Cash for Clunkers Turns 15. Did It Do All It Was Supposed To? (No.)
I climbed behind the wheel of a used but loaded four-door Ford F-150 XLT pickup. It had a 5.4-liter V-8, an engine about which a mechanic friend once said, “If every vehicle came with that motor, I’d be out of business.” I checked the air and the heat; both worked. The stereo sounded good. The interior was clean.
I drove it from the back of a GM dealership to a bay in the service department. The automatic transmission shifted properly, the power steering worked, the brakes were fine. I pulled it into to the bay and handed the keys to a mechanic. He drained the oil and replaced the plug.
Then he prepared two quarts of a special oil replacement that was 40 percent sodium silicate and 60 percent water. He poured it in and started the engine. The mechanic gunned the accelerator a few times, then kept the truck idling at 2000 rpm. After about six minutes, the engine began to falter, and the mechanic applied more throttle to keep it at 2000 rpm. Soon the engine shook, rattled and died.
The truck then sat for an hour as the solution hardened. I was shaken more than I expected I’d be—this truck was nicer than the pickup I had at home that I used to tow my race car. To purposely kill it just seemed, well, cruel.
But that’s what the Car Allowance Rebate System, or CARS—known nationwide as “Cash for Clunkers”—did to 677,081 vehicles in the summer of 2009. Hard to believe it has been 15 years since the federal government funded the $3 billion program, and it has been essentially forgotten. But it was big news in 2009.
The economy was grim, with the auto industry hit especially hard after overproducing and underselling. (One Ford executive wryly confided that they were losing money on a bunch of sales, “But apparently we think we’ll make it up in volume.”) Chrysler filed for bankruptcy on April 30, 2009, with General Motors filing a month later. They got an $80 billion bailout from the federal government. Compared to that, the CARS allocation was pocket change.
But if CARS took more than 677,000 vehicles off the road, then it had to put 677,000 brand new ones back on it at a very dire moment for Detroit. New-vehicle sales were suddenly robust. Customers, trading in “gas guzzling” clunkers, got a credit on newer, more fuel-efficient vehicles. You had to buy a car with an EPA-rated fuel efficiency of at least 22 mpg, which got you a credit of $3500, or 28 mpg for a credit of $4500.
For the story I was working on, I went to multiple new car dealers to look over the collection of trades they’d taken with CARS. But there were awfully few legitimate gas guzzlers. Yes, the government said they had to average 18 miles per gallon or worse to qualify, but given the type of job the vehicle was built to handle, 18 mpg may not be so bad.
At the first lot, a Ford store, doomed CARS trade-ins included two Chrysler minivans with V-6 engines, and a very nice Ford Windstar minivan with a V-6, full leather interior, a six-disc CD player, and what appeared to be brand-new tires. Three Ford Explorers with V-6 engines, two Dodge Dakota pickups, two six-cylinder Jeep Cherokees. There was a clean Jeep Grand Cherokee Laredo with the 4.0-liter six-cylinder engine and a new set of Michelin tires, which alone probably cost at least $500.
And there was a white-over-red Ford Mustang LX convertible with a white leather interior. With a 5.0-liter V-8, it met the 18 mpg threshold exactly. Cash for Clunkers vehicles, by the way, had to be drivable—you couldn’t push your car with an already seized-up engine to the dealer and expect to participate.
I saw no land-yacht station wagons, no runout full-sized vans, no Chevrolet Suburbans, even. Relatively few of the Clunkers were, well, clunkers. The Obama administration, which backed the legislation, took it on the chin for that. Said the right-leaning Cato Institute: “Suppose each clunker was worth $3000 at a guess, that would mean that the government destroyed $2.25 billion of value.”
“Destroyed” is a bit of an overreach. Car recyclers had 180 days to part out the clunkers if they wanted, with the exception of the engine, which did have to be destroyed. (Break the rules, and there was a $15,000 fine.) Some proponents of the program complained about this—why let them sell parts if it just helps more clunkers stay on the road?—but a lot of the CARS trade-ins did indeed go straight to the crusher. A car’s engine is the most valuable piece of the vehicle to recyclers, and some passed on participating in CARS at all because of the limited amount of money they could make selling fenders off a Grand Caravan.
CARS began on July 1, 2009, and ended on August 24, after the $3 billion was exhausted. Congress originally appropriated $1 billion, figuring it would last until winter, but the money went so fast they had to ante up another $2 billion.
I followed that Ford F-150 to the salvage yard, where it was delivered the next day. Turns out they had plenty of F-150 parts and didn’t need any off this truck. It would go straight to the crusher in a few days, flattened and placed atop of a stack of crushed vehicles that looked like toy cars a child had stepped on.
Did I want to come back and watch? I did not.
Periodically, there has been talk over the years about bringing CARS back, but it appears to be one and done. In many respects, CARS played a successful role in preserving the American automotive industry; it did give the economy in general, and the auto industry in particular, a shot in the arm at a critical time. And, statistically, it did raise the average fuel mileage of the American fleet.
But did it take “clunkers” off the road? In a word, no.
