“Cash for Clunkers”: Truth Behind the Numbers

By J. Smith

08.08.2009

cars-programEveryone loves Cash for Clunkers (C4C to those of us in the trenches)-well, almost everyone.  They even love it in Nebraska.  The program, recently renewed by our beloved Congress, has been a boon to dealers, manufacturers and consumers (at least ones with old SUVs or full-size vans).

The intent, as most of our readers already know, is to (1) stimulate the economy, (2) decrease dependence on foreign oil and (3) improve the environment.  Trade in inefficient, polluting vehicles for more efficient, cleaner new ones.  Makes sense.  And the numbers we’ve seen show a long list of trucks and SUVs traded in for an equally long list of small, fuel-efficient cars:

  1. Ford Focus
  2. Toyota Corolla
  3. Honda Civic
  4. Toyota Prius
  5. Toyota Camry
  6. Ford Escape
  7. Hyundai Elantra
  8. Dodge Caliber
  9. Honda Fit
  10. Chevy Cobalt

Based on this, the program looks even more successful than proponents would have thought possible.

Or do they?  According to CNN, who got their data from the keen eyes at Edmunds-dot-com, the numbers of vehicles sold depends on how you look at the data.  The above list, compiled by the Environmental Protection Agency (EPA), breaks down sales data by engine, transmission, drive wheels, and hybrid status.  For example, the Ford Escape is number Six on the above list.  It’s available in six distinct versions (two- and four-wheel drive, hybrid, etc.).  According to the methodology used by the EPA, each version of the Escape is counted as a different vehicle.  Thus in the ubiquitous list above, the only version counted is the gas-powered front-driver.

Putting the data together based only on make and model produces the following list:

  1. Ford Escape
  2. Ford Focus
  3. Jeep Patriot
  4. Dodge Caliber
  5. Ford F-150
  6. Honda Civic
  7. Chevrolet Silverado
  8. Chevrolet Cobalt
  9. Toyota Corolla
  10. Ford Fusion

Needless, to say, this presentation of the data makes the program look a bit less eco-friendly.  And, at least in my opinion, it is much more accurate to present sales data on a make-and-model-basis.

Well, You say Day-ta, I say Dott-a.  As a former sociologist, I have to say the difference created by compiling the same data in two different ways is sort of fascinating.  But I digress.

Two points, however, as a pre-emptive strike-one against conspiracy theorists and the other against eco-warriors.  First there’s no evidence that the EPA cooked the books.  If you look at the fuel economy guide they provide, the Escape is available in six different configurations.  Thus, the six different C4C sales configurations.  It makes sense, in a bureaucratic way, that the EPA would continue to use its own model break-down.

Second, trading in a “clunker” truck or SUV on a new one significantly decreases atmospheric pollutants-new vehicles are much cleaner than their counterparts of just 10-20 years ago.  Heck, merely by being newer and in better mechanical condition, the new vehicles have better emissions.  And even a small improvement in MPG-going from 16 to 18, say-saves gas.  Especially multiplied by a few hundred thousand.

And it’s hard to argue against the stimulative effects.  My step-dad has worked in auto financing for two decades.  His business provides financing services to dealers.  The past 18 months have been the worst he remembers.  He spent most of last year out of work and in January moved to a different-and lower-paying-sector of the economy.  In the past few weeks, however, his business picked up after lying fallow for eight or nine months.  He’s been busy six days a week, morning-to-night.  And the same has happened pretty much everywhere.  If you don’t believe me, just Google  “cash for clunkers dealership traffic.

At the same time, the program proves that Americans still love trucks and SUVs.  And we probably won’t let them slip from our cold dead hands absent a gas tax.  But don’t hold your breath on that one.

Post-Script: The magnificent bastards at Jalopnik have also reported this story, as has the India Times.

Author: J.S. Smith

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10 Comments

  1. Ha, I thought there should have been a truck or two in the best-seller list. It’s not hard to meet the mileage improvement requirement of the program switching from an old to a new truck, and when I looked at that first list from the DOT, it didn’t seem right.

  2. America. Eff yeah. Sigh.

  3. The Gummit should have gone back much further in age for eligible vehicles and should have made the required fuel economy improvement tougher.

  4. I sort of thought the same thing, Vance. What really surprises me, though, is the presence of the Dodge Caliber on both lists. I’ve never read a review of it that has much good to say about it. I’m also a little surprised that the only mid-size car on the list is the Ford Fusion.

  5. The required 22 mpg cut out a lot of cars you would assume were eligible. It doesn’t need to be any higher.

    Wanted to get rid of my 93 F-150 so I started checking on cars I assumed would be OK. Solstice/Sky, V6 Stick Mustang, V6 Stick Camaro, 370Z, G6 Convertible – all came in at 21 average or lower, so no go.

    Picking up my new Mini Convertible tonight. Tried to stay with a domestic but really couldn’t find one I wanted.

  6. That’s a shame, my V-6 Mustang Drop Top(stick), gets 23.5 mpg real world in mixed driving, and since I’m in AZ, the air conditioner pretty much stays on from April to October.

    You have to wonder about the accuracy of these ratings.

  7. Mark in AZ, it seems to me that the ratings change of a couple of years ago lowballs the highway mileage. That’s just my observation as I have nothing to back it up except my experience and what other people say about their experience with highway fuel economy. Everyone seems to do a little better on the highway, and right about the same as the EPA rating in the city.

  8. Mark: Check out the article on EPA testing in the latest Car & Driver. Very interesting. Usually, people complain about not being able to meet EPA numbers, but it always depends on how you drive. My Chrysler 300 can average anywhere between 19 MPG and 25 MPG depending on how light my right foot is.

  9. I am very surprised the whole list isn’t crossovers.

  10. J.S.S.

    The Mustang replaced a Ford Ranger. The Ranger was rated at 24 city 28 highway. The best I could ever do was 21 on a long road trip, in mixed driving it got around 19.5. The revised ratings drop 4 mpg off both ratings, but still overestimated the milage by a good 4 mpg.

    The origninal mustang rating was 19/29 (23 mixed) so you would be right that it way overestimates the highway mileage and underestimates the city. The revised numbers knock 3 mpg off each, but there is still no way this car would ever get as good as 26 on a real highway or as bad as 16 in the city.

    (In town I drive fairly aggressivly, on the highway I normaly set the cruise control to about 4 over the posted limit(75 mph in AZ) which is about what everyone else does.

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