Toyota Offering Five-Year Leases to Comply With Cash for Clunkers

Part of the small print in the Cash for Clunkers legislation is that it can only be applied to leases with terms of at least five years. Most lease deals are for much shorter terms — two to three years — because the allure of a lease is that you get out of a car and into a new one quickly.

Toyota is one of the few automakers we’ve heard of that will offer five-year leases, created just for the program. The 60-month leases are available for the Yaris, Corolla, Camry, RAV4 and Tacoma. One sample offer for a Yaris lease lists a headline-grabbing monthly payment of $79 per month for 60 months. The money you’d have to pay up front is $5,229, but if you deduct the $4,500 Cash for Clunkers credit, you’d end up paying $729 up front.

How much would it cost you to buy a Yaris in the same scenario and own it outright at the end of the term? Financed at 2.9% for 60 months, with that same down payment, it would be $125.03 a month, not including tax or destination.

The lease also allows you to drive only 12,000 miles a year. Offers vary by region.

BMW Puts $4,500 Behind Diesel Models

It’s not likely that many folks would shop at a BMW dealership looking to cash in on the Cash for Clunkers program, which is why the company has launched a new incentive to promote its two fuel-efficient diesel models. A $4,500 “eco-credit” will go toward the purchase of either a new BMW 335d or an X5 xDrive35d, on top of current financing offers, and with no trade-in required.

A 335d starts at $43,900, so according to the government program’s rules, it could qualify for either $3,500 or $4,500 in federal funds when exchanged for a clunker, no matter how many options it was loaded up with. The 335d is also eligible for a $900 tax credit. The 335d gets combined mileage of 27 mpg, versus a gas 335i’s 20 mpg, while still delivering a thrilling driving experience. We found a few modestly equipped 335d models in Cars.com’s inventory for $45,225. Add all the above incentives, and those would end up costing $35,325. Read our full review of the 335d here.

The X5 starts at $51,200 and thus would not be eligible for the government incentive (program rules say any vehicle with an MSRP over $45,000 can’t be bought using Cash for Clunkers), but with BMW’s eco-credit it would cost less than a base X5 xDrive30i. The diesel incentive offer runs through August.

Mazda Adding $500 Cash for Clunkers Bonus

Is the government’s $3,500-$4,500 Cash for Clunkers rebate not enough to get you to buy a new car? Well, we’ve already outlined 10 great cars to spend the federal funds on, but today Mazda is making sure it gets consideration, too. The company is adding a $500 cash incentive for those taking advantage of the legislation, and that’s on top of all current incentives.

That means that on the all-new 2010 Mazda3, which only has financing offers — 3.9% for 60 months through July 31 — you’d get $500 cash back, dropping the MSRP of $15,045 to $10,045 if you qualify for the full Clunker rebate. The base Mazda3 with a manual transmission has a combined mileage of 28 mpg, so it would qualify for $4,500 under the program no matter what you’re trading in. (Clunkers have to get 18 mpg combined or worse to qualify, and new cars have to get 10 mpg better to qualify for the full $4,500.) The automatic version gets 27 mpg combined, meaning your clunker would have to get 17 mpg to qualify for the full $4,500. These are the most fuel-efficient non-hybrid models in Mazda’s lineup.

Other noteworthy deals can be had on the 2009 Mazda6. The redesigned sedan is sporty, with plentiful backseat room and a giant trunk. Plus, it has low financing of 2.9% for 60 months, plus $1,500 cash back. Add another $500, and that takes the $18,550 starting price to $13,050, assuming the $3,500 clunker rebate. Combined mileage for the four-cylinder Mazda6 is 24 mpg.

Toyota to Liquidate California Plant

According to a Japanese news agency, Toyota is pulling up stakes at its Fremont, Calif., factory, known as NUMMI. This is the plant that was jointly run by Toyota and GM before GM’s bankruptcy filing this summer. The Detroit-based automaker decided NUMMI — where it built the Pontiac Vibe alongside the Toytoa Corolla and Tacoma — was not integral to its future. NUMMI employs 4,700 people and is the only U.S. Toyota plant with UAW employees.

This would shake up Toyota’s U.S. manufacturing plans, as the company doesn’t build the Corolla or Tacoma anywhere else in the country. The Corolla is also built in Canada and Japan. Toyota recently built a plant in Mississippi that is sitting empty. It was scheduled to build the Prius hybrid, but those plans were put on hold after demand for the car fell along with gas prices.

Toyota could shift Corolla and Tacoma production there.

Update: Toyota previously moved Matrix production to Canada. The Wall Street Journal is also reporting that negotiations have begun for Toyota to pull out of NUMMI.

Update 2: L.A. Times also confirms the closing, mentions this is the last California auto plant.

Report: Toyota to end venture with GM in Calif. (Detroit News)

Toyota Not Profitable in North America

While the mainstream media has focused on the ills of Detroit automakers, Toyota hasn’t been fairing much better in the first half of 2009. In fact, a sales slump has put the company in a precarious position. Yoshimi Inaba, Toyota USA’s CEO, told reporters yesterday that the company is no longer profitable in North America.

