Cash for Clunkers Hits Goal in Five Days!
As a co-architect of the federal Cash For Clunkers (CFC) program and advisor to various congressional offices on the issue, it is gratifying to see how quickly it has been adopted by the American people. CFC achieves multiple goals -- it stimulates auto sales while increasing the efficiency of the U.S. fleet.
Congress passed the program in June of this year and it went into effect this past weekend. The $1 billion has now been used up in one week! That translates to more than 250,000 guzzlers and pick-up trucks traded-in for more efficient cars.
In the original bill, HR 520 and S. 247 the sponsors were aiming for higher efficiency gains. Those gains got watered down in the compromise bill of HR 2751. Now that it is clear how popular this program is I urge Congress to re-up the program with increased miles-per-gallon gaps between the vehicles traded in and bought.
The Cash for Clunkers program in Germany initially received 1.5 billion euros and when that was used up received another 3.5 billion euros. That translates to a $6 billion CFC program for a country with a much smaller market than the U.S.
Prior to the CFC program, automakers were selling cars at an annualized rate of 9.5 million vehicles for 2009. That compares with sales of more than 15 million cars only a few years ago. CFC will boost auto sales if we continue the program.
Given the dire state of the automakers in the US and the need to move away from oil before it spikes back to more than $100 per barrel we should add billions to this program.
American have voted with their feet and their wheels - they want to dump their clunkers and get more
efficient. They want to do their part to stimulate our economy - now it is up to Congress to do its part.
UPDATE - The house passsed a bill giving the program an additional $2 billion of funding. Unfortunately, they took it from the renewable energy loan guarantees. We should take the money from TARP - not from clean energy. Now the focus is on the Senate who was not consulted by the House before the House left town for weeks of vacation while consumers are feeling the pinch.
The author is Chairman of SmartTransportation.org
Follow Jack Hidary on Twitter: www.twitter.com/jackhidary
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Some simple senator/congressmen math:
Scenario:: The ecomomy goes into the toilet
Solution:: Imediately throw money into the failing banks that pay them their paychecks
Scenario:: Taxes on the wealthy are looking to go up
Solution:: Demand that this must not happen calling it "Redistribution of Wealth" yet secretly laughing because they just did that putting the poor americans money into the banks that pay them. If questions arise on the subject label it as "Too big to fail"
Scenario:: Someone finnally realized that just handing out $300 for nothing, or paving and reconstructing airports that no one really uses doesn't stimulate the economy,but if you help them buy more fuel efficient cars it will! LIGHTBULB!
Solution:: Drag your feet, piss whine and moan that this isn't going to be effective altho it has already proven itself. Start making up reasons why this isn't going to make the U.S. better like "They are not buying cars that are MORE effcient so we don't see why we should continue funding this"
Because ::
You can't have a use for a private plane Pelosi, if you don't have good enough private air strips all over the country.
Everyone else in the U.S. had health coverage, they would be just as good as you, yet we pay for your damn health care you morons!
If you actually stopped and thought about what you senators and congressmen do on a daily basis to the american people It would closely resemble rape,
Some Simple Gas Math on Cash for Clunkers††
Low in 1999 at $1.25
High in 2008 at $4.05
Average gas price *$2.80 per gallon over last 10 years.
Gas Mileage Average of Clunker 15.8 mpg.
into *100,000 miles = 6,329 gallons of gas purchased in life of the Clunker.
6,329 gallons x $2.80 a gallon is $17,721 for Clunker spent by consumer on gas.
Lets say Gas Mileage Average of New Car bought at 25 mpg.
into 100,000 miles = 4,000 gallons of gas purchased in the life of the New Car.
4,000 gallons x $2.80 a gallon is $11,200 for New Car spent by consumer on gas.
$17,721 - $11,200 = $6,521
That's a savings to the New Car Consumer of $6,521
x 250,000 cars sold = $1,630,250,000 total gas money and consumption saved in a little over 2 weeks.
