The Alliance of Automotive Manufacturers has declared the $1 billion-and-counting Cash for Clunkers (a.k.a. C.A.R.S.) program a success. The org doesn’t want any prospect of limited government (the “where do you draw the line” argument) to derail the four-wheeled gravy train. In fact, the Alliance wants the feds to re-up like a coke addict wants that third line. No surprise there. Still, there’s some interesting new info in their latest press release:
Automakers and automobile dealers have seen a significant increase in vehicle sales and dealership foot traffic since the launch of the CARS or “Cash for Clunkers” program. This increase in vehicle sales is generating important tax revenue for communities where in some cases roughly one-quarter of sales tax revenue is dependent on receipts from auto sales. And while the program has provided much need economic stimulus to the auto industry, it has also yielded significant energy security and environmental benefits.
Amongst Alliance members Ford reports a 9 MPG increase from trade-in vehicle to new vehicle purchase; GM reports a 54 percent increase in small car sales since the CARS program was launched; 57 percent of Mazdas sold so far under the program were highly fuel-efficient Mazda 3’s; 78 percent of Toyota’s CARS sales volume consists of the following vehicles — Corolla, Prius, Camry, RAV 4 and Tacoma, which average a combined 30 MPG; and Volkswagen reports over 60 percent of its CARS sales are clean diesel Jetta TDI’s which get an EPA combined 34 MPGs.
Assuming that half of the vehicles sold using the CARS program qualify for the 4 MPG-$3500 credit and the other half qualify for the 10 MPG-$4500 credit, CARS would provide an annual fuel savings of 45 million gallons of gasoline or an average gasoline savings of $450 a year for each new vehicle owner.That equates to an approximate 500,000 ton reduction in carbon dioxide emissions greatly enhancing energy security and reducing greenhouse gases.
We strongly urge the Senate to approve $2 billion in additional funding for the CARS program so that American consumers can continue to take advantage of these benefits.
The Alliance of Automotive Manufacturers has declared the $1 billion and counting Cash for Clunkers (a.k.a. C.A.R.S.) program a success.
You’re saying its not? Seriously? It has pretty much done everything it said it would do.
Nice to hear, but this news release reminds us of the slipperiness of numbers. “Ford reports a 9 MPG increase from trade-in vehicle to new vehicle purchase.” Yes, but now that the C4C beneficiaries have nice, reliable transportation, and since they won’t be worrying so much about the price of gas, they’ll probably be hitting the road a lot more. “We have a new car; let’s drive to Disneyland!” Some folks may wind up using more gas than before.
Just a nitpick. No biggie.
Where are these “highly fuel-efficient” Mazda 3s? I’m test driving the 2.0 and 2.5 liter sedans and while the 2.0 might be considered somewhat fuel efficient, the 2.5 sure ain’t.
Well, they’re better than they were.
And great cars for the price point as they like to say in the electronics bidness.
Every Uncle Sugar rush results in a hangover.
Those folks planning on buying a new vehicle in two or three years instead pulled the trigger now. This may be good for a temporary high, but it is not good for long term growth.
Those folks planning on buying a new vehicle in two or three years instead pulled the trigger now.
Or, it could be that people who usually by used are buying new. Ever think of that? That’s creation of new demand.
Of course, the projected gas savings assumes people will drive their new car *exactly* as they drove their old clunker. My 4×4 sits in the garage 5 days a week because it’s old and I don’t want to wear it out in the daily commute. If I buy something new, I’ll drive it very frequently until the warranty is used up.
But still, it’s tempting to trade the 4×4 in on a new daily driver to get the rebate, then trade the old daily driver in on a new Tundra or something that gets even *worse* mileage.
3, nay 6 cheers for the use of the Rebel Alliance logo. Star Wars woop woop!
As far as C4C is concerned, all I can say is I went from a 16 MPG car to a 29 MPG car (rated, I’ve observed 36+ mpg on my first tank). I’m happy about it.
Where are these “highly fuel-efficient” Mazda 3s?
Mazda 3s are some of the least fuel-efficient cars in it’s class that they deserve to be slapped with gas guzzler tax.
Or, it could be that people who usually by used are buying new. Ever think of that? That’s creation of new demand.
That’s not new demand, just different demand. Two parties still benefit from the transaction of used vehicles.
“Mazda 3s are some of the least fuel-efficient cars in it’s class that they deserve to be slapped with gas guzzler tax.”
My sister has had great gas mileage out of her new 2010 mazfda3. My b/i/l has checked every tankful and is averaging 36mpg per tankful, not just on a trip. And he drives fast and doesn’t baby it. He got 38mpg on one tankful.They even bought another 2010 mazda3 because they loved it so much. Like as mentioned here just get the small motor which still has plenty of pep. The 2010 has a five speed auto instead of the 4 speed auto the 2009 models have.
My 2009 Mazda3 (2.0L, 5-speed manual) is averaging 27 mpg in almost exclusively urban driving through the first 6,000 miles.
Many owners at Edmunds confirm their new Mazda 3s with the 2.0 engine are getting quite good highway gas mileage.
Of course the “enthusiast” would want the 2.5L. It does have a nice little kick to it and that 6th speed on the highway makes your forget there’s an engine up front. Am testing driving both side-by-side tomorrow. Which will win out?
@BDB:
Here are the successes of the CFC:
1. Greater indebtedness of the car-buying public, for some people who ought not to be buying new cars. Shades of the foreclosure debacle.
2. Delayed recovery of the automakers, since purchases are now being moved up. These buyers won’t be purchasing new cars next year, will they? And the sales bias has been toward non-UAW companies. So much for protecting American jobs.
3. Increased burden on American taxpayers who have no interest in helping others buy cars.
4. Development of an insatiable desire by automakers, dealerships, and the public for a constant stream of government incentives. Who will say it’s OK when the program ends? Why shouldn’t the taxpayers subsidize every car sale, and do so forever?
1. According to both reports from dealership workers who comment on this site and reports in the media, those who are taking advantage of this program by and large have excellent credit and are putting large amounts of cash down.
2. Again, many of the buyers are traditional late-model used buyers. This is creating lots of new demand that wouldn’t exist otherwise, not merely moving demand forward. As for the UAW, it has been reported that 47% of C4C deals have been domestic, slightly higher than their market share of 45%.
3. The multiplier effect will increase tax revenues.
4. After the consumer gets a kick-start of confidence, buying will pick up without government incentives. The government incentive is the spark, not the fuel.
Yes, I know the cognitive dissonance must be awfully painful for glibertarians everywhere, but this government program is a success. If this is too painful for you, just pretend its a targeted tax cut.
My only comfort from CFC is that the $1-3 billion spent on it is small compared to the other bailout costs.
Targeted tax cuts benefit a few at the expense of nobody (lost revenue is not an ‘expense’), while government rebate checks benefit a few at the expense of everyone. The government could have chosen to offer hefty targeted tax incentives for buying ‘greener’ cars, but instead chose to bill everybody for this program instead. Spreading the wealth, as promised.
MSNBC’s blog is reporting that Senators Feinstein and Collins are now in support of extending another $2B for the C4C program thanks to data showing strong fuel economy improvements on the trades done so far. A news conference is supposed to be going on about now.
http://firstread.msnbc.msn.com/archive/2009/08/03/2018512.aspx
The latest word from the NHTSA is that the program is good through this coming Friday at least.
http://news.yahoo.com/s/ap/20090803/ap_on_bi_ge/us_cash_for_clunkers_33
I’m standing by for the tidal wave of repos that will hit the market in six months as the lower income buyers who rushed into C4C become unable to continue the payments.