drive Down Your Taxes

Although the government funded Cash for Clunkers programs ended in the fall, which provided up to $4,500 in trade assistance for consumers agreeing to purchase a fuel-efficient new vehicle, Uncle Sam is still offering tax incentives for both new (and used) vehicle buyers, as long as they can show proof they took delivery of a vehicle by December 31, 2009. To help navigate the tax savings, we've found four ways you can drive down your taxes for the year.

For one, if you're a small business owner who purchase a new or pre-owned vehicle with a Gross Vehicle Weight Rating (GVWR) of over 6,000 pounds, you may qualify for a one-time $25,000 write-off. Ironically, this incentive is counter intuitive the government's Cash for Clunkers program, which was designed to encourage fuel-efficiency. After all incentives, if you're buying new (or pre-owned), the vehicle final drive out cost must be $25,000 in order to qualify for the small business tax incentive. Furthermore, the vehicle must be used primarily for business purposes.

For instance, purchasing a new or pre-owned $55,000 GMC Denali Yukon, you can write-off a whopping $36,000 in the first year on your taxes. This amount includes the $25,000 one-time small business tax deduction and the standard yearly 20 percent tax deduction. Your tax consultant can help you determine what kind of impact this information could have on your individual business situation. Here are some of the vehicles which will qualify for the program:

• BMW X5
• Cadillac Escalade
• Chevy Astro
• Chevy Avalanche
• Chevy Express
• Chevy Silverado
• Chevy Suburban
• Chevy Tahoe
• Dodge Durango
• Dodge Ram Van
• Dodge Ram Maxi Van
• Dodge Ram Wagon
• Dodge Ram 1500
• Dodge Ram 2500
• Dodge Ram 3500
• Ford Excursion
• Ford Expedition
• Ford Econoline E-150
• Ford Econoline E-250
• Ford Econoline E-350
• Ford F-150
• Ford F-250
• Ford F-350
• GMC Yukon
• GMC Safari
• GMC Savana
• GMC Sierra
• GMC Sierra Denali
• Hummer H1, H2
• Land Rover Discovery
• Land Rover Range Rover
• Lexus LX470
• Lincoln Blackwood
• Lincoln Navigator
• Mercedes G500
• Mercedes ML 320
• Mercedes ML 500
• Mercedes ML55 AMG
• Toyota Land Cruiser
• Toyota Sequoia
• Toyota Tundra

And, if you're not a small business owner, you're eligible for the American Recovery and Reinvestment Act, which permits taxpayers to take a deduction for state and local sales and excise taxes paid on the purchase of new cars, light trucks, motor homes and motorcycles. The deduction is available on new vehicles purchased from Feb. 17, 2009, through Dec. 31, 2009. In states that don't have a sales tax, the law provides a deduction for other taxes or fees paid. This deduction is available whether or not a taxpayer itemizes deductions on Schedule A.

The deduction is limited to the taxes and fees paid on up to $49,500 of the purchase price of a new vehicle. The deduction is reduced for joint filers with modified adjusted gross incomes (MAGI) between $250,000 and $260,000 and other taxpayers with MAGI between $125,000 and $135,000. Taxpayers with higher incomes do not qualify.

Added to that, if you purchased a brand new hybrid or diesel this year, you may qualify for a tax credit, too. Not all hybrids and diesels may qualify. Like Toyota (Lexus) and Honda, Ford will become the next automaker to be ineligible for the tax credit, after April 2010. Thus, if you're interested in taking advantage of tax savings you better make a move on a Ford (Mercury) soon. However, since the Mazda hybrids are similar to Ford's, you can switch brands and still take advantage of their hybrid tax credits.

Finally, since this is the holiday season, you're probably still in the spirit of giving. If you didn't take advantage of the government's Cash for Clunkers incentive, you can donate your old clunker to a charitable organization and write the vehicle off on your taxes. The charitable organization will provide you with a receipt at the time of donation for you to apply to your 2010 taxes.

Make sure you verify the above information with your tax consultant to determine your actual savings.

Final Analysis: Six Reasons Why the 'Cash for Clunkers' Program Gave Us Gas

Its been a little over a month since the widely popular, but controversial 'Cash for Clunkers' program ended its run. While the program received more public criticism than praise, from all accounts here is why we think the program worked:

1. Since the recession, we finally saw a government-run program that everyone reaped the benefits.

While the banks only prospered from the government's recent financial aid package, with the 'Cash for Clunkers' program, the average American consumer actually reaped the benefits. U.S. sales of cars and light trucks fell to just under 746,000 in September, down 41 percent from August, without the government's financial package. Yet, because of the 'Cash for Clunkers' government-run program, September has been the best-selling month on record for this dismal year. The program helped boost August new-vehicle sales to their first year-over-year increase, since October 2007. Demand hit an 11.1-million unit seasonally adjusted annual sales rate in July and a 13.7-million unit rate in August. Through June, the sales rate had not exceeded 9.9-million this year.

