Obama’s Cash For Clunkers 2009 Explained
I’d be really interested to hear why someone would get the same amount of money if they trade in a truck/suv but only get a smaller increase in mpg than someone trading in a car. Any chance you can look into this? Since I don’t trust detroit or their lobby, I would guess someone in congress caved on this one so that people would trade in their older SUV for a newer one that might get a couple extra mpg.
Joe, while I bet that you are correct to assume that the law’s final form was detrimentally influenced by the Detroit lobby, there is still a fair bit of logic behind the bill.
First, let’s reiterate something that I’ve talked about before: Miles Per Gallon is not a very accurate way of measuring the fuel savings associated with getting better gas mileage.
A better way to look at it is Gallons per 100 Miles.
||Gallons per 100 Miles
||10,000 Miles at $2.50
The basic premise of the government’s Cash for Clunkers program is that replacing fuel inefficient cars is one of the easiest/cheapest ways to cut carbon output.
Replacing a car that gets 17 mpg with a car that gets 25 mpg saves about as much gas as replacing a car that gets 25 mpg with one that gets 50 mpg. Thus, rather then giving everyone Prius’s (remember, Obama’s already promising both rainbows and unicorns) its cheaper to get the older “clunkers” off the road.
That’s Great In Theory, But…
About 7 tons of CO2 are emitted in producing a new car. This means that the new car, if it uses one Gallon Per Mile less than the trade-in would be carbon-neutral at 70,000 miles.
That means, for the most part, that you’re looking at needing at least a three mpg fuel efficiency increase to be carbon neutral at 70,000 miles.
In order to be carbon neutral at 30,000 miles:
12 MPG must be raised to at least 17 MPG
13 MPG must be raised to at least 18 MPG
14 MPG must be raised to at least 21 MPG
15 MPG must be raised to at least 23 MPG
16 MPG must be raised to at least 26 MPG
17 MPG must be raised to at least 28 MPG
18 MPG must be raised to at least 31 MPG
But What About Joe’s Question?
In the current economic environment, and given the other ways this money would be spent by the Democrats, I’m not really opposed to the program.
First, this Cars for Clunkers program is properly looked at as a way to exchange a vehicle that gets less than 18 mpg for a car or a truck. The way CNN presents it, the initial impression is that you have to exchange a car for a car or a truck for a truck.
That is not the case.
Second, this Cars for Clunkers program should really be looked at as a way to get SUV’s off the road, not cars. Any vehicle redeemed for a voucher under the Cars for Clunkers program needs to be rated at less than 18 mpg. There are far fewer cars than SUVs on the road that get less than 18 mpg.
The vehicles turned in under the Cars for Clunkers program will be predominantly SUV’s.
So, should buying a car get you a bigger voucher than buying an SUV?
On the other hand, none of this is really going to do any good global warming wise. Eventually, the solution is to either innovate our way out of it or everybody takes four steps up the hill.
Paying people to drive cars that get 35 mpg isn’t going to solve anything.
Its All About the Unions Anyway
For those of you thinkin’ this is all just pork disguised as a green movement, yeah, you’re probably right. Its just one Democrat special interest group scratching the back of another. Just ask the Senator from Michigan.
“This is a big victory for families across Michigan and across our country,” said Stabenow. “This is a bill that saves jobs and helps small businesses affected by the economic downturn, all with the added benefit of helping the environment. This program will provide an economic stimulus at a time when hardworking families need it most.”
Under the program, consumers may trade in their older vehicles and receive vouchers worth up to $4,500 toward the purchase or qualified lease of a new, more fuel-efficient car or truck. The program will be authorized from July 1, 2009 to November 1, 2009 with $1 billion in emergency funding.
The trade-in vehicles must:
• Be in drivable condition
• Be continuously insured and registered to the same owner for at least one year
• Have a combined fuel economy value of 18 mpg or less (Work trucks must be pre-2002 regardless of mpg)
• Not be more than 25 years old with historic or aesthetic value. These vehicles are valued by hobbyists or are a valuable source of restoration parts.
• The new vehicle must have a manufacturer’s suggested retail price of less than $45,000.
• Passenger Cars: The older vehicle must get 18 mpg or less. New passenger cars with mileage of at least 22 mpg are eligible for vouchers. If the mileage of the new car is at least 4 mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new car is at least 10 mpg higher than the old vehicle, the voucher will be worth $4,500.
• Small Trucks and SUVs: The old vehicle must get 18 mpg or less. New small trucks or SUVs with mileage of at least 18 mpg are eligible for vouchers. If the mileage of the new truck or SUV is at least 2 mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new truck or SUV is at least 5 mpg higher than the old vehicle, the voucher will be worth $4,500. (More…)
Or, why not just inflate your tires properly.