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The Retire Your Ride Program

September 14th, 2009 · 11 Comments

The Federal Government has decided against implementing a cash-for-clunkers program in Canada because car manufacturers were not willing to settle for anything that offered less than a $3,000 rebate. However, it turns out a little-known program called Retire Your Ride, funded by the Government of Canada, already offers modest cash incentives for scrapping a model year 1995 or earlier vehicle that is in running condition and has been registered and insured for at least 6 months. Depending on the province of residence, you could receive $300 in cash, discounts on commuter bicycles, transit passes and manufacturer rebates on new cars. British Columbia residents can receive an additional $750 to $1,250 on the purchase of a newer vehicle under the Scrap-It program.

It is not terribly surprising that the program does not seem to be very successful. The website notes that Retire Your Ride has so far taken 15,000 vehicles off the road out of the 4 million autos the Government says are 15 years or older. It is not hard to see the reason: the financial incentives are meager; probably less than what even a clunker can fetch in the used-car market. The success of the program thus depends on people doing the right thing when it comes to replacing their clunker. We all know how well that will work.

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Tags: Canadian Interest

11 responses so far ↓

  • 1 Four Pillars // Sep 14, 2009 at 11:27 pm

    I don’t understand why the auto dealers would turn down any kind of incentive.

    $3k or bust? I don’t believe that for a moment.

  • 2 gene // Sep 15, 2009 at 12:19 am

    Absolutely right, CC. I have a 1994 Taurus, but I am not going to scrap it for $300.

    Perhaps the program has been sweetened a little since the last time I checked it. Apparently Ford is offering an additional $1,000 to $3,000 discount on various models (in Manitoba, anyway). People can check here for their own province:

    http://www.retireyourride.ca/rewards.aspx

  • 3 Chris // Sep 15, 2009 at 2:25 am

    Two reasons I’m happy our government didn’t bring in a serious cash-for-clunkers program:

    1. I think cars should be built to last. I don’t want my gov’t propagating the view that everything should be disposable (which is a serious environmental problem itself).

    2. Cash-for-clunkers essentially amounts to a transfer of tax dollars to people who have old cars to replace… from those that don’t. How does that seem fair, or even make sense?

    If they really have money to spend stimulating the economy or protecting the environment, they should choose programs that are benefit to all tax payers, not a select few.

  • 4 Al (different Al) // Sep 15, 2009 at 9:46 am

    Incentives like the US C4C are a bad idea. Already US car dealers are hurting because C4C pulled business forward and now the lots are empty of customers.

    It will be interesting to see what contractors will have to say once the HRTC expires (if it actually passes.)

  • 5 Canadian Capitalist // Sep 15, 2009 at 10:22 am

    Mike: Whatever the reason, I’m glad the Federal Government didn’t implement a cash-for-clunker program.

    Gene: Yes, I noticed the auto incentives from manufacturers. However, I’ll be considering another used vehicle to replace my 92 Accord — the depreciation on new cars is far too high.

    Chris: Another point is that the C4C program simply pulls in future demand into the present. It may keep car factories humming for a while but then what?

    Al: Exactly. The experience of Germany is reported to be the same.

  • 6 DAvid // Sep 15, 2009 at 11:13 am

    Chris said: “If they really have money to spend stimulating the economy or protecting the environment, they should choose programs that are benefit to all tax payers, not a select few.”

    If you check, you will find the cash for clunkers was designed to benefit the environment, and therefore all citizens (taxpayers or not). In 1996 changes in auto manufacturing legislation required a major change in tailpipe emissions. The manufacture date of the clunkers acceptable for rebates is not some arbitrary year, but is in fact, this same year. Since the purpose is to remove these vehicles from service, the incentive was meant to get the vehicles off the road, rather than having them resold to another user. The incentive was meant to put the approximate sale price of the vehicle in the purchaser’s pocket for “doing the right thing”

    DAvid

  • 7 boko // Sep 15, 2009 at 5:50 pm

    I’m glad that c4c has not been implemented in Canada, not yet anyway. Its robbing Peter to pay Paul, that’s basically what it is..a select few will benefit while the rest of us just pay so they can ride around in new cars. I still have my 97 accord and plan to keep it for another few years.

    This entire bailout/incentive phenomenon is going to hurt us really bad in a couple of years, when taxes start to increase on all fronts along with interest rates.

  • 8 Phil S // Sep 15, 2009 at 7:17 pm

    The reality is that Canadian sales of automobiles is usually a rounding error for the sales of most mass market automakers. The overwhelming majority of the cars assembled in Canada are sold in the USA. Also, Canadians have a tendency to like a lot of imported automobiles anyways (meaning ones not assembled in Canada – there are no truly “domestic” mass market car companies but that’s not what I’m talking about). So, a serious portion of the incentive money would really go overseas anyways.

    In summary, the ROI of our tax dollars in a cash-for-clunkers program in Canada simply wouldn’t make sense for our government. We would be feeding the bulk of our money to car companies based in Korea or Germany or whatever.

  • 9 Jen // Sep 16, 2009 at 2:30 am

    Based on teh compensation that is being offered in exchange for cars that are in perfect working condition, i am surprised that the Government has managed to get 1500 cars exchanged for such small amounts of money. And what is the point in offering discounts on commuter bicycles. If someone wanted to ride a bicycle to work, why would they have a car in the first place?

  • 10 Sucker Rally, Monavie, Debt Free and More | Million Dollar Journey // Sep 18, 2009 at 8:44 am

    [...] Canadian Capitalist explains the retire your ride program. [...]

  • 11 Patti // Oct 22, 2009 at 12:35 pm

    I agree that a lot of older cars are better made than new ones. So why get rid of it? However when these older cars quit, what do we do with them? Our ‘92 Caravan blew the motor, it cost $200 to tow it home, and here it sits. Scrap yards want us to pay them to tow it away. How about a program to recycle parts that would not leave the owners totally broke??? My dad was in this business…so I know scrap yards make money.

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