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Jul 31, 2009 11:10 AM | 17
Cash for Clunkers, the program that Sen. Diane Feinstein (D–Calif.) has pejoratively referred to as “Handouts for Hummers,” has likely blown through its $1 billion budget in its first official week. The funds, which provided $3,500 or more for Americans trading in old cars that got less than 18 miles per gallon for new ones with better gas mileage, were expected to last until November
Thursday night, White House Press Secretary Roberts Gibbs said the program had not been suspended, but the government was working “to assess the situation...auto dealers and consumers should have confidence that all valid...transactions that have taken place to date will be honored.”
As of this morning, car dealers reportedly are still not sure how much, if any, of the $1 billion will remain in government coffers once the Department of Transportation tallies up its figures. The bill gives consumers $3500 vouchers if they purchase vehicles with a 4 mpg improvement over their trade-ins, and it gives them $4500 if they purchase vehicles providing a 10 mpg improvement.
"We hope there's a will and a way to keep the program going a bit longer," General Motors said in a statement. "Any doubt that the program would jump-start auto sales is completely erased."
In a June editorial in the Wall Street Journal, Feinstein and Maine Sen. Susan Collins (R) complained about how their original Cash for Clunkers proposal was a win–win for the environment and the economy but was soon hijacked by Detroit auto industry lobbyists who helped author a rival bill. The House approved the latter legislation, which would subsidize the purchase of a new Hummer H3T that gets just 16 mpg, along with other gas-guzzling vehicles.
In a joint statement released yesterday, Feinstein, Collins, and Sen. Charles Schumer (D–N.Y.) suggested that an extensions of the program should have a fuel economy requirement at least two mpg higher than the original program and include vouchers for fuel efficient used vehicles. “We believe that any extension of the ‘Cash for Clunkers’ program must go further in advancing the goals of better fuel efficiency and greater emissions reductions. We will not support any bill that does not meet these goals.”
The clunkers pictured above, courtesy raffa080808 via Flickr, would probably not qualify for the program
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17 Comments
Add CommentAnyone interested in the fuel efficiency of cars and the value of certain trade-ins over others should read this excellent Freakonomics post about the crucial difference between miles per gallon and gallons per mile.
Reply | Report Abuse | Link to thishttp://freakonomics.blogs.nytimes.com/2009/06/02/buy-an-suv-save-the-planet/
-Tim Novikoff
The post mentioned above is BS.
Reply | Report Abuse | Link to thisIt compares only one change - from an inefficient SUV to a more efficient one.
What is NEVER mentioned is how much more fuel would be saved by changing from the inefficient SUV to a efficient car like a Prius.
The age old denial and justification factors are alive and well.
Oh man, I saw the post underneat this one saying it was all BS, but I had to take a look for myself (as anyone should).
Reply | Report Abuse | Link to thisWOW, BS doesn't describe it. The whole article says that its better to try to get people to go from gas guzzler SUVs to mroe efficient SUVs that from going to an efficient SUV to a hybrid. While he has a point, he doesn't take it farther enough. He sas going from something that got less, to something that gets more is more important that from going to the most efficient.
"This is a hard concept for us to get our brains around. Richard B. Larrick and Jack B. Soll, reporting in Science (gated) found that only 1 percent of college students studied correctly perceived that an improvement from 14 to 24 m.p.g. saves considerably more fuel than an improvement from 24 to 46."
This is crap, he only tricked 1 percent of college students.....he tries to manipulate the math, but fails to do so. It seems as if he just wants to sell some SUVs!
My H3 gets 5 mpg better than the 4runner in replaced. How can that be construed as bad?
Reply | Report Abuse | Link to thisTo suggest I replace the 4runner with a Prius is completely idiotic and ridiculous. If you are replacing a highly capable off road vehicle and want better fuel economy in a newer highly capable off road vehicle, Hummer is a very good choice. It also has cargo, load, and towing capacity that makes it much more useful than the Prius.
To try to craft a program where you attempt to lure people out of SUVs into cars will only reduce the number of vehicles that the program can interchange for those more efficient.
Frank
The article does compare the three values, from inefficient SUV to efficient SUV to the Hybrid.
Reply | Report Abuse | Link to thisFrom the article:
Range Rover uses 7.14 Gallons per 100 Miles;
Rav 4 uses 4.17 Gallons per 100 Miles;
Prius uses 2.17 Gallons per 100 Miles.
Going from a Rover to Rav 4 you save nearly 3 gallons for every 100 miles but going from a Rav 4 to a Prius only saves you an 2 gallons for every 100 miles. There is nothing wrong with the math. He is simply trying to explain that using miles per gallon to measure fuel efficiency is a little misleading.
