The “Cash for Clunkers” program that we told you about on June 19 has received a shot in the arm in almost-last-minute actions by the House and Senate. They approved an additional $2 billion to continue the unexpectedly popular rebate program through Labor Day.
Opponents of the program feel like:
Richard Shelby, the top Republican on the Senate Banking Committee, said the program “has squeezed months of normal activity” into a short period of time.
But NPR’s Planet Money pointed us to at least one couple who wouldn’t have bought a new car if it weren’t for the program.
And though rebates are reportedly difficult to process, dealers and automakers love the program:
“There is no question that ‘cash for clunkers’ has succeeded,” said Dave McCurdy, chief executive of the Alliance of Automobile Manufacturers, the chief trade group for General Motors Co, Chrysler LLC, Ford Motor Co, Toyota Motor Corp and other big carmakers.
Have you participated? If so, were you going to buy a new car, anyway?
“Cash for clunkers” gets a $2 billion boost, John Crawley, Reuters, August 7, 2009
Editor’s note: The program which was once suspended is still available through Labor Day, 2009.
Yesterday the U.S. Senate passed a War funding appropriations bill that paradoxically included a piece of legislation popularly referred to as the “Cash for Clunkers” program.
In an earlier article where Flexo pointed out the weirdness of including “guns in national parks” legislation in a law about regulating the credit card industry, reader TJJ added a comment alerting us to the “Clunkers” program being inserted into the War funding bill. TJJ was right, and so here we are. Lawmakers attach irrelevant legislation as part of larger, more popular legislation.
So that’s the first thing that doesn’t thrill me about the Clunkers program. The second is the name. A “clunker” is a car that doesn’t work anymore. Yet, this program only applies to used cars that are still in drivable condition.
Image of an actual clunker courtesy of Mike McCaffrey
More importantly, I think it offers too much for too little. There’s a $3,500 credit for trade-ins that improve your mileage by 4 MPG, and $4,500 for a 10 MPG upgrade.
I would’ve liked to see a program that required the new car to get at least 30 MPG, a number high enough to actually make some kind of impact on our dependence on foreign oil. Maybe I’m too accustomed to getting 45 MPG, but I view mileage over 30 as easily achievable with any kind of car, and it seems ridiculous to entice someone upgrading from, say, 14 MPG to 24 MPG.
So, much like the new energy efficiency tax credits, I think this is a case where if you were already considering trading in your car for something that requires fewer trips to the gas station, there’s never been a better time.
I’ve said it before, but here it is again: even if you don’t agree with a new law, if it makes sense for you to save some money under it, you might as well take advantage of it.
How the ‘cash-for-clunker’ plan would work,James R. Healey, USA TODAY, June 10, 2009
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