The Cash for Clunkers program is now open for business. Theoretically, you can trade in that old pile of crap currently defacing your driveway for something shiny and new with up to $4,500 of government money. The idea is sound. It worked well in the European countries that did it in 2008. It could be a shot in the arm for car manufacturers, dealers, and all associated with the auto industry. It might even prod consumers towards more efficient vehicles that would lessen our oil dependence and help clean up the environment. Unfortunately, the plan was cobbled together by our esteemed representatives, proving that if you have a good idea that you’d like ruined it’s best to give it to Congress.
At $1B of funding, the program can help towards the purchase of roughly 220,000 vehicles (assuming that everyone gets the full credit). Even in a cataclysmic sales year like 2008, that’s a drop in the bucket. It won’t be adding a third shift or overtime at auto plants. It will help people who were thinking about buying a new vehicle in any case, and as such it probably counts as some relief for America’s middle class. But let’s be honest in a way that Congresspeople can’t really comprehend. People don’t drive beaters because they’re cool; they drive them because they can’t afford anything better. $4,500 is not going to change that situation. Consequently, the worst vehicles will still be on the road.
But wait, there’s more…
As the program stands, cars traded in under CARS will be destroyed (block shot and the rest of the parts sold). So the person who might have gotten a better vehicle than he was driving through the wonders of the used car market is out of luck. Lack of long-term, big-picture thinking must be a prerequisite to be a “lawmaker”.
The rules are, well, Congressional. The automobile to be traded in must be EPA rated at less than 18 mpg. In other words, the credit is mostly designed for those who purchased a giant SUV for no good reason and the few that have been keeping an old car running. If you plan on purchasing a “light duty truck” the new vehicle must be rated at 18 mpg or better; a 2 mpg improvement over your trade-in qualifies you for $3,500 and a 5 mpg improvement gets you $4,500. Should you choose a passenger car it must get at least 22 mpg; a 4 mpg improvement gives you $3,500 and a 10 mpg improvement qualifies you for the $4,500 credit.
This household consists of one 1987 Toyota Pickup (4×4) and one 2000 Pontaic Grand Am GT. The former would only be traded in after it was pried loose from my cold, dead hands. But it doesn’t matter because the Toyota doesn’t qualify. That’s right, a 23 year old vehicle with no modern emissions controls and a carburetor is not a Congressional clunker. I’d trade the Pontiac in for a Focus faster than you can say “Government Motors”, but it doesn’t qualify either. (Note: the ’09 Focus is EPA rated at 28 mpg, but i just spent 1300 miles in a rental that averaged better than 36 over the course of the trip…and that was with me making 300 miles in 3.5 hours for one leg of the trip. Yes, the EPA is full of governmental shit.)
So those of us who would gladly participate and improve the mileage of our vehicle dramatically are out of luck. Moreover, there have been reports of EPA ratings mysteriously rising above 18 mpg overnight for some vehicles. (The EPA says that they lowered some too.) Nor does the EPA take into account that a 15 year old vehicle does not, generally, perform as well as it did when it was new. Your real world results do not matter…probably because this is Congress we’re talking about, a group of people wholly divorced from real world results. And like the much-acclaimed new fleet mileage standards put forward by the Obama administration, the whole project is clearly designed to push consumers and manufacturers towards hybrids and the new class of kinder, gentler SUV’s that go by the name of “crossover”.
The ratings required of “light-duty trucks” are significantly lower, making it much easier to qualify for the full credit. What constitutes a light-duty truck/SUV is laughable. Chevy’s HHR is a “truck”. Toyota’s Venza and Rav4 are both trucks. The Ford Flex and Edge are trucks. And half of Subaru’s lineup (Forester, Outback and Tribeca) are considered trucks. Only in America would we define “truck” to include station wagons. You may remember how the SUV was a very profitable tool for auto makers to get around earlier versions of the CAFE standard. The crossover is the same trick with a new name, and it works wonderfully for the Cash for Clunkers program.
You’ll be hard pressed – unless you drive a king hell, PoS beater – to trade your passenger car in for another, non-hybrid, passenger car and receive the full credit. You could get that stupid Expedition out of your driveway and replace it with a passenger car, but many of us only feel safe in a vehicle that weighs 4,000 lbs or more. The solution is to trade the Expedition in for another, slightly less bloated rolling abomination and get $4,500 for doing so. Congratulations on gaming a system designed to be gamed.
So will you be participating in CARS? More importantly, when will we be able to trade Congress in for $4,500? That surely exceeds their combined resale value.