Obama's "Cash for Clunkers" program morphs into "Bucks for Trucks"

Obama's "Cash for Clunkers" program morphs into "Bucks for Trucks"

CHICAGO – We bailed out the automobile industry and then created the Cash for Clunkers program, but what did many people really go out and buy?
From the feedback on my recent column about Cash for Clunkers, many people thought I was right on with the question about what we’re really going to get out of that popular program. The promoted logic of buying a new car to save money on fuel was also pretty lame. As my article pointed out:

An old car equals more cash for gas, but no monthly car note payment and a lower premium for older car insurance.
A new car equals less money for gas, but more money for a new monthly car payment along with bank interest if you don’t have 0 percent financing. A new car also means higher insurance because it’s a new vehicle. Do the math.

This hopefully won’t turn out like the subprime mortgage market with people defaulting on automobile loans in 12 to 18 months. This was a comment from several readers before and after the column. If you are truly environmentally conscious, what car makes the most sense for saving energy? Watch for the type of gas used (i.e. regular or premium, which affects fuel costs).

  1. A new 2010 Toyota Prius (hybrid engine, regular gas and 51/48 city/highway mileage).
  2. A used 1998 Bentley (6.75 liter, big V8, premium gas, 10/15 city/highway mileage, 6,200-pound vehicle)
  3. A new 2010 Ford Fusion hybrid (hybrid engine, regular gas, 41/36 city/highway mileage)
  4. A new 2010 Smart Car (1 liter, 3-cylinder engine, premium gas, 33/41 city/highway mileage, seats two)
  5. A new 2010 Chevy Cobalt (2.2-liter engine, 4 cylinder, regular gas, 24/33 city/highway mileage)

The answer for the most efficient car in this list is at the end of this column.
The Results Are In, or Are They?< Did we really save some car-dealer and automobile-industry jobs? When I looked last, the vast majority of vehicles reportedly being turned in were American. The vast majority of cars being bought were Japanese and Korean with only the Ford Focus being an American car in the top five. Many media outlets reported it that way in early Aug. 2009. The latest numbers now say it’s the Ford Escape SUV, Ford Focus, Jeep Patriot, Dodge Caliber and even the Ford F150 truck in the top five. What happened to the claim that people bought a lot of highly efficient subcompacts? They actually bought new trucks and SUVs instead of full-efficient cars. What numbers do we believe? Do we believe the U.S. Department of Transportation or Edmunds? The chart below shows the differences:

Source: TheTruthAboutCars.com

There were a total number of 690,114 vehicles that were purchased under the program. According to Kelley Blue Book:

Depending on where you read about the Cash for Clunkers program, you might get different results.
Trading Pigs For Hogs
When it comes to getting a new vehicle, people tended to go with what they had. Not many people were turning in a Ford Explorer and driving off in a hybrid or subcompact. What was bought, according to Edmunds, was more American brands like the Jeep Patriot, Dodge Caliber, Ford F-150 truck and the Chevrolet Silverado truck.
Why didn’t everyone run out and buy a hybrid? The intent was to get less fuel-efficient vehicles off the road and have people buy more fuel-efficient cars. Though a Chevy Silverado and a Ford F150 aren’t really subcompacts, I guess they get a couple more miles per gallon of gas than the trucks that were turned in for them.
Many media outlets got it wrong as far as the top 10 vehicles that were bought. I wonder if they will go back and correct their articles. I doubt it. The bottom line is that some want people to buy off on the whole idea of buying an alternative-energy car when the market actually bought vehicles that were closer to the ones they traded in.
Answer from above: “2” (the 1998 Bentley). It’s already built. The energy it takes to build a car is more than the energy used to run it. “2” is also the answer to the question of what vehicle you want to be in when you’re in a serious accident and the law of physics takes over. Here you thought you knew everything about the environment and energy.
Carlinism: Real energy savings can be obtained if you buy a used car rather than a new one. It takes more energy to build a car than it does to run one that already exists.
Recent columns by James Carlini

James Carlini is an adjunct professor at Northwestern University, and is president of Carlini & Associates. He can be reached at james.carlini@sbcglobal.net or 773-370-1888. Check out his blog at carliniscomments.com.
Follow daily Carlini-isms at www.TWITTER.com/JAMESCARLINI.
James Carlini has been asked to speak at the upcoming Department of Homeland Security’s Workshop on Aging Infrastructure in New York City later this month.
This column previously appeared in MidwestBusiness.com, and was reprinted with its permission.
The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of Wisconsin Technology Network, LLC.