2. Automakers were able to increase production and clear out aging inventories with the assistance of the government.

Industry-wide inventories fell to 1.4-million, or 30 days, on Sept. 1 from 48 days Aug. 1 and 64 days July 1, according to the Automotive News Data Center. This program has caused some automakers to add second shifts, calling back some recently laid off auto workers to shore up sagging inventories. Some economist believe that this program has created 44, 000 additional jobs and has avoided the layoff of others, which more than likely would have occurred prior to the government stepping in.

3. 33% of customers who would never have been in the market were pulled in because of 'Cash for Clunkers.'

About a third of customers who participated in the 'Cash for Clunkers' program would not have purchased any vehicle without the government incentive, a new study says.

In a survey conducted by consumer site Cars.com, 30 percent of cash for clunkers buyers said they had not planned to buy a vehicle at all, but were lured to showrooms by the $3,500 or $4,500 government rebates. About 55 percent said they had planned to buy a used vehicle but bought a new one because of the federal offer.

4. The government convinced consumers to trade-in for more fuel-efficient vehicles.

The program provides good news for the environment, a 60 percent improvement in fuel economy between the trade-in and new cars purchased, according to CARS.gov. The average fuel economy of the vehicles traded in was 15.8 miles per gallon and the average fuel economy of vehicles purchased is 24.9 mpg, which equates to a 58 percent improvement.

5. Dealers made money from selling new vehicles again.

As a result of the 'Cash for Clunkers' program a number of new-vehicle dealers doubled their new-vehicle profits in September. In fact, a number of dealers refused to discount their vehicles. The only discount that was being offered was the $3,500 to $4,500 government incentive. We spoke to a number of dealers who emphatically refused to bulge on pricing, during the program. The dealers were definitely in the driver's seat. (Conversely, once the program is over the consumers will be in control again. Dealers will be begging for business.) Furthermore, a number of automakers reduce the incentives they offered, when inventory began to run low.

6. Dealers have been repaid by the government.

A number of dealers made the news, bailing out of the program before it actually ended due to lack of trust with the government-run program. Ironically, as of Saturday, October 3, 2009, according to CARS.gov, the number of vouchers paid and approved for payment: 672,199, which equates to a dollar value of $2,829,721,500. The government had reserved $3-million for the program.

To the critics surprise, approximately 99 percent of the submitted claims have been paid. Where's the media now? Where are the dealers who complained about the program and refused to honor additional deals?

Just wondering:Is this elitist Harvard business professor willing to retract his critical analysis he wrote about the program? I guess this is why some folks should stay in the classroom where theory is taught and out of the real world where business is conducted! Is this proof that the government should overhaul the health care system with a public option? Was the $3-billion investment from the government program worth the cited benefits? And, will this encourage dealers and automakers to develop a program that will entice people to buy a new-vehicle without the aid of the government?

'Cash for Clunkers': Who Really Sold More Vehicles?

While many believe the CARS Act, also referred to as 'Cash for Clunkers', was initially designed to help revive the ailing domestic automakers, the latest report from the government indicates the imports, specifically Toyota and Honda, benefited from the brief new-vehicle sales campaign. However, another trusted industry source, Edmunds.com, says the information being provided by the government isn't providing the American public with an accurate picture.

According to the latest government report, the compact size Toyota Corolla was the top new-vehicle purchased under the CARS Act, yet, Edmunds.com reports that the Ford Escape compact crossover was actually the number one vehicle purchased under the CARS Act. Which source is accurate?

A recent story in Automotive News, an industry trade magazine, reported that the government's list counts each vehicle with a different drivetrain separately. For instance, consumers who purchase the front-wheel drive Escape and the four-wheel-drive Escape was counted separately on the government report, as opposed to being combined as one vehicle on Edmunds report.

That's not the only difference. While the government's database covers all submitted clunker deals, the government have not released unit sales for the vehicles on its top 10 list. Furthermore, as of now the government hasn't released a full list of vehicles and clunker transactions beyond those 10, according to Automotive News.

If you use Edmunds.com list, which is gathering the information directly from the dealers, as your guide, American automakers accounted for 60 percent of the vehicles on the top 10 list, while the government's list only attributes 20 percent of American vehicles being on the top 10 list. Conversely, CNN.com reported earlier this month that domestics had accounted for 80 percent of the new-vehicle sales on the top 1o list. Regardless of which report you use the American consumers benefited from the government aid. I guess, until the final numbers are audited, we really want know which report is truly accurate.

