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moneysense.ca, 29/06/10
The Retire Your Ride Program
Update: This post was originally published on September 14, 2009. I’m republishing it here because I recently turned in our trusty (and rusty) 1992 Honda Accord to the Retire Your Ride program in return for $300. I could have tried to sell the car privately but I wasn’t very keen to put in the extra work on car that would fetch, at best, $600. Recycling the old car through the Retire Your Ride program turned out to be a quick and straightforward affair. You first need to apply for the program here and provide proof of insurance for the past 6 months. You have the option of dropping the car off or arranging for a pick-up. I opted to drop the car along with the vehicle portion of the permit off at the nearest recycler a couple of days after initially signing up. I understand that a pick up would take 2 or 3 weeks and a cheque will be issued 2 to 4 weeks after drop-off or pickup.
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.
moneysense.ca, 29/06/10
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.
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
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.
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.)
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.
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
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.
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.
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?
[...] Canadian Capitalist explains the retire your ride program. [...]
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.
Interesting that according to President Obama’s website, my 1991 Sundance has exactly the same carbon footprint as a 2010 Ford Escape.
Even without a publicly funded incentive program, we have a pretty good system of trading in our old cars when buying a new one. Many older trade-in vehicles are pretty much destined for scrap metal yards but dealerships often give some trade-in value just to provide incentive for you to buy from them.
I think the only time I would agree with a government incentive program is to take old cars off the road from people who are NOT planning to purchase another vehicle to replace it.
@Phil: I don’t know what the net cost of the program to the taxpayer is because the parts in the car are being recycled have some economic value. I do think that $300 is rather modest which may explain why the aims of the program are rather modest: 50,000 vehicles retired per year. Though I did take advantage of the program, I’m not entirely sure if replacing my 1992 Accord with a 2004 Accord really helps as the carbon footprint of the newer Accord isn’t all that better than the old one, at least, according to this calculator:
http://www.aircare.ca/retireyourride/ryr-calcselect.php
[...] Capitalist points out that even though Canada never had a Ca$h for Clunkers program it does have The Retire Your Ride Program, which is useful if you drive an old beater like he [...]
@CC. It really depends upon the condition of your 1992 Accord. If your 1992 Accord is in MINT condition, with a “like new” catalytic converter and exhaust, clean fuel injectors, no sludge in your oil pan, clean valves, well lubricated powertrain and such… Then I’d agree that the carbon footprint of a 1992 Accord is not much less than a 2004 Accord.
That said, I think the majority of cars on the road which are over a decade old are highly unlikely to be in mint condition. Anything short of a routine complete re-build of the car would likely result in much higher emissions or fuel consumption, oil & coolant leaks, etc.
[...] repairs to keep it in running condition. So with a heavy heart, I turned in my old car to the Retire Your Ride program and went looking for a replacement. I wasn’t interested in getting a brand-new car — [...]
The monthly transit pass offer in Montreal is for 15 months, that’s $1050 at $70 per month and only gets better if the STM raises fares during that time. And if you drop off your old ride, that’s worth a $100 tax deduction on your 2010 return ($50 if you have the recycler tow it).
I moved to downtown Montreal and having a car is a big pain with costly private parking if you want to avoid tickets from street parking.
I had a car which didn’t qualify so I ended up donating it to the Kidney Car Program of Ontario. Got a sweet tax receipt, they guaranteed and delivered on a free tow within 48hrs and the guys who came even helped me get my rusted plates off. Hard to beat in my opinion. check it out http://www.kidney.ca look for the green button to donate to kidney car or call 1-866-788-2277.
[...] repairs to keep it in running condition. So with a heavy heart, I turned in my old car to the Retire Your Ride program and went looking for a replacement. I wasn’t interested in getting a brand-new car — the [...]