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.
dumb idea glad i didn’t participate
How many folks turned in their “clunker” only to have the replacement vehicle repossessed six months later, because the dealer got them in over their heads? Ridiculous idea from Obama and company. It cost us all in the long run.
Oh how fun it is to come up with fictional scenarios to be riled up about…
Signed by Obama, sponsored in Congress by both parties.
Another governmental Obama waste of money.
See above. Both parties need to take the blame as both parties sponsored it.
I remember that program and having a 6 cylinder Plymouth minivan that I wanted to get rid of. It sucked gas down at a rate that easily made the mileage requirement. Unfortunately the EPA rating was just above the cash for clunkers limit so I kept the POS for a while longer.
I seem to recall that at least a couple dozen “clunkers” were Corvettes. The whole thing is nothing but one big painful memory for car buffs everywhere.
A couple dozen Corvettes?! How did the world ever go on? This program affected a lot of people negatively but I don’t think the Corvette community was one of them. Pearl clutching over a couple plastic fantastic cars. Comedy.
Reminds me of the Push Pull and Drag sale we ran in the late 60s .An absolute amazing response. After all the pot lot guys had picked them over we ran out of room to store them. So next sale was buy a new car get a 2nd one for a dollar ,came to $1.03 with tax. Would send them down to the storage lot and have them pick whatever they wanted. A lot of teenagers got their first car from that ,all the leftovers went to the junk yard.
They didn’t name it cash for clubkers, so how did it not do what it was supposed to? Fuel economy rose, and automakers were helped. Those were the objectives. It did what it was supposed to do.
I did a CFC in 2009, my 4.3L 1998 S-10 had a leaking head gasket that was a easy fix, and I only had 130k on it’s clock.
But I chose a SoCal Dealer that had a 2009 Z-71 RWD Colorado discounted on their website, and it was a excellent deal.
I was this dealers first CFC buyer, they figured the rules out quick and got me into the new truck, I still feel that this was a good program, and it did help more than a few people I knew back then.
BTW, this was my 2nd new vehicle buy that I have done on the interweb, dealing with JUST either the fleet manager or the internet sales folks, it’s worked well for me, just shown the invoice, then paid their offer, given a tank of fuel and on the road home quickly !!!
I wonder why environmentalist at the time weren’t outraged. Oh, I know why, because programs like this one are never truly thoroughly vetted. Whenever I see something destroyed before its usefulness is gone, I cringe. The energy and raw materials (steel, rubber, plastic, which often means oil, glass, etc.) had already been expended to build these vehicles, and all of that was thrown away while using even more energy on an ill-conceived program.
And to respond to why we were destroying perfectly good vehicles that got mediocre fuel economy for new vehicles that achieved even worse fuel economy…well…you only have to look to our federal government again. I recall talking to a product manager at Jeep about a decade ago when the then new Wranglers were introduced. I asked him why they kept making the vehicle larger. His response stunned me. He said that the outgoing smaller vehicle was required by the government to achieve a specific fuel economy through CAFE; however, by making the vehicle larger, the vehicle was moved into the next size class and was not required by the government to achieve the greater fuel economy of the outgoing model.
We need the government to stop meddling in businesses.
I’m so tempted to echo your government-meddling sentiments but then I’m reminded of the Pure Food and Drug Act, the AnTI-Trust Act and, God forbid, the EPA. All addressed problems related to business that business chose to ignore (or preferred to perpetuate) in pursuit of profit. Problem is, once a bureaucracy is established it begins to work on perpetuating itself harder than it does in addressing problems that currently exist. The bureaucratic greyhounds must continually create new stuffed rabbits to chase lest someone notice they’ve accomplished their task and need to be dismantled.
I fear the words “I’m from the government and I’m here to help”, but sometimes it must and actually does.
Something not mentioned… a GENERATION of cars was removed from “inventory”, a GENERATION of kids who would have had to solve/work on/deal with owning an older car. Learning transferrable skills of troubleshooting, buying what one can afford even if a grandpa car, etc. Not saying everyone was affected but you see alot of comments of people saying ” you don’t see X on the road much”… this is why. Short turn gain for an unplanned long term effect. Idea and implentation not lining up.
Very sad to see that 85-86 5.0 Capri in that third pic. I blame the owner for that one.
my grandson has never forgiven me for trading his firebird for a honda accord.
We took in a absolutly pristine 1978 low miles Town Car we tried to get someone in one of the small B lots to buy it for the cash for clunkers $ so we would not have to kill it, got close but not enough to cover C@C and had to kill it. It was a bad day! Also remember a Ford Explorer that ran for hours and just did’nt want to die!
Wait a minute, the government didn’t fund it we the taxpayers paid for it.
CARS gave the American auto market to the Japanese and Korean manufacturers. Check the marketshares before and after. The Big 3 had very few (relatively) qualified models to sell for the program. I was there working in retail for one of the OEMs. This author may have followed an F150 through the process, but was blind to the big picture. “It saved the American auto business” not true. CARS rejuvenated the American Auto Market by giving it to Asian manufactures.