7/29/2009

List of cars eligible for "Cash-for-Clunkers"

You can view the list of cars here.

The program is primarily designed to stimulate the economy, with other supposed benefits in terms of reducing greenhouse gases. Owners of older cars get either $3,500 or $4.500 when buying a new car, encouraging the purchase of new cars.

But if you were even mildly gas-millage conscious early on, forget it, you won't get anything. It only rewards those who bought gas-guzzlers: the EPA spent a month evaluating 30,000 vehicle models made between 1984 and 2004, and decided that only about 8,000 qualify, the ones getting 18 miles per gallon or less. For instance, the Toyota Camry got too many miles per gallon. Ford Taurus sedans, except for some with V8s, don't qualify, but if you happen to have a Ford Taurus wagon, there are some models in some years that qualify. Among cars made in 2004, there are only six models listed as eligible -- all of them trucks or SUVs.

Especially odd is that it does not really matter how big of a difference in gas mileage between your old and new cars. Replacing an 18 mpg car with one that offers 22 mpg, gets you a subsidy. But you cannot get a subsidy if you replace a 19 mpg car with one getting 42 mpg.

It will make the country poorer to subsidize the purchase of new cars, but if it is to be done, it ought to make some kind of sense. If improving miles per gallon is the goal, a sliding scale that varied the subsidy with the difference in miles per gallon between the old and new cars would seem reasonable. If emissions from older cars is important, the subsidy could also be larger when trading in older cars.

There are many other weird details of the program. one is that used cars worth more than either the $3,500 or $4,500 subsidies are not eligible. Essentially rewarding people who have held on to old, cheap gas guzzlers very long, but do we want to reward such behavior? The thought enters your mind: if I buy a new car today with a low gas mileage, might I qualify a decade from now for a similar subsidy program?

And the weirdest is saved for last: the subsidy is only given if the old car is destroyed. Yes, that is right: the cars are to be destroyed. Well, destroying cars at taxpayer expense might be a "stimulus" for the automobile makers and the auto unions. But it simply means that money that would have been spent on other items is now being spent on cars. What is next? How about smashing windows in old houses? After all, newer windows tend to have better insulation and we could generate some new jobs in the window-making industry. Oh, wait, we forgot, there is another program that subsidizes the replacement of home windows.

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10 Comments:

Blogger Angela said...

I haven't even thought this all through, but I'm convinced this is just another way to shovel cash straight to the automakers.

I am the world's weakest negotiator, but even I could get $4500 off a sticker price of most of those cars with my beater as a trade in, no government incentives necessary. This isn't saving the buyers any money - it's compensating the dealers for destroying perfectly decent automobiles that would normally be cleaned up and resold.


Unbelievable.

7/30/2009 12:30 AM  
Blogger pops1911 said...

It's not about cars or fuel economy - it's about control & forcing people to buy certain vehicles to 'help' the auto companies. Again the pork-barrel has spoken & those with the most influence get the most incentives. Why was there no exclusion for foreign autos - BUY AMERICAN!! That would be 'help', but still a goal must be defined & sought out as you mentioned John. As usual they did not bother with that.

7/30/2009 7:54 AM  
Blogger Ellipses said...

Hey, if you have a POS gas guzzler beater, take advantage of it. If not, get over it.

7/30/2009 9:53 AM  
Blogger Martin G. Schalz said...

Hmmmm, older vehicles are destroyed in the name of the enviornment. What effect will this have on the used car market?

Has it ever occured to anyone that there is a segment of the population who rely on older vehicles as they cannot afford newer ones?

Every damn project or cause that is supported by the Obama administration has only been a payback to political entities, and does nothing to alleviate the problems of those in the lower social stratas.

Lies, deceit, and treachery. I used to think that Wm. J. Clinton was the best in that department.

Guess I was wrong.

7/30/2009 1:02 PM  
Blogger Rob K said...

I think the primary goal is to reduce the pool of available used cars, thereby moving already existing new cars. There is an amazing number of perfectly good used cars out there.

7/30/2009 1:13 PM  
OpenID vapidoscar said...

This is part of the war on prospertity. (I don't want to make a straw-man arguement but for simplicity I will use "they/them" to represent the liberal elite/enviro-statists/all around know-it-alls who think they would make better choices for you than you can.)

They were specific to only include (so called) gas guzzlers not clunkers. There are several points to this:

1) They think "You don't need them." Why should you have an SUV or pick-up truck when you could have a sub-compact and be 95% as happy. I believe this was calculated. The average family has a mini-van/truck/SUV as the "family car" and a sedan as the "comuter car". They want you to have to trade your family car and get a second comuter car.

2) "Reward poor decisions." They think that Americans make stupid decisions. According to the President Americans want fuel efficient cars yet they need to offer CARS to get people out of their Explorers and F-150s with a $4,500 bribe at tax-payer expense.

I could go on but I think this two points are the biggest.

There will be several unintended concequences. As Martin pointed out, this will have a negative impact on the poor who need to buy cars that are near the end of their useful life. The "junk-man" needs to buy an old truck that may only cost $1,500 but has another 100,000 miles left in it. As Dr. Lott points out, this merely incentivizes, what "they" consider, poor decisions. Fortunately, this plan was so small it won't do too much of either unless the plan is expanded.

The only thing I give them credit for is that it is not limited to american-only. We need a free market so we can get the best products at the best prices. We don't need more xenophobia.

This plan was forced upon us but even if the majority of people wanted this it would be wrong. Basically, it is using the government's abilty to legally tax the "haves" and give to the
"have-nots". We are not talking about food stamps or rent subsidies. We are talking about personal automobiles.

Sorry for the long post but I have a couple follow up questions: 1) Why was this plan so small if it is important? How much was spend on digital converter boxes? 2) This has been an administrative nightmare and it is already running out of money (months before predicted). Dealers have already sold cars and given $4,500 discounts and are sweating whether they will get paid. Since it was put on the dealers it is a PR problem for the dealers if they turn away eligible cars not the government. How hard is it to give out 200,000 checks? If they can't handle this; how will they handle nationalized health care?

7/31/2009 8:57 AM  
Blogger Troy said...

This program was truly ill conceived. The subsidy was much higher than it needed to be, they could have got more clunkers off with less tax money spent. It also is too much of a giveaway and it doesn't go to everybody. The rebate should have been strictly based on the difference in gas mileage and in direct proportion to that difference. Goverment doesn't work because there is no competition and no need for rationality.

8/11/2009 2:10 AM  
Blogger john..... said...

"List of cars eligible for "Cash-for-Clunkers" is a very crystal clear , interesting and engulfing post. i want someone to buy my car for cash so should i register in these cfc programs or should find private buyers who are ready to pay in cash. i dont want anything with th eautomobile companies i want to single handedly sell my car please suggest

2/20/2010 2:04 AM  
Blogger Term Papers said...

I think the primary goal is to reduce the pool of available used cars....

5/28/2010 5:28 AM  
Blogger Shaira said...

the old cars are gone because their are a lot of new high tech cars.

sell cars for cash

12/18/2012 1:42 AM  

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