The news is a shock strictly in terms of the transparency coming from Toyota, not in terms of the company’s performance. A sales drop of 38% in the first half of 2009 compared with the same period last year would hurt any automaker, and Toyota is not immune to some of the same factors that have hurt GM and Chrysler.

Two factories — a joint venture in California and a recently built but still unstaffed plant in Mississippi — are question marks right now. Inaba said the company will make decisions on both at some point, but at this time capacity certainly doesn’t warrant either.

The executive also mirrored comments made by others in Toyota’s highest ranks, suggesting that future product will be more exciting in terms of styling and performance.

“Toyota is a good car but not exciting,” Inaba said. “Those are the comments we usually [or] always get."

I don’t think anyone’s going to argue with that statement.

Toyota says it's no longer profitable in North America (Detroit News)

Beware of Cash for Clunkers Scams

There will never be a shortage of people out there trying to take advantage of new programs or trends, according to Ohio Attorney General Richard Cordray. The new Cash for Clunkers program, officially known as CARS, is no exception.

Cordray is already aware of a number of scammers and imposters setting up websites to take advantage of people trying to earn a $3,500 or $4,500 rebate by turning in their old, inefficient cars. The sites ask consumers to “preregister” and provide their Social Security numbers.

It goes without saying: Do not do this. Sites that promise to put you in touch with authorized dealers in your area are likewise malarkey.

The National Highway Traffic Safety Administration notes that the rules of CARS are clear: There is no need to register to participate. Dealers will apply the credit you earn from your clunker at the time you purchase your new car.

If you want more information from a reliable source, check out Cars.com’s Cash for Clunkers Guide.

New CARS Program Giving Rise to Scams (Akron Beacon Journal)

What Will Happen to Your Clunker?

If you take advantage of the Cash for Clunkers program (formally known as the Car Allowance Rebate System, or CARS), you may have an image of your old car being crushed into a neat cube of glass, metal and rubber and stacked in an endless landfill of useless, low-mileage vehicles.

The Automotive Recyclers Association wants you to know that this perception could not be further from the truth. The CARS legislation includes a set of rules for processing the turned-in clunkers under the highest environmental standards, which means most of the material gets recycled.

Most importantly, recycled parts will be removed, processed and sold to consumers and automobile repair businesses to keep older vehicles operable. Recycled parts reduce repair costs and can lower insurance premiums by keeping cars safe and running longer.

What can’t be recycled will be melted down for scrap and reused. The United States Council for Automotive Research estimates that in 2007 and 2008, 95% of vehicles were recycled at the end of their lives, and 84% of the materials (by weight) in those cars were recycled.

Newsflash: Turned in Cash for Clunkers Cars Will Get Recycled (AutoblogGreen)

Hyundai Says Clunkers Incentive Accounts for 7% of Sales

Last week, Hyundai announced that it would start accepting eligible “clunkers” as trade-ins, even before the federal government’s official program began allocating funds. It was part of the automaker’s recent “Assurance” campaign, and it seemed to work at least a little, with 7% of the company’s sales over that period coming from clunker-eligible trade-ins.

Almost any brand in today’s climate would be ecstatic with a sales increase of 7%. Hyundai says Ford and Dodge led the list of brands traded in, at 32% and 23%, respectively. The company also touted its own current incentives and $1.49 gas deal. According to Hyundai, with those deals in place, if you fully qualify for Cash for Clunkers a new Elantra could be had for $8,620.

Hyundai expects sales from the program to grow to about 10% for the entire month of July.

Hyundai Advances Dealers Cash for Clunkers Funds

The government hasn’t finished registering dealers for its Cash for Clunkers program yet, and rules for how funds will be distributed haven’t been released to the public or dealers. Hyundai isn’t waiting, however. The company is supplying cash funds to dealers now in advance of CARS going into effect. In fact, it already paid one car shopper last week for turning in a 1995 Ford Explorer while purchasing a new Hyundai Elantra Touring.

Hyundai is being aggressive with its latest incentives, as the company is one of the few to see sales success since the economic downturn. It’s still offering its Assurance plan, and this month it launched a gas incentive good for $1.49-a-gallon gas for a year.

You can check out our up-to-date guide to Cash for Clunkers here, as well as a full list of eligible vehicles (by mpg) here.

Hyundai Expedites Benefits of Cash for Clunkers (AutoRemarketing.com)

Lists Eligible New Cars for Cash for Clunkers

Are you thinking about taking advantage of the government’s new Cash for Clunkers program? Cars.com wants to help you out by listing all eligible new cars, listed according to combined city/highway gas mileage. Check out the list in our Advice section to see if your potential new car made the cut.

Cash for Clunkers: Eligible New Cars by Gas Mileage

Dealers Must Sign Up for Cash For Clunkers

We’ve been covering the Cash for Clunkers legislation as closely as possible, and one tidbit that hasn’t been noted is new-car dealers must register with the government to take part in the program. The proposed start date of CARS (Car Allowance Rebate System) is supposed to be July 1, but that date is not listed on the government website, www.cars.gov.

