Cash for Waste
I've been silently fuming over the Cash for Clunkers program since it went live last week. According to the rules, the program contributes a $3500 or $4500 credit towards the trade-in of an inefficient "clunker" (defined as a vehicle < 25 years old that gets < 18mpg) for the purchase of a new "fuel efficient" vehicle. The rules define "fuel
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i don't understand why you are so upset about this program. it takes less efficient cars off the road and replaces them with more efficient cars... isn't that a good thing?
yes, the minimum increase in fuel efficiency is relatively small. But the good news is that many new cars have better than 22 mpg, so the bulk of new cars acquired from this program will have at least that 4 mpg increase (the Fit gets 33 mpg for example.) at the very least, it's causing people buying new cars to think more about the fuel efficiency of their car.
also, regarding the truck mpg efficency requirements- if someone is trading in a category 1 truck for a _new_ category 1 truck, i'd still expect a new category 1 truck to get better mileage than an old category 1 truck. so for example, if i were to trade in my car, a '97 dodge grand caravan with a combined mpg of 16 (i believe, a cat. 1 truck technically), for a brand new 2009 dodge grand caravan, with a combined mpg of 20, that's still a reduction of my car's carbon footprint per year of about 30%. shouldn't we be encouraging that sort of change?
it's fine to say that we should be doing more. we can always do more. but personally i think it's positive that the US government is stepping up to the plate on this issue at all.
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2. An opportunity was wasted to encourage the purchase (and thus production) of highly efficient cars.
3. This program benefits people who have enough money to purchase a brand new car, even with a $4500 credit. What's the average cost of the cars being purchased under this program? It's probably more than $15K, which means that the people who are benefiting from this program are people who have a spare $10K lying around. Furthermore, requiring the destruction of the running used cars means that they aren't available for purchase to people who can't afford a brand new car. Instead of bailing out the middle class, why don't we work on helping the unemployed, or the people struggling to make ends meet?
Do my beefs with this program mean that I think you should pass on the credit? Of course not. Go take what you can from Uncle Sam =)
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1. i'd like to see some data on this.
2. i believe that's what this bill is doing, actually- encouraging people to buy more fuel efficient cars.
3. uh.. again, i'd like to see some data to back up those claims. how do you know most of the cars are more than $20k? also, are you assuming most people are putting $10k down on their car? but yes, this is definitely a program for people who can afford a car loan.
3.5 (destruction of cars) i would like to point out that this program is not likely to attract people who have a perfectly good car in good condition and who were planning on driving it well into the next decade. it's not that juicy. my impression is that should attract people who are currently on the fence about buying a new car in the next couple years- perhaps because their current car is on its last legs and the cost of maintaining it is no longer worth it when they factor in the CFC program credit. in other words, you probably don't want to buy most of the cars that are being traded in.
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So in terms of energy use, there is definitely a benefit to getting a new, more fuel efficient car. But this doesn't address the environmental impact of the waste products generated in the manufacturing of a new car.
"...an average of about 75% of the weight of each End-of-Life Vehicle (ELV) is already recycled or reused, mostly through
parts reuse and recycling of metals." The remaining 25% ends up in landfills, and accounts of 0.3% of total UK waste.
75% recycled sounds pretty good, right? Oh wait, except that under this program the engines of the cars must be destroyed, leaving little incentive for scrap/recycling yards to buy them.
2. Yes, but it could have encouraged them to buy even more fuel efficient cars, unlike the dude that CNN profiled this morning who bought a new Chevy ElDorado.
3. The six cheapest brand new cars on the market range in price from $11,745-$14,865. (The 7th cheapest car is > $15K.) According to an article I read on CNN, the most popular purchase has been the Ford Focus, which has a base price of $15,520. I'm willing to bet that the majority of people participating in this program had a spare $10K lying around in a recession (or the spare money for a new car payment for the next five years).
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do you have an article reference for scrap yards not recycling vehicles at all because they can't reuse the engine?
2. sure. i couldn't find the chevy el dorado on this site http://www.fueleconomy.gov/feg/findacar.htm to do a comparison of an old one against a new one.. do you have a link to that article on cnn profiling the guy? i wonder what his carbon reduction was for his new car... anything?
