Clunkers for Clunkers
I was no fan of Cash for Clunkers, but when Edmunds claimed that C4C cost taxpayers $24K per car, I thought their math was a bit tortured.
But now AP claims that FOIA data shows that thousands of buyers replaced their old gas guzzling trucks with newer gas guzzling trucks with scarcely better mpg, and occasionally even worse mpg. So in those cases, we handed out at least $4,500 per buyer, but gained no environmental and fuel efficiency benefits from the transaction.
Clunker pickups traded for new pickups
The single most common swap - which occurred more than 8,200 times - involved Ford 150 pickup owners who took advantage of a government rebate to trade their old trucks for new Ford 150s. They were 17 times more likely to buy a new F150 than, say, a Toyota Prius. The fuel economy for the new trucks ranged from 15 mpg to 17 mpg based on engine size and other factors, an improvement of just 1 mpg to 3 mpg over the clunkers.
Owners of thousands more large old Chevrolet and Dodge pickups bought new Silverado and Ram trucks, also with only barely improved mileage in the middle teens, according to AP's analysis of sales of $15.2 billion worth of vehicles at nearly 19,000 car dealerships in every state. Those deals helped the Ford 150 and Chevy Silverado - along with Ford's Escape midsize SUV - climb into the Top 10 most-popular vehicles purchased with the government rebates. The most common truck-for-truck and truck-for-SUV deals totaled at least $911 million.
In scores of deals, the government reported spending a total of $562,500 in rebates for new cars and trucks that got worse or the same mileage as the trade-ins - in apparent violation of the program's requirements. The government said it is investigating those reports and said in some cases they were probably entered incorrectly by dealers or based on outdated fuel economy figures.
The new data, obtained by the AP under the Freedom of Information Act, include details of 677,081 clunker trade-ins processed by the government through Oct. 16. More than 95,000 of the new vehicles purchased under the program - or about one in seven - got less than 20 mpg, according to the data.
No program is perfect, and a lot of buyers responded to the rising fuel prices and the spirit of the program, but this is disappointing. I wonder how many of these buyers complain about wastefulness in government as they drive their taxpayer-funded guzzlers around town?
I'm curious what the extra carbon cost of producing a new vehicle is, v.s. just fixing your old one. I've been wondering whether Cuba has out-performed the US, greenhouse gas-wise, by refurbishing those pre-1958 gas guzzling chevy Belaires than we've done by upgrading our cars every 4 years in this country. Certainly trading an F-150 in for another that gets a couple MPG more doesn't seem like an environmentally sound decision.
November 4, 2009 7:00 PM | Reply | Permalink
. . . a lot of buyers responded to . . . the offer of free cash.
November 4, 2009 8:29 PM | Reply | Permalink
Thought as much, but on the other hand, was this a ploy to boost the auto industry?
November 5, 2009 4:45 AM | Reply | Permalink
Yes, but it was sold as a way to reduce demand for fuel and emissions from fuel by improving the worst vehicles in the fleet.
November 5, 2009 8:53 AM | Reply | Permalink
This is not good.
November 5, 2009 5:29 AM | Reply | Permalink
I thought the new cars had to get at least 22 mpg (still ridiculously low) to qualify. I then looked it up, and realized I was mistaken. Thbbbb. One more thing I'm disappointed in.
November 5, 2009 1:08 PM | Reply | Permalink
Although in isolated instances, the C4C rules were violated, with a potential for future penalties, the program was generally a substantial success in economic terms and a modest success in reducing greenhouse gas emissions of CO2, ozone, and other pollutants with global warming potential or environmental toxicity.
Estimating gasoline or CO2 savings on a mpg difference is meaningless unless one knows the starting point. For example, which would save more money and CO2 emissions - trading in a 1 mpg car for one averaging 1.5 mpg or a 25 mpg car for one averaging 100 mpg?
November 5, 2009 1:59 PM | Reply | Permalink
It depends on how far you drive each one. :) If you end up never driving the 1 mpg car because its gas mileage reeks…
(Still, your point is valid.)
November 5, 2009 3:27 PM | Reply | Permalink
Heh, at least 8,200 "isolated" instances - probably a lot more. The program was a real success for auto dealers, who were able to use Fed money to replace their usual discounts and incentives during the program. The jury is out on whether customers did any better.
Buying according to MPG difference was not very effective. Under the French program, "Prime à la Casse," customers had to purchase a car that emits fewer than 160 grams/km of CO2 to receive a €1,000 grant. That would have put the kibosh on clunker for clunker transactions.
November 5, 2009 3:35 PM | Reply | Permalink
I definitely think we could've done better. Hopefully, if we try a similar program in the future, we will learn from our mistakes.
November 5, 2009 3:36 PM | Reply | Permalink
The report cited 145 instances, not 8200. Overall, the program appeared to be a success, with the economic benefits outweighing the environmental benefits, although the latter were not trivial.
November 5, 2009 4:16 PM | Reply | Permalink
The program was a financial success if you owned an auto dealership. If you bought a vehicle, you simply swapped manufacturer or dealer incentives for C4C incentives. If you pay taxes, you got a lot of clunkers off the road, but you also put 8,200 F150s and thousands of other new full size clunkers on the road.
November 5, 2009 7:22 PM | Reply | Permalink