'Cash for Clunkers': Adds a New Rule

Just like the daily fluctuations of the stock market, the infamous 'Cash for Clunkers' program, also known as the CARS ACT, has added another dimension - after receiving a life line from the government two weeks ago.

As a result of the inventory of fuel-efficient economical new vehicles being at an all-time low, dealers and automakers now have limited offerings and consumers are experiencing difficulty in finding a vehicle which qualifies for the government's program. However, as a result of listening to dealer concerns and consumer requests, NHTSA, the organization administering the program, as of Thursday, August 13, has opted to allow consumers the ability to special order a vehicle from the factory by way of a new-vehicle dealer, according to the New York Times. Thus, this latest amendment to the program will allow consumers to qualify for the 'Cash for Clunkers' incentive. We're not sure if consumers will be required to hand over their clunker to the dealers, while they await the arrival of a new-vehicle. If this is the case, you'll have to find another mode of transportation.

So, will the program end during the Labor Day weekend as previously noted or will it be extended? At this point, no one knows the answer. However, what we do know is that the 'Cash for Clunkers' program is a moving target. With that said, we wouldn't suggest that you wait until the last moment to jump on this offer, if you have a clunker to trade. To find out more details about the CARS Act, click here.

CARS ACT Extended, Six Consumer Car-Buying Tips

According to the Detroit News, the Senate finally passed legislation to inject $2 billion into the 'Cash for Clunkers' program through Labor Day weekend. However, there is no guarantee the money will last until then. Furthermore, its highly unlikely this bill will be extended again once the money runs out. Here are a few helpful tips to consider before making your new-vehicle purchase:

Get pre-approved before making your purchase. Credit unions and community banks may offer lower rates than the dealer. Even if you aren't a member of a credit union, most will allow you to join in a matter of moments. If the dealer offers a lower rate than your bank or credit union, accept the rate offered by the dealer. Furthermore, if you're credit-challenged, you too, should shop around before landing on a final interest rate. However, you maybe required to bring some money to the table to help negotiate a better rate. (Use JeffCars.com's car-buying calculator to estimate your payments.)

A number of consumers are leaving money on the table. Besides being eligible for the government rebate and the rebate or other incentives available on the car you're purchasing, don't forget to try negotiating off the MSRP, although the 'Cash for Clunkers' program has drained dealer lots of inventory. If it's a popular hybrid or a hot-selling fuel-efficient vehicle you're purchasing, the dealer may be reluctant to negotiate, until inventory increases. Since the inventory of most dealers are scare, the rules for negotiating has changed temporarily. You would have been in a better position to get a larger discount during the initial phase of this program. To find out the difference between the MSRP and invoice cost, the amount the dealer paid, visit JeffCars.com's New-Vehicle Pricing Guide . (To see which vehicles are the top five 'Cash for Clunkers' picks, click here.)

Be flexible. Because of limited inventory and the unpredictability of the end-date of this program, don't spend too much time being inflexible on colors or options. You could find yourself losing out on the government's allowance. Thus, defeating the purpose of why you decided to buy a vehicle now.

For additional savings, consider buying a brand or model that is being phased out. For instance, the Pontiac brand is offering additional incentives to help clear out its inventory. The Chevy Cobalt is the same vehicle as the Pontiac G5. However, GM is offering a larger rebate on the Pontiac than the Chevy. And, just because the Pontiac brand is being phased out, buyers can take their Pontiac to any GM dealer in the country for service work.

Some hybrids and all diesels offer a tax credit. To find out the actual tax credit, visit fueleconomy.gov. Before buying a hybrid, make sure your daily commute consist of driving in a lot of stop-and-go traffic. If not, it may be in your best interest to consider other available fuel-efficient vehicles.

Lastly, don't wait until the last minute to shop for a vehicle. If the government money runs out before Labor Day, you're out of luck. Also don't gamble on ordering a vehicle. Production or shipping delays could hinder the vehicle's arrival - before the program ends. Try to find a vehicle that's in-stock. As of August 13, the government is allowing consumers to orders from the factory via the dealer. While the government is allowing this, we're not sure if this is your best option.

By following the aforementioned tips, this should keep you in the driver's seat. To find out more details about the CARS Act, click here.