On that site it says that they’re moving as quickly as possible to register dealers. With thousands of new-car dealers in the U.S., it’s unknown how long that process will take.

Cars.com Guide to Cash For Clunkers

Cash for Clunkers Bill Concerns Car-Donation Groups

Car-donation groups are keeping a wary eye on the Cash for Clunkers bill, fearful that it will dry up a key supply of used cars. The bill is adding insult to injury for these groups, as it comes on top of a painfully bad economy that has already slowed donations.

"It's hard to say; I think [the bill] will have an impact," said Marty Schloss, cofounder of CarsHelpingAmerica.org. "I think it will hurt."

"Kars4Kids is certainly concerned that this legislation will impact our charitable work," Yehuda Meth, a spokesman for that charity, said in an email. "While the bill is purportedly to remove smog-producing cars from the road and benefit automakers, Kars4Kids is conscientiously doing our share by frequently taking cars with high emissions out of circulation."

Charity Development works with groups on car-donation programs, and spokesman Tim Finnigan said he sees trouble for groups who recirculate used cars.

"I think it's going to affect the ones that have retail programs or programs [where] they're trying to give back cars to individuals," he said.

Under the Cash for Clunkers bill, vehicles that get poor mileage can be traded in for a $3,500-$4,500 credit toward the purchase of a new vehicle with better gas mileage. Check out the details here. All the old vehicles traded in must be scrapped.

Individuals who donate their cars can claim a tax deduction for the sale price of the vehicle. While some new-car shoppers might be enticed by the Cash for Clunkers credit, Schloss isn't worried about continued donations from what he calls the altruistic types.

"That's not going to be affected at all," he said.

However, Ed Kim, director of industry analysis at consulting firm AutoPacific, said that while he doesn't see the bill having a sizable impact on vehicle donations, he thinks something else may: "The economy would have a more significant impact on charitable donations of vehicles than Cash for Clunkers would," he said.

Finnigan said the economy is already playing a role in terms of donations, noting that business for him is off 15%-20% from previous years. With the Cash for Clunkers legislation, "if donations fall off to charities, it's just another kind of nail in the coffin for them," he said.

For those who do want to get rid of a car and help a charity, Schloss offers some advice to make the donation go further: "Sell your car yourself and give the money to charity."

Cars.com's Guide to Cash for Clunkers

Are you confused by the new Cash for Clunkers registration working its way through Washington, D.C.? Cars.com tackled the final version of the bill and has broken down all you need to know if you’re interested in turning in your clunker for a credit on your new-car purchase.

Cars.com Guide to Cash for Clunkers

Cash for Clunkers' Impact on the Market

Now that the Cash for Clunkers legislation is on its way to being signed by President Barack Obama — he’s likely to do so next week — we wanted to weigh in on its possible impact on the market.

The initial thinking is that the new-car market will get a quick boost in sales from people looking to take advantage of an incentive that would otherwise not be available. But how big is this pool, and is that really how car buyers operate?

“What this program does is essentially shift the demand from used to new; it doesn’t necessarily create new demand where there was none before,” said Cars.com product manager Jonas Moskowitz, who specializes in used-car sales.

Moskowitz suggests that the typical owner of a car worth less than $4,500 might not even qualify for financing on a new car. According to the National Automobile Dealers Association, the average price of a new car is $28,400.

That doesn’t mean, however, that there isn’t a segment of buyers out there with a second or third car that may qualify. Parents may be able to buy a teenager a new Honda Civic with the help of a voucher secured by trading in the old family minivan, for example.

What do you think? This topic has gotten a massive amount of attention here on KickingTires, so we’re inclined to think there are a lot of people out there eyeballing potential deals.

If you’re considering taking advantage of Clash for Clunkers, tell us your story in the comments section below.

Cash For Clunkers Bill Passes Senate

Late yesterday, the U.S. Senate passed a bill including “Cash for Clunkers” legislation that offers up to $4,500 in cash vouchers to qualifying new-car buyers.

Similar bills have passed in Europe and spurred car sales soon after passing. This U.S. version has been watered down to include only $1 billion in funding instead of the original $4 billion. That means after the bill goes into effect — likely in August — the funding will only last until Oct. 1.

We will have much more on the bill later today, but a brief synopsis is below.

Cars

Passenger cars from the 1984 model year or later with a combined mpg rating of 18 or less are eligible. Owners could get a $3,500 voucher if they trade for a new car rated at least 4 mpg higher or $4,500 if they buy a car that gets 10 mpg more. The traded-in vehicle must be in working condition and owned by the recipient for at least a year.

SUVs, Pickups, Minivans

Vehicles from the 1984 model year or later that get 18 mpg or less combined mpg could earn a voucher for $3,500 if the new SUV, truck or minivan gets at least 2 mpg more than the old vehicle. Buyers can earn a $4,500 voucher if the new truck or SUV gets at least 5 mpg more.

Cash-for-clunkers bill passes, offers up to $4,500 for a new car (USA Today)