3. hmm.. i'm not sure what you're saying here anymore. i had thought you were claiming people were buying relatively expensive cars with this credit- so these would naturally be upper middle class people who really don't need a credit to help them purchase a new car. but sounds like people are buying pretty cheap cars with this credit? so i guess i def. disagree that people who are buying these cheap cars just casually have $10k lying around. i'd be more likely to believe these are people for whom buying a new car is a relative economic hardship but may be pretty important for personal transit. i certainly don't have $10k lying around. >.< but of course, i DO have the ability to make monthly payments for a car, otherwise, obviously, i would not be considering getting a new car at all and i'd be really freaking out about having to put the money into my current car to fix it up to a reliable state again. i acknowledge that i am 'lucky' to be in that position. i also work very hard to be in that position (with the understanding that lots of people work really hard and still can't be in that position- so no offense intended!)
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of course, i wouldn't mind if the program also did things like- provide $4500 credit towards becoming a zipcar member or public transit memberships as well. that would be a nice additional option to add.
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1. Focus, 27-28mpg, $15,520 - $18,265
2. Corolla, 25-30mpg, $15,350 - $20,050
3. Civic, 24-42mpg, $15,305 - $26,850
4. Prius, 46mpg, $22,000 - $24,270
5. Camry,23-34mpg, $19,145 - $28,695
6. Escape, 20-32mpg, $20,435 - $33,725
7. Elantra, 26-28mpg, $14,120 - $18,600
8. Caliber, 22-27mpg, $16,460 - $24,840
9. Fit, 29-31mpg, $14,750 - $18,960
10. Cobalt, 25-30mpg, $14,990 - $23,425
Meanwhile, the top 10 tradeins are: (http://tinyurl.com/lytuee)
1. 1998 Ford Explorer, 16mpg
2. 1997 Ford Explorer, 16mpg
3. 1996 Ford Explorer, 16mpg
4. 1999 Ford Explorer, 16mpg
5. Jeep Grand Cherokee,19mpg (for a 2007 model, which i'm assuming is best in history that people would be trading in, it's likely they're older.)
6. Jeep Cherokee, 17mpg (again for a 2007 model)
7. 1995 Ford Explorer, 17mpg
8. 1994 Ford Explorer, 17mpg
9. 1997 Ford Windstar, 18mpg
10. 1999 Dodge Caravan, 17mpg
So, notice that:
1. All but 2 of the top 10 new cars bought get _more_ than the minimum 22 mpg.
2. Only 1 looks like it might be a category 1 truck, and even that one is 2 mpg higher than the federally mandated minimum (the Escape)
3. All but 2 have a starting price of under $20k - meaning their nearly all the cheapest cars you can get (though any car is an "expensive" purchase.
4. A lot of the people are trading in, what I would call, large family cars.
5. The top tradeins are all at least 10 years old (well, no years for the jeeps, but based on the rest)- so these are probably well used cars. since their arent' a lot of cars from the late 80's even though they are eligible, one possible thought is that 15-20 years is sort of the average life of a car and people just don't have drivable cars older than that in their possession.
6. People are trading in american cars for foreign cars! US car companies, get with the program!
7. You should never by a Ford Explorer : )
So, after all this, do you still vehemently hate this program? It looks to me like it's actually doing some good- and not just for the upper middle class or people who want to trade in their older big truck for another big truck.
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"The Detroit News notes, "Detroit's automakers accounted for 47 percent of the first 80,000 ‘Cash for Clunkers' sales, the Obama administration said today...which is above their overall share in the auto market of about 45 percent." The top-selling vehicle under the program so far is the Ford Focus. "Four of the top 10-selling vehicles are manufactured by Detroit's Big Three. Of non-Big Three purchases, the Transportation Department's preliminary analysis suggests that more than half of these new vehicles were manufactured in the United States."
Autoblog adds, "White House spokesman Robert Gibbs says the average fuel economy increase so far is 9.4 mpg; a 61% increase." Based on the first 80,000 sales, "83% of the vehicles traded in have been trucks, while 60% of the vehicles purchased under the program have been cars.""
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This program benefits people who already have a working car and have enough money to buy a brand new car. I'm arguing that these people doesn't need as much help as say, the unemployed, or the people living below the poverty line.
i'd be more likely to believe these are people for whom buying a new car is a relative economic hardship but may be pretty important for personal transit.