'Cash for Clunkers': Top 5 Most Purchased New Vehicles

Toyota Corolla

MSRP:$15,350-$24,785

Honda Civic

MSRP: $15,305-$24,365

Ford Focus

MSRP: $15,520-$21,774


Toyota Prius

MSRP= $22,000-$32,520

Toyota Camry

MSRP: $19,395-$32,495

These were the top five selling vehicles purchased during the first week of the 'Cash for Clunkers' program. Besides these vehicles being fuel-efficient, they qualified for either a $3,500 or $4,500 discount off of the MSRP, when a non fuel- efficient vehicle was traded in. To find out more details about the program, click here. By the way the program has been extended through Labor Day weekend. However, if the money runs out before then, its highly unlikely the program will be injected with more cash.

Sources: Cars.gov and JeffCars.com's New-Vehicle Pricing Guide

'Cash for Clunkers': Top 5 Trade-Ins

Ford Exploxer 4x4

Ford F-150

Jeep Grand Cherokee

Jeep Cherokee

Dodge Caravan/Dodge Grand Caravan

The first week of the government's 'Cash for Clunkers' program was extremely successful. It was designed to stimulate this year's sluggish new-vehicle market - offering consumers up $4,500 to trade-in a non fuel-efficient gas guzzler. Based on early indications, the top vehicles being trade-in, which qualified for the program, were basically American made vehicles. To find out more information about the program, click here.

Source: Cars.gov

'Cash for Clunkers': Chrysler Gives Everyone $4,500

In an effort to reverse dismal new-vehicle sales, with an aging product line, the new Chrysler Group has agreed to offer everyone who trades in a vehicle for a qulifying 2009 model $4,500 - regardless if they qualify for the government's new incentive program, the CARS Act. So consumers, who actually qualify for the CARS Act, buying a new Chrysler product can qualify for the government's allowance and the $4,500 Chrysler is throwing on the hood. In essence, consumers can get up to $9,000 off of the sticker price on most 2009 Chrysler products. The Chrysler Group's incentive program kicks off on July 23, 2009 and runs until August 31, 2009.

To find out more about the CARS Act, click here.

The 'Cash for Clunkers' Trade-In Program: UPDATED

We've got the inside scoop on the government's new "cash for clunkers" program. The program unofficially kicks off on July 1, 2009 and will run until November 1, 2009. President Obama signed off on the CARS (Consumer Allowance Rebate System) Act on Wednesday, June 25, 2009. The official program rules by NHTSA won't be released until July 23, 2009.

In order to find out if your clunker qualifies for the CARS Act, here are five questions you must be able to answer yes to:

1. Is your gas guzzling clunker in drivable condition?


2. Is your clunker less than 25 years old?


3. Has your clunker been continuously insured and registered in your name for at least 1-year?


4. Does the vehicle have a combined fuel economy of 18 mpg or less? To check the mileage, click here.


5. Like any trade-in, the vehicle, keys and registration information must be turned over to the dealer. Are you willing to turn these items over to the dealer?

If you were able to answer yes to all of the aforementioned questions, congratulations! You're ready to move on to the next step by visiting the government's new website dedicated to the CARS Act. Your local participating new-car dealer will be responsible for administering the program. If you have further questions about the program after perusing the website, feel free to contact 1-866-CAR-7891, after July 1. 2009.

To check out Jeff's latest commentary on BlackVoices.com explaining the CARS Act, click here.

'Cash for Clunkers' Vouchers: July 1, 2009 - Nov. 1, 2009

The "cash for clunkers" bill which allows consumers to trade in gas guzzlers for more fuel-efficient vehicles was finally approved today by the senate. Once the bill lands on President Obama's desk he's expected to sign it. Uncle Sam (our government) has allotted a total of $1 billion toward this bill. Consumers who qualify should expect to receive vouchers ranging from $3,500 to $4,500.

It is expected that this bill will pump about 150,000 new vehicles into the sluggish auto industry this year. Car shoppers who have been on the fence about buying a new vehicle should move on this soon. Just like the certificates the government issued to consumers who were switching from analog to digital TV, this incentive won't be around for long.

The "cash for clunkers" incentive is expected to go into effect on July 1, 2009 and run until around November 1, 2009. Within 30 days of enactment, Uncle Sam (our government) will publish a Web site that includes guidelines for determining eligible trade-ins, details on participation and a list of new vehicles that meet program requirements. As soon as we get more details, we'll have it for you here. To get some of the preliminary details about the bill and how you qualify, click here.

Uncle Sam to Offer $4,500 for Clunkers

After months of haggling over how to induce new-car sales, Uncle Sam has finally developed a plan to put 1-million new cars on the road, while taking gas-guzzlers off the road. To find out more about the cash for clunkers program, which could save new-car buyers up to $4,500 click here.