The US spent $1B
And has delivered 630,250,000 millions in savings to New Car Buyers and has delivered 1B in incentive to auto dealerships, parts manufacturers, and auto makers creating jobs while lowering demand on gas, and lowering overall emissions and pollutants dramatically. The profits made by the Auto companies from selling 250,000 new cars at an spit-ballpark average of $20,000 per car at a 10% margin is half a billion dollars.
for complete article see http://www.christianmatthews.com/christianmatthews.com/newsmatthews/Entries/2009/8/3_just_the_gas_man.html
Cash for Clunkers hitsgoal in 5 days - that's one way to spin it. It just shows the incompetence of our politicians. They really have no clue on how much money is needed for how long. Today they allocated another $2 Bil. Yeah ... let them run healthcare. It'll just cost $1 Tril and then we'll allocate another $2 Tril. What's the problem? We are not paying for it - our grandchildren will.
Yes we will be paying for George Bush's two wars for a long time all right. (with absolutely no stimulus to the U.S. economy at all)
See Jack Hidary's Profile
Actually, the sponsors of the bill asked for $4 billion knowing that we would need far more than $1 billion it received. Cash for Clunkers should have been part of the stimulus bill, but was not included. That would have allowed it be more properly funded. Since it was outside the stimulus bill, it only received $1 billion which leads to today's predicament.
If you look at the German Cash for Clunkers program, it has received more than $6 billion to date since February. We are a much larger country and so should think about funding to at least that level.
Believe it or not, China was doing a cash for clunkers program last year.
http://www.treehugger.com/files/2009/01/beijing-to-drivers-stop-driving-we-pay.php
I'm certain not one Republican has utilized this socialist program -- they believe in the hallowed sanctity of free markets. Don't they?
Bobby Jindal probably will.
Aah the joys of suburban white middle class welfare! Trade in my gas guzzler to get an eco-friendly 18 mpg gas guzzler! One billion and counting. Are any Repubs protesting?
Anybody ever worries that the Austrian import in California is slashing SCHIP which serves poor kids? What color are those kids, BTW? Obama or Bush, some things just don't change.
High five.
See Jack Hidary's Profile
actually if you look at the data lots of consumers are trading in SUV's and pick up trucks for passenger cars that are much more efficient - average of a 60% increase in efficiency.
consumers are voting to go with vehicles that will cost much less to operate.
pls check the data before you criticize the program.
NAH NO EXTENSION NO MORE FUNDING, it actually worked congress won't vote on funding until after recess, so sick of this crap i am not broke enuff to get help, not paid enuff to aleviate the stress on my finances, it is like slow death, 3 steps forward 2 backwards..........
i really doubt congress and senate will move to quickly on this program, it is not war, or the banks,
and it is becoming obvous we need a revamp of congress and senate, to help out the president cause those guys are totally complicit in this and yes timmy needs to go, or get some ovesight,
he si too much busienss as usual
You’re right that the American People are anxious to move forward in so many ways. All they need is congress to provide the path. Give them a way to buy a more fuel efficient automobile and they jump at the chance. Give the people a strong, comprehensive public option for health care and they will jump into that too.
As far as the “Cash for Clunkers” it would absolutely the right thing to extend the program. But take the opportunity to raise the bar on the mileage requirement. And by all means let’s “buy American”.
Politicians --- sit up and take notice. Let’s move on health care, alternative energy sources, and lots more. We are ready.
Thank you for this great article on the auto industry's new program. We did an article on this today and basically linked viewers back to other articles. We linked back to this one, so I wanted to say thank you! You can view it at the below URL if you'd like.
http://www.frtv.org/2009/07/auto-industry-cash-for-clunker/
As far as the Cash for Clunkers Program:
1) It should be extended - maybe transfer TARP or 95% of the stimulus that has been untapped.
2) It should be applied to AMERICAN MADE CARS ONLY - just like Germany did in narrowing a similar program to German cars. I do not consider cars whose "final assembly" occures in USA from Asian made motors and transmissions to be American cars.