Boy, nothing like another article to get the politicos blood boiling here. All this blame on the government or the republicans or the democrats. The government is inefficient and wasteful often but who is the government? Us. People who work for the government are just that, us. You guys act like it’s some alien beings trying to screw you over. The government is too big and bloated and until that changes there will be more bitchin and moanin about this issue and that and blaming the government for everything that goes wrong. If the automakers made a better product with better mpg ratings this would not be an issue. People could hold onto there vehicles longer and spend less on gas or electricity. The corporate world is as much to blame but most of you have to have your new car or truck and most do a terrible job at taking care of them to begin with. We continue to be our own worst enemy with this buy and sell throw away world we have allowed to be created.
Well said! After reading the article and skimming the comments, at no point did I see the crucial point about the program being voluntary. Car owners were not compelled to part with their property.
I’m working on a 63 Econoline pick up hot rod right now. The pic of the flat front Dodge on the scrap pile almost brought a tear to my eye.
Scariest words ever uttered…
We’re from the Government… and we’re here to help you.
Remember the old saying” couldn’t pour p*** out of a boot with the instructions on the heel”? I do.
Haven’t forgotten, Never will forget the tragic loss of valuable, cherished parts that were deliberately and hastily destroyed. Still makes my heart sink. In fact, I might go kneel over a toilet now and puke. Didn’t stimulate american auto makers and didn’t help out any of the people who actually needed a new car because they wouldn’t have been able to make payments on a new car even with a 4500 dollar credit. Meanwhile those of us who were just starting out with grocery store jobs were slapped in the face with inflated used car prices and oh… the reliable pushrod explorer- #1 on the list traded in. Wonder why I can’t find parts these days.
It was an obomination. I watched some amazing vehicles get destroyed, and I’ll be very surprised if any of the US built crap they replaced them with are still functional. ….and he’s still running the country. Wake up, people.
Agreed. The “ritual murder” aspect of purposely destroying the engines was creepy, and guilt inducing to motorheads (Will my old pickup come back to haunt me and seek revenge?)
my wife passed away and I was left with a nice 10 yr old BMW 5 series, needed some work. my daughter did not want it so it was smashed and we got the check. she bought a Nissan Cube which she took to California was stolen and wrecked in 4 weeks.
with that insurance $$ , she bought a rear drive only Jeep..no justice.
I wish I had saved the address of a stadium being converted to apartments just last year. STORED in the stadium for all those years were TWO THOUSAND clunkers from the program. Rusting away, dripping gasoline, oil, transmission fluid into the environment, into the land. I hated the program from the start– so eco insensitive, so wasteful when those cars should have been used in this country by those who needed them/other countries,. just a bad thing to start without any forethought as to consequences..
tl,dr; CARS would indeed have taken a clunker off the road, if only my wife would have settled for the loaded silver CRV…
…back in 2009 we had an old rusty Cherokee that we only kept around for stump pulling duty. I talked my wife into using it for a CARS deal on a Honda CRV. It was near the end of the program and we didn’t have much time. I managed to drive the poor old Jeep to the dealership despite one of the front rotors locking up every few miles. Then she didn’t like any of the colors on the CRVs they had on the lot, and I ended up driving that clunker home again. We finally donated it.
This is a great example of how government gets lobbied by businesses and the wealthy, we are essentially an oligarchy. The allure of campaign funds is too great for the political parties and politicians and the cash for clunkers got sold to the American public through a media system based on profits not truth or critical journalism. I had and still have an affinity for MN12 Thunderbirds (especially 96&97 V8s) they were cheap, reliable and easily modified but after the Cash for Clunkers debacle they became much harder to find and therefore more expensive. I would buy one today if I could find a good lower mileage one.
It really was just a thinly disguised way to help out the manufacturer’s with the government subsidizing a new car purchase.It really did nothing but destroy many good used cars and trucks. It was sold as a way to help the domestic auto industry to congress but in the end it helped the Japanese and Koreans much more.
I was just thinking about this program and what a short sighted waste of resources it was. This was when I was researching local recycling options for the struts I just replaced to keep them out of the landfill.
Don’t even get me started on the “too big to fail” bailouts and the impact that’s had on industries (see stock buybacks > R&D).
In Reality we Needed to control pollution (at least a little) I love the Old cars (have a 63 dodge) But I recognize that Climate change Has to be dealt with– There really can’t be many people Dumb enough to Deny Climate Change anymore–
Speaking as a small new car dealer, now retired. The program wasn’t perfect by a long shot. But it did allow us to survive and it preserved over 60 of my employees jobs. We had to wait for the dollars from the government and I lived I fear that either we would make an error or they would change the rules.
I remember the good ole days of wrecking yards when you could get anything and it did not break the bank. Want a project? Oh look, ask the neighbor if they want the old car in the field. As a teenager we’d get them running and drive them home. Today, it’s nearly impossible to find used parts for old cars at the wrecking yard. If you do they want an arm and a leg. If you find and old car in a field, the neighbor now wants 20 grand for it. The car manufacturers mismanaged themselves through arrogance then came crying. Cash for clunkers was a royal screwing, a scheme, and it created shortages, inflation, and all for something which is fakery proven time and time again when you find science unafraid to share the truth. BTW, watch out, and ice-age is coming, again.