Cars.gov represents the URL genus which, from a 2006 perspective, is surprising for its existence alone. Though arguments could easily have been made against the strength of General Motors; Ford; and Chrysler; the recent past is home to some of the most successful automobile selling years in history. Now the federal government has tasked itself with inventing a new sort of stimulus package, one that sees customers heading to car dealerships to buy more fuel efficient new vehicles from struggling manufacturers.
The U.S. government’s plan includes a cap on how much rebate coin can flow out of federal coffers. Only one day into the “Cash For Clunkers” program, the government had already spent $17,000,000 of the $1,000,000,000 allotted for trade-ins of older vehicles.
“Cash For Clunkers” was a bit of a misnomer from the beginning. The legislation requires your “clunker”, also known as a used car, to be forfeited and scrapped in exchange for cash, but only if the owner of the clunker buys (or leases for at least five years) a brand new vehicle. That’s where Cars.gov comes into play. C-A-R-S equals Car Allowance Rebate System.
Ah, but there’s more. Not only must you hold off from invading the local federal building with a ‘70 Chrysler Cordoba expecting a cheque for $4,500; you must also abstain from perusing any new car dealership with similar expectations. There are restrictions on both the used car being traded in and the new car under consideration. The clunker must be less than 25 years old and, “Generally”, according to Cars.gov, “get 18 or less mpg”. Don’t head out to your local junkyard to pay $100 for a beat-up VW Jetta hoping to trade it in for the equivalent of $4,500, either. All vehicles meant to be traded in with the purpose of participating in CARS must be registered and insured for at least one year prior to the transaction. One more thing: The government will pay out a maximum of $1B or shut the program down on November 1 of this year, whichever comes first.
Restrictions apply on new vehicle selections, as well. Foremost among the government’s mandates for the new car is a reasonable MSRP, wiping the slate clean of vehicles priced above $45,000. If FuelEconomy.gov proves the car you’re trading in posts fuel economy numbers between 4-10mpg worse than the new vehicle you hope to buy, the rebate is only $3,500. When the difference is 10mpg or greater, count on a $4,500 discount. That covers the passenger car system.
For new trucks and SUVs, the $4,500 discount enters the conversation when fuel economy differentials climb above 5mpg. Jumps between 2-5mpg from your clunker to the new SUV bring about a $3,500 rebate. Combined fuel economy ratings of the new car being purchased must be at least 22mpg. For trucks and SUVs, you’ll need to find vehicles capable of 18mpg or better. Many large pickup trucks are in the second truck category, where (ironically), small improvements of 2mpg or more bear $4,500 discounts.
If your ears are ringing with a sense of restriction, that’s because the “Cash For Clunkers” program is restrictive for a reason. There’s not much point in taking older fuel efficient cars off the road. Nor is there an honorable purpose in putting more new guzzlers on the road, especially if they are bought with a huge discount at the expense of fuel efficient used cars.
Potential new vehicle consumers might not entrench themselves in the pros and cons, the direct effects and side effects, of the program as a whole. Regardless, critics will bring up three main problems with CARS. Start with the pricetag. $1B is a whole lot of money to prop up an industry that’s been propped up plenty. Then there’s the anti-recycling nature of the program. Dealers are required to scrap the cars - auto recyclers don’t get to scrounge around for quality used parts. Finally, will the program do any good? More than likely, Edmunds.com calculates, 200,000 of the likely 250,000 consumers who will take advantage of this program would have done so anyway. That translates to $20,000 of stimulus per extra sale, not a figure actively shared by the Feds.
Supporters of the system point to new fuel efficient vehicles being sold as the second greatest reason for its institution. Greater is the need for automakers and auto dealers to sell cars now. Thus, the forthcoming increase in the “units sold” column is seen as an obvious plus.
To put it simply, take any eligible inefficient car, irrespective of its low resale value, and use it as a $4,500 trade on some of the most popular cars in America. The list of 28+mpg cars includes the Honda Civic, Toyota Camry Hybrid, Volkswagen Jetta TDI, Chevrolet Cobalt, Ford Focus, and Ford Fusion Hybrid. Trading in a car with worse EPA mileage provides opportunity for 23-27mpg cars to be sought after. Think along the lines of Honda’s Accord, Ford’s F-150, or the Chevrolet Malibu, Nissan Altima, and Ford Escape, many of which make a rebate of at least $3,500 easy to come by.
Here are a few examples of perfect “Cash For Clunkers” arrangements you can work out between your used car, a new car dealer, and NHTSA. Far from an exhaustive list, this grouping hints at what can be accomplished if your current vehicular/financial situation is aligned with Cars.gov. By displaying some of America’s favourite vehicles - and other vehicles that should be favourites with the aid of the “Cash For Clunkers” system - you’ll see the difference CARS can make in your life.
Cash For Clunkers Chart
‘95 PONTIAC BONNEVILLE SSEi: $1,500 value, 18mpg
‘10 TOYOTA COROLLA S: $16,420, 30mpg
CARS-Adjusted Price: $11,920
‘97 ISUZU RODEO: $1,600 value, 15mpg
‘09 HONDA CR-V: $22,445, 22mpg
CARS-Adjusted Price: $17,945
‘98 HYUNDAI SONATA V6: $1,700 value, 18mpg
‘09 MAZDA 6 2.5: $21,350, 24mpg
CARS-Adjusted Price: $17,850
‘99 CADILLAC SEVILLE: $3,200 value, 18mpg
‘09 BMW 335d: $43,900, 27mpg
CARS-Adjusted Price With Diesel Tax Credit Of $900: $39,500
‘94 DODGE RAM 5.2: $1,800 value, 12mpg
‘09 CHEVROLET SILVERADO LS: $33,190, 15mpg
CARS-Adjusted Price: $28,690
‘92 SAAB 9000: $1,000 value, 18mpg
‘09 SMART FORTWO: $11,990, 36mpg
CARS-Adjusted Price: $7,490
Written by Timothy Cain