3) MPG needs to be adjusted for age of vehicle; my 13 year old Pontiac just slightly missed the mark. But it does not get the same mileage it got when brand new - no way, no how.
Limiting it to 100% (or close) might be too difficult. So maybe a sliding scale based on the percentage that is domestic and perhaps the efficiency difference too?
One example I saw was the Camry Hybrid vs. the Fusion Hybrid.
The Toyota is assembled in Kentucky while the Ford is assembled in Mexico.
The Ford gets better MPG though. So do you discourage the better fuel efficiency to encourage the domestic assembly? I don't know how their parts compare in terms of country of origin though, but they likely both have significant foreign content (e.g. the NiMH batteries as well as other parts).
My '91 Pontiac 6000 missed the mark, too.
This made no sense, I had to buy a car this week for my girlfriend (she's paying for it) since her '98 Subaru Legacy Outback was at 176k and had a single cylinder misfire. I found a deal on a used '07 Honda Fit in Manassas, VA and I live in Raleigh, NC. I drove her '98 clunker up hwy 15 through VA country for ~5 hours with the check engine light flashing and I purchased the Fit and drove home. The EPA says the subaru gets 21mpg, really it was getting less than 18mpg, the fit I'm is at least 35mpg. It made no sense to fix her car to then trade it in, it needed an engine or at least a valve job. Now, she would have gotten a new car if the subaru qualified, but it didn't, so I got rid of a problem car for $500 in a trade-in credit. It would be nice to get some credit for the CFC, but my main sticking point is that the CFC program rewards the dummies who originally bought guzzlers in the first place where it should really reward everyone increasing the gas mileage with a car purchase, I wrote papers 9 years ago against the gas mileage light-duty truck loophole that allowed SUVs to become so popular. That all being said, I do enjoy getting nearly 40mpg out of the new car and visiting the gas station a lot less frequently.
Ding.....
How about a replacement of older, non-energy star appliances, air condos, water heaters, furnaces, etc subsidy?
There is one. It's called the Energy Star Rebate.
See Jack Hidary's Profile
As a matter of fact, the rebates on old air conditioners and fridges were part of the inspiration for the cash for clunkers program.
There are still program in various states for getting a rebate to buy more effiicient appliances. check with your local utility.
See Steve Parker's Profile
Jack -
Kudos on the program's success. Anyone thinking there's no "pent up demand" for new cars in the US better think again ...sell 'em at a good price and people will line up to buy.
But --- next time try to 'architect' a program lasting more than four months and one which can be re-funded, reasonably, as necessary.
Ands don't let those congressional republicans ... from southern states with import car and parts plants ... try to ruin the bill. They almost killed it this time; they're on a mission to destroy Detroit ... and with it the UAW.
Steve Parker
Huff Post automotive blogger
Maybe on the next round you’ll re-architect the flawed system for judging what cars are worthy of subsidy, and require much higher mileage on the new cars before a voucher can apply.
I’ve heard countless stories of people with 20 year old cars that get 10 miles a gallon (regardless of what fueleconomy.gov says their mileage "should" be), who hoped to trade in those cars for a hybrid, getting 20 or more additional mpg than they're currently getting. Yet you disqualify those cars (because of The Chart), while okaying transactions where a trade-in that gets decent mileage is given a voucher to buy a new car that gets only a relatively small increase. Shouldn’t the goal be to get actual gas guzzlers off the road while stimulating sales of new cars that get seriously great mileage?
Why not create a method for dealers to test the real mpg of the trade ins (it's not to much to ask dealers to do something for all the new biz our tax dollars are stimulating for them) -- thereby qualifying the real clunkers -- then weight the subsdidy to a greater degree against the mpg of the new car -- which should be a lot higher than you're currently allowing.
Not to disagree with you that a program that identified real clunkers were better, but consider the potential for fraud if dealers were allowed to do the 'qualification'.
We submitted our purchase the 24th and are still waiting for them to release the car. If you are going to go after more funds you need to improve the process.
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