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Cash for Clunkers

Rethink, rebate, recycle.

August 18, 2009
Debra Lordan · Editor/General Manager
“Cash for clunkers” was extended recently, with another $2 billion added to the program that quickly expended its original allocation of $1 billion. The federal program offers rebates of $3,500 to $4,500 for low-fuel economy vehicles if the buyer trades up to a more efficient replacement. The object of the program is to incentivize new car sales, jumpstart production of vehicles with higher fuel efficiency and stimulate the economy, while moving the country toward decreased oil dependency and greenhouse gas production.


In order to qualify for the federal credit to buy a new car, the clunker must get 18 miles per gallon or less and must have been built in 1984 or later. The vehicle must be in working condition and have current registration and insurance. New cars purchased must get at least 22 mpg.


So how much gasoline will actually be saved? Former clunker drivers improved gas mileage by 9.6 miles a gallon, according to the U.S. Transportation Department. And in July alone, the program is reported  to have removed 250,000 clunkers from our highways. You do the math. We appear to be traveling down the right road, if ever so slowly.


Whatever you may think about an economic stimulus program that may increase our already unfathomable debt, the Car Allowance Rebate System (CARS, aka “cash for clunkers”) has been wildly successful at dealerships across the nation, including those on Maui. The impact was immediate as the reservoir of pent-up demand seemingly sprung a leak in the form of increased consumer spending through the rebate program. Based on the popularity of CARS thus far, government officials expect that the additional $2 billion will be spent by Labor Day.


According to a recent Wall Street Journal article, the CARS program “may offer the most bang for the buck in terms of jump-starting the economy.” According to another source, the “billion dollars for ‘cash for clunkers’ looks dramatically more efficient… than anything else Congress has passed yet.”


Congress is considering re-extending the program. Maybe they should also consider making rebates applicable for used cars with good fuel economy as well, for those who can’t afford or qualify for a new car, even with the program. And how about a similar government bounty program to eradicate other energy-wasting products, such as old appliances—washing machines that get too few washings per gallon, and Energy Starless refrigerators that, well, just aren’t cool anymore?


What happens to all those Maui cruisers? Once auto dealers receive their reimbursements from the federal government, they will send the vehicles to Kitagawa’s Towing & Transport and SOS Metals & Recycling to be decanted, de-mercuried, de-batteried, de-tired, compacted and shipped as scrap metal and recycled into more useful products, like Bud Light, Blue Moon and Red Stripe beer cans, for example....


All in all, the program is a good deal for consumers, car dealers and metal recyclers, the economy in general, and the environment. I’ll drink to that.


To determine whether your clunker meets fuel-economy requirements, visit www.fueleconomy.gov.

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Debra Lordan · Editor/General Manager

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