So what will be the party line in 6 months when no one has purchased another GM or Chrysler car? The problem with Obama..other than the fact that he is an empty suit with absolutely no understanding of the free market....is that all his "fixes" to the economy are short term and have side effects that the media ignore. Nothing they are doing is creating new companies with permanent jobs for people. God liberals are stupid...no wonder this clown got elected.

if you had a beater and were in the market for a new car then by all means you should have taken advantage of it. Look upon it as recouping some of your tax money you sent to obama on April 15. sure beats the hell out of him spending it on some crack whore's food stamps. now whether it actually got you a better deal on that shiny new car with leather seats, alloy wheels, sirius radio, and 5 years of payments I have no idea.

Essentially, GA is taxing the rebate, as the rebate is subtracted from the amount the buyer pays, after sales tax has already been calculated. Buyers have a choice of receiving the rebate off the due amount (ie dealer retains rebate), or having the rebate mailed to the buyer.

For example, if sales price is 23500, subtract 3500 CARS trade-in, GA sales tax is 1200 (.06*20000).

Ignoring dealer fees, the gross due from buyer is 21200. But, if the 1500 rebate is subtracted from 21200. Thus the net due from buyer is 19700.

You are only partially right. There are some states that tax rebates. Not having lived in one, not sure how that is handled. Anyone here have experience in that?

I'm amazed at how many people make comments with no real knowledge of the program. And, shame on Neal for accepting the blog as the truth.

As some have posted, the 3500/4500 is not taxed - at all. Dealers had to include the 3500/4500 as part of the trade-in value. That is subtracted from the negotiated sales price and then state taxes are calculated on the net difference. After sales tax is added, then dealer fees are added, and rebates subtracted. That gets you the Out the Door cost.

And, those who participated were not paying inflated prices, unless they are just lousy at negotiating. I negotiated a purchase price for our new Altima at below invoice, and even below the Edmunds Fair Market Value.

My clunker had a market value of $400 (Edmunds.com). After the dealer costs to junk it (chemicals, hauling, etc.), I basically got nothing for it, except for the 3500 from the CARS program. The 3500 was subtracted from that below-invoice deal to get the final price, upon which state sales tax was calculated. Anyone who "traded" in a clunker that was worth more than 3000 really was not getting a good deal and was dumb to use the program.

Oh, and for those who may not know this, another "stimulus" package enables new car buyers to "write off" state sales tax from new vehicle purchases (www.irs.gov/newsroom/article/0,,id=204519,00.html). Even better...

Lastly, not everyone who took advantage of the program went into debt. We were already in the market to buy a new vehicle - with cash. So, we still have no car payment. But, I do recognize we were likely in the minority.

So, people, do some research before spouting opinions as facts. Anything less than that just makes you look foolish.

Oh, and I still think the program was stupid and should never have been passed into law. But, hey, once it is law, I'd be stupid to not take advantage of it.

The 3500 or 4500 is NOT taxed..it is shown as a trade-in and deducted from the sales price prior to being taxed..

...In my experience the dealers were selling "hot" cars at sticker but not above except for a few extremely hot packages......

I'm not saying they jacked up the price of the car like my retail store example, I said they didn't go off sticker as much as they would have. Prior to C4C, many of these dealers were practically giving the cars away to get them off the lot. My point is this: They would be willing to go down $8K off sticker. Now, with the $4500 rebate, they aren't going off the full $8K off sticker. Maybe they go off $4 or $5K off, plus you get the rebate. Do you really think they are going to go down $8K off sticker PLUS give you a $4500 rebate? No way.

When it comes to buying cars, I could care less what supposed rebates or cash allowances are. The only thing that matters is the drive out price. If there is a car I want for say $40K and no more, I could care less of how the dealer gets to that bottom line number - whether he wants to give me more for tradein or more of a cash allowance, no matter to me how he does the numbers - i am not paying more than $40K.

Any company that is in bed with the Government or Unions I wont support. So it looks like the Japs are getting my business. More jobs going over seas! You See, The Unions and the Govenment cannot force us to purchase their Products!

LOL...as it's said, "There ain't no such thing as a free lunch."

My husband and I own 5 pickups. All paid for. All qualified for "C4C". We didn't bother. Why? (1) Cause we knew government would manage to screw it up.
(2) We wanted to incur another car payment, why? Nope...I'll keep my clunkers, thanks.

Maybe some of the folks that have never paid in any taxes will fill the pain of those of us who work.

700,000 times 700,000 is not 3 billion dollars. Where's the rest of the money?

Imaging a person who had a "clunker" that was still worth something, say $3000 or $4000. Imaging that the person trades this car in under the "Cash for Clunkers" program.

Not only is the car or truck destroyed, but also instead of getting $3000 or $4000 tax free for the vehicle, that person is now taxed on it. If the person is a high income earner, he/she can lose a large chunk of the $3500/$4500 they got for their so called clunker. The person would have been much better off selling the vehicle on his/her own.

I don't own a clunker so I didn't qualify. And I don't purchase UAW-built vehicles. I want my dollars to go towards innovation and quality, not "paid for ever" job banks.

the REAL clunkers are still on the road mostly owned by those that can't afford anything better. What's wrong with that picture all you Obamabots?

This clunkers program is like the one-day sales retailers run every other day. They'll say 30% off sale. So, you go there, there's say a $50 shirt you have seen there before that you liked. So, you think now that you will be able to get that shirt for $35 now after the sale. Well, you are surprised that when you get to the store, that shirt that was originally priced for $50 now is jacked up to $70! So after the sale, you get this shirt for $49!! Great sale, huh.

That is what many of these dealers are doing with the clunkers. If there was no $4500 rebate, the dealer, who is sucking wind, could have been negotiated down $9k off sticker. Now, with the rebate, the dealer may only go $5K or $6K off sticker. So, in the end, your drive out price is not that different. Especially now if you have to pay tax!!

"The Fed" didn't pay squat. Taxpayers are paying this. So if you can take advantage of one of these, great, cause it's one of the few ways you'll ever get any of your tax money back. Just don't buy a GM or Chrysler!

This story is a little misleading. There is no federal tax on the $4500. There may be state tax on the $4500, and even the possibility of double tax. But Boort's comments should state that the taxation is at the state level. It would be a lack of legislation on the state level that screwed these people.

Well,Duh! As if anyone would be dumb enough not to think that the governmental agencies would miss an opportunity.We all know that there is no free lunch.

This is like the movies:
Cash For Clunkers: The rise of BOHICA
Cash for Appliances: The return of BOHICA

What? The government is going to tax money that you earn? That is insane. Odds are the people turning in these clunkers(my guess republicans who are hicks who cant afford nicer cars) probably couldnt figure out that the government would want money they earned