The math is correct and actually very easy. The inverse of miles / gallon is gallons / mile. Divide 1 by the mpg rating and multiply by 100 and you find the fuel economy in gallons per 100 miles. Switching from a Range Rover to a Rav 4 saves 2.97 gallons per 100 miles. Switching from a Rav 4 to a Prius saves 2 gallons per 100 miles, so switching from a Range Rover to a Rav 4 saves more gas than switching from a Rav 4 to a Prius. What the article fails to reinforce is that switching from a Range Rover to a Prius saves 4.97 gallons per 100 miles - obviously more than switching from a Range Rover to a Rav 4 or from a Rav 4 to a Prius. A prius is obviously the most fuel efficient vehicle, but unfortunately it is not practical for everyone. Life is full of compromises.
Reply | Report Abuse | Link to thisP.S. Maybe the confusion is why the rest of the world measures fuel economy in liters per kilometer.
Reply | Report Abuse | Link to thisWhat I'd really like to know is what are the actual mpg figures for what has been traded in and what was bought? My back of the envelope math tells me the worst payback is trading a car that get's 18 mpg for one that get's 22 mpg. This would save over 100 gallons of gas per year for 10,000 miles of driving and would cost $3500 from the first Billion in funding for a total of over 285,700 cars and a total reduction of more than 28,850,000 gallons of mostly imported gasoline per year at a retail cost at $2.50/gal for an annual payback of $72,125,000 or 7.21%. This is the absolute worst case scenario and I have consistently rounded down. I think the actual numbers will end up more like 15-25%. Tell me of another government program that actually provides a positive ROI to the average taxpayer. The secondary benefits include the possibility that with lower demand the price of gas could decline, and some immediate unforseen jobs have been created. A friend of mine with a sealcoat business has received two calls from dealerships this week because they want to fix their parking lots immediately, because there are no cars left to have to shuffle around the work.
Reply | Report Abuse | Link to thisMay someone tell me when the americans are going to adapt the metric system?
Reply | Report Abuse | Link to thisConsumption in Gallons per 100 miles in the USA?
Reply | Report Abuse | Link to thisHere in Europe we measure litres per 100 kilometers, a litre being approxiamtely two pints and a kilometer 5/8 mile.
My car model has been on the market since the mid-nineties and gets 2 gallons per 100 miles!
Why, the US is way behind the world in terms of vehicle economics...
greater fuel efficiency will probably not reduce the no. of accidents and injuries nor it will it solve the big problem: too many automobiles on this planet that costs us too much in social costs and stress.
Reply | Report Abuse | Link to thisBetter fuel consumption will not help with the big problem: TOO MANY AUTOMOBILES on this planet.
Reply | Report Abuse | Link to thisReplacing guzzlers will probably not decrease the deaths, injuries, stress and huge costs to taxpayers to support the uses and abuses of automobiles.
Atleast electric ones won't contribute to all the NOISE.
@ Oemissions,
Reply | Report Abuse | Link to thistrading in SUV's for sedans will definately reduce the number of injuries if not the number of accidents. SUV vs. small sedan results in very bad things for the people in the sedans. And sedans don't roll over unless you're being extremely stupid in which case I only feel sorry for the passengers.
@ Currelle,
we have, but only for our liquor. My fifth is now 750 ml, and my quarts are now a liter. Also, when we were drunk we let the Olympics change to these silly French measurements. Thank god my beer still comes in pints or God only knows what you foolish Europeans would try to pull.
UPDATE According to the Department of Transportation the vehicles traded in under the first billion dollars will save approximately 60 million gallons of gas a year. I know a sales loss of $150,000,000 won't really hurt the big oil companies but I'm glad to be doing my part to put the screws to them. Maybe we'll stop hearing about supposed refinery capacity shortages as a reason to jack up prices for no reason.
Reply | Report Abuse | Link to thisPulling gas hogs off the road is just a headline-grabbing bonus. The main goal here is to try to motivate people to spend $ again. To those who can afford taking on the payment, but were on the fence, this is having the desired effect.
Reply | Report Abuse | Link to thisIn case some of you still don't understand the concept, the biggest problem we face economically, isn't the crappy banks, isn't the housing bubble. It's that people saw it, and like they always do, cinched up their wallets, and are now no longer spending money. A functioning economy requires the circulation of money like a body requires the circulation of blood. No flow, no go. This is the prime motivation in our big evil governments desperate attempts to force the spending of money. All the various economic theories that people subscribe to are fine and wonderful, but they all require the circulation of $, and there is simply not enough of that happening to make any plan of action work at all. ...because what is good for us individually at times like this (sitting on your wallet), is not what is good for society and our nation, and it's a fast downward spiral to deflation and collapse.
You can hate the details like this program, but the fact is, they're doing what they have to every conceivable way they can right now. Some of it's going to be fluff. Get over it.
Yes, Your vehicle must be less than 25 years old on the trade-in date
Reply | Report Abuse | Link to thisJhenry
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Yes, Your vehicle must be less than 25 years old on the trade-in date
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