First Cash for Clunkers, Then Clunkers to Trash

While the Cash for Clunkers, or CARS program officially started on July 1st, it was not until July 24th that claims were processed due to changes in rules. In less than a week most of the $1 billion dollars allocated to the program was almost gone. On August 6th, Congress agreed to fund the program another $2 billion dollars to keep the program running until its official end date of November 1st. And while right now the program is stimulating car sales and encouraging “would-be buyers out of the woodwork,” is the program really doing anything long-term for the economy, the auto industry, or for the people?

With an average rebate of $4,000, Cash for Clunkers provides the incentive some people need to get out there and buy a more fuel-efficient environmentally friendly car. But what does happen to those old cars that get less than 18 miles to the gallon? One of the conditions of the programis that the car is in working condition. Well the government first “requires the engine, transmission and other drive train components to be destroyed so they can’t be reused and continue to pollute the air and burn excessive amounts of fuel.” Then other parts are salvaged and the rest of the car is turned into scrap metal. So we have taken a working vehicle and recycled a small part of it. However, what the Cash for Clunkers program doesn’t consider is those who cannot afford to buy a working vehicle in the first place.

If the government is paying an individual at most $4,500 for a vehicle, you would think that someone else from a low income family could in turn pay $3,500-4,500 for the same working vehicle. While for the middle class citizen this car may be considered a “clunker,” for a low-income family it could mean reliable transportation—it’s even possible that the proposed clunked could get better miles to the gallon than most cars the family could afford. And this dependable form of transportation could lead to a better job, and in turn the family could move up into the middle class, in which case they could turn in their “clunker” for an even better car. I understand the idea was to “clean up the air,” but I do not believe all working vehicles under 25 years old should just be trashed. A range could be placed on the mile per gallon for the cars resold, for example 12 to 18 miles per gallon. Even if an individual switches from a 10 mile per gallon vehicle to a 12 mile per gallon vehicle (with an average driving distance of 15,000 miles per year), the individual could save approximately 250 gallons of gas. In this way, the program could stop penalizing the lower class, lighten the load on tax payers, and continue to stimulate the economy.