Good news: Cash for Clunkers benefits environment and economy

cash-for-clunkersThe Car Allowance Rebate System, informally called “Cash for Clunkers,” had three main goals:

  • To financially aid car companies and dealers
  • To please voters by giving them $3500-4500 dollars for an old car
  • To decrease pollution by taking gas-guzzlers off the road and replacing them with fuel efficient vehicles

The effectiveness of CARS at accomplishing that last goal was in question, because, in the final version, you could trade in an old SUV or truck and get a new one that still made less than 20 MPG (the requirement for trucks was only 15 MPG).

However, as the figures come in, it’s turning out that the public is mostly turning in gaz-guzzlers for more fuel-efficient cars.  The AP reports:

Transportation Secretary Ray LaHood said the average mileage of new vehicles purchased through the program is 9.6 miles per gallon higher than for the vehicles traded in for scrap. Buyers of new cars and trucks that get 10 mpg better than their trade-ins get the $4,500 rebate. People whose cars get between 4 mpg and 10 mpg better fuel efficiency qualify for a smaller $3,500 rebate.

LaHood said some 80 percent of the traded-in vehicles are pickups or SUVs, meaning many gas-guzzlers are being taken off the road. The Ford Focus is a leading replacement vehicleGeneral Motors Co., Chrysler Group LLC and Ford accounted for 47 percent of the new vehicles purchased.

A 9-MPG gain means a savings of 3.8 million barrels of oil per year, and nearly $1000 for consumers at the gas station.  The reduction in CO2 emissions comes out to 660,000 metric tons per year.  And since the trade-ins are recycled, rather than resold, they are being permanently taken off the streets.


Ford said its July sales rose 1.6 percent in July from the same month last year, its first year-over-year increase since November 2007, while Chrysler Group LLC posted a smaller year-over-year sales drop compared with recent months, helped by “clunkers” deals. Other automakers showed gains, giving ammunition to supporters of the car rebate program.

President Obama is encouraging the Senate to approve additional funding for Clunkers.  Senate Republicans, who regularly oppose government government programs, no matter how successful, are continuing their “NO” policy.  But with the support of moderate Democrats, the funding has a good chance of passing, though the vote will have to take place before the summer recess, which begins Friday.

Wondering if your clunker is eligible for a $4500 rebate?


For more info, see, the official Cash for Clunkers website.

UPDATE: The Senate voted to approve $2 billion in additional funding for CARS.  This money is expected to keep the program alive at least through Labor Day.


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