Uh, they already have a working car!!! How exactly is having a brand new car over a running used car "pretty important for personal transit"? You could argue that they'd be saving money in gas, but would the savings in going from 18mpg to 25mpg outweigh the cost of dropping at least $11K (or the equivalent monthly car payment) on a new car? I seriously doubt it. Assuming a 40 mile daily work commute, going from 18mpg to 25mpg saves you 3.11 gallons of gas per week, or about $7.75/wk. You'd have to drive that car for 1,419 weeks, or 27 years to make up the initial $11K new car cost.
i, being someone who is in the market for a replacement car, would probably buy a used car and resell my old car. which, based on at least that uk study, would not be great for the environment as you'd continue to have two not so energy efficient cars driving around.
But you'd have two less cars in a landfill! And while 80-90% of a car's energy consumption is in its "in-use" phase, that 10-20% initial energy investment is not insignificant. How many years would you have to drive the new car to offset the 10-20% energy downpayment that went into its production, vs the energy consumption of less fuel efficient used car?
So, after all this, do you still vehemently hate this program?
Yep. If this was about the environment, we'd be investing the $3B in electric charging infrastructure for all the EVs that are coming out next year, or in "clean energy tech" in general. Or we'd require that all the new cars purchased are hybrids. If this was about helping people negatively affected by the recession, we'd be investing the $3B in unemployment benefits, or job placement services, or health insurance coverage. The only thing it's about is bailing out Detroit, but if we just handed another $3B to Detroit, people would riot. So we placate the public by giving them new cars.
Does this mean I think you shouldn't take advantage of the credit? Of course not. Free money is free money, and I'd rather someone I knew personally got some, rather than nameless strangers.
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I really disagree. They have a "drivable" car. That car probably has yearly significant mechanical failures- it's 10-15 years old!
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Let's run some numbers. The trade-ins are averaging 15.8mpg while the new cars are averaging 25.4mpg. Assuming a 40 mile daily commute and $2.55/gal, this is a yearly gas savings of $633.
I can't find the average purchase price for the cars purchased under the program, so let's assume $20K. Thus, a "poor" buyer without any spare cash lying around would need a car loan for $15.5K, without putting any money down. No downpayment means you're probably paying a higher interest rate, so let's assume a high-ish rate of 8.5%. A four-year loan for $15.5K at this rate results in a monthly payment of $380, or a yearly payment of $4,560.
Subtracting our yearly gas savings gives us a yearly cost of $3,927.
The average "poor" person taking advantage of this program is only saving money (in the short term) if they were paying more than $4K/year on repairs for their old car.
Even in the long term, I don't think it's feasible to argue that this program is saving people a ton of money. Even if you save $2k/year on old car maintenance expenses and $633/year on gas, you'd have to drive your car for 5.88 years to make up cost of the new car.
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No doubt about it, I will not save money buying a new car for probably 4 or 5 years (although, I DO intend to drive any car I buy at least that long). But I will reduce how much I pollute the earth. It's the same reason I went with a tankless water heater when my old heater was dying a year ago- it's not cheaper in the short run - 3-4x more expensive actually. But while i'm using it, it is better for the environment (and in the long run, hopefully i'm in the house long enough to at least break even.)
Bottom line is- I'm going to own a car. And I'm going to drive it. Public transit in Pittsburgh just isn't good enough to not have a car.
But, at least my new car will have a more predictable cost for me- one I can account for in my budget, instead of randomly failing on me in significant ways at increasingly shorter intervals (an inconvenience at best and a safety hazard at worst). AND at least my new car is going to be a lot friendly to the environment. Since I have the money to (barely) afford to switch out my car with just a little assistance, I feel actually obligated to do so, even though it'd be cheaper for me to purchase a 2005 used car. Someone who's significantly poorer than me probably isn't going to buy a new fuel efficient car no matter what- unless the government is going to subsidize a larger amount per car. Like I said, this is for people on the fence about buying a new car- people who can't just casually buy a new, more fuel efficient car- but with a little help, can.
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I hear someone at Interbots is trying to get rid of their Toyota Echo (32mpg)...
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