Impressive numbers for the Cash for Clunkers program make it seem like a smash-hit
The dust has settled and the Cash for Clunkers stimulus numbers are in…and it seems like the Cash for Clunkers bill was a success, more or less. But, a closer look at the numbers suggests a few flaws in the program.
According to the U.S. Department of Transportation, the program was “wildly successful” with nearly 700,000 “clunkers” traded in for rebates on new, more efficient vehicles. For those cars, taxpayers (via the federal government) can expect to dole out $2.877 billion.
Here’s the rub – perhaps the fundamental rule of the Cash for Clunkers stimulus was to require people to buy new cars with a government rebate in exchange for their clunkers.
So, why doesn’t the amount of clunkers turned in match the amount of new cars purchased?
Cash for Clunkers update from the U.S. DOT touts impressive stats, but it just doesn’t add up
The number of clunkers brought in through this taxpayer funded stimulus program was reported as 690,114, according to press release in late August. That same release included a list of the number of cars and trucks purchased through the Cash for Clunkers Program, too. You would think that the number would be exactly the same, no? After all, the only way you could participate was to bring in a qualified clunker and buy a new car, right? Apparently not.
According to the federal government, 684,941 cars and trucks were bought through this auto industry stimulus program. That’s a difference of 5,173 cars and trucks. That means that more than 5,000 clunkers were traded in through the Cash for Clunkers stimulus and new cars were never bought. That’s 5,173 vehicles unaccounted for nearly $22 million dollars in government rebates potentially unaccounted for (the average rebate appears to be around $4,200).
As an interesting side note, the DOT press release does not tally the number of new cars and trucks sold – you have to root through the numbers and figure it out on your own.
Despite the thousands of missing cars and millions in unaccounted for rebates, the Cash for Clunkers stimulus effects are real
“American consumers and workers were the clear winners thanks to the cash for clunkers program,” said U.S. Transportation Secretary Ray LaHood. “Manufacturing plants have added shifts and recalled workers. Moribund showrooms were brought back to life and consumers bought fuel efficient cars that will save them money and improve the environment.”
Whether you share Secretary LaHood’s enthusiasm or not, the auto industry got a much-needed shot in the arm from the Cash for Clunkers program. With increased demand, auto makers are reporting production increases; have added extra shifts at their plants; and officials are expecting lasting effects that will result in 42,000 jobs in the second half of 2009.
Environment gets relief from the Cash for Clunkers program
Of the cars traded in and those bought, the result is more cars on the road that get better gas mileage. The average miles-per-gallon (mpg) of clunkers traded in was 15.8 and the new car average was 24.9 mpg – a 9.2 mpg improvement, or 58%.
According to the U.S. DOT, 84% of trade-ins under the program are trucks, and 59% of new vehicles purchased are cars. “The program worked far better than anyone anticipated at moving consumers out of old, dirty trucks and SUVs and into new more fuel-efficient cars,” the press release read.
With questionable numbers and many criticisms of the Cash for Clunkers bill, the overall result is lacking
The fact is, many more people wanted to participate in the Cash for Clunkers program than were able to. Most people with clunkers couldn’t afford to buy a new car even with the tax-payer subsidized rebate. Of course, the original funding for the program was spent in a week and Congress approved additional funding, but many still complained about the short duration of the Cash for Clunkers stimulus plan.
And, despite the DOT’s claim of 42,000 expected jobs and minor increases in nation economic growth, the actual duration of the program’s stimulus is questionable.
Cash for Clunkers gave us a lot of ‘ifs’ when it came to selling your car. BigBucksAuto gives you cash when you want to sell your car.
The Cash for Clunkers bill was not the wild success that the government claims. Clearly, something is wrong when more than 5,000 vehicles and more than $20 million are unaccounted for. The stimulus aspect of Cash for Clunkers seems temporary and the environmental benefits are tough to imagine considering the thousands upon thousands of gas guzzlers still on the road.
With Big Bucks Auto, selling your car comes with none of the hassle of a troubled federal program, full of restrictions and red-tape. We’ve been in the business of buying cars for years, and our easy process means a fair price for your vehicle. And, the only rule about what you can do with your cash is simple – anything you want.
Take a look at how we buy used cars and give us a call at 1-888-44-BUCKS or 1-888-442-8257.
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Tags: automobile industry bailout, automobile industry impact on us economy, automotive industry news, cash for clunkers, sell your car
