No Cash for Clunkers

Princeton economist Alan Blinder recently proposed a new government program he christened “Cash for Clunkers” in an article in The Times‘s Business section.

Under the program, the government would buy back old cars at above market prices and scrap them. According to Blinder, this would accomplish a policy trifecta: 1) help the environment by getting the most polluting cars off the road; 2) stimulate the economy by getting money in the hands of people who will spend it and increase the demand for new cars; and 3) reduce income inequality by funneling the money to the poor.

I am skeptical of this proposal for a number of reasons.

This plan has the general feel of a gun buyback program, but instead of buying crappy old guns the government is buying crappy old cars.

When it comes to gun buybacks, both the theory and the data could not be clearer in showing that they don’t work. The only guns that get turned in are ones that people put little value on anyway. There is no impact on crime. On the positive side, the “cash for clunkers” program is more attractive than the gun buyback program because, as long as they are being driven, old cars pollute, whereas old guns just sit there.

Still, my guess is that unless the price the government pays for the clunkers is very high, the majority of vehicles that are turned in will not have been driven much, if at all. Indeed, I suspect one of the most visible responses to this program will be a new market for mechanics fixing up cars that don’t run at all just enough so that they can be driven to the government’s lot to collect the cash.

The biggest problem with this policy, however, is the way it distorts long run incentives. Let’s say the rules of the program say that a car must be at least fifteen years old to qualify for a big government subsidy to scrap it. This gives powerful incentives to people with twelve-year-old cars they were planning on scrapping to keep driving them for three more years to collect the government bounty. Instead of reducing the number of clunkers on the road, this program could actually lead to an increase!

It also seems to me that any effect on the demand for new cars would be extremely limited. People who drive clunkers are generally not in the market for new cars. Presumably their replacement car will be a used car. The increased demand for used cars will lead to higher prices for used cars, which will push some buyers towards a new car, but the likely impact on new cars would be small.

Finally, it is not even clear that this program would have such beneficial redistribution effects either. In the short run, it would represent a windfall profit to those who own clunkers. In the long run, however, there is a market for used cars. In response to the program, the price of nine-year-old cars would have to rise enough to offset the increased value associated with a near-clunker someday becoming a clunker that can be sold to the government. The benefits of the program will actually be spread widely over all car owners, not narrowly focused on the poor.

This program highlights some general concerns that arise with government programs. The first is that policies which might be a good idea if implemented as one time, short term programs, can be much less attractive if made permanent because of the way they distort incentives.

I suspect that even if this policy was introduced as a one time program, it would be extended because there would be a constituency for it. The second thing this program highlights is that it is extremely difficult to deal with negative externalities (in this case pollution) by subsidizing them (as this program does). If folks are doing things that we want less of, it makes a lot more sense to punish them for those behaviors (through extra taxes for instance) than to reward them.

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  1. d says:

    This may be a naive question, but if we want people to drive less but work and invest more, why wouldn’t we just increase taxes gas and energy and reduce taxes on income and capital gains a corresponding amount?

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  2. Robert says:

    Spain run a similar scheme called “Plan Renove” (renovation plan) that addressed some of your concerns.

    You could only apply when buying a new car. You handed in the old one, got the money from the gov and used it to help paying the new one.

    If I remember right they gave you $500 for a 10+ years old car.

    At least in Spain it worked quite well, as far as I am aware. We had quite an big “fleet” of old Seats, Renaults and Citroens that you don’t get to see anymore.

    I don’t know if there is any correlation or not, but now (I don’t know how it was before) the price of second hand cars in Spain is higher than in other EU countries like France and the UK.

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  3. NM says:

    Raise the tax on gas. Subsidise small, energy efficient cars. That’s what we do in Europe. It works. You won’t do it.

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  4. CH says:

    You’d think that current gas prices have done a lot to dissuade peeps from driving clunkers. If I still had my 83 Impala, I’d be all for this silly program. But the last five years of high gas prices would have been awfully painful.

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  5. econobiker says:

    Didn’t California want to go this route about 10-15 years ago?

    Another problem is who decides what is a “clunker”? Is it emissions versus body damage evaluation? And just who says the old cars are more polluting? Don’t most places have some sort of emissions programs already in place?

    As an example recent gas price increases suddenly made 10-15 year old Geo Metros worth alot more due to their miserly fuel use. How can a 15 year old car that gets 30-40 miles to the gallon be worse than a 3 year old car that gets 24 miles to the gallon?

    Another issue is when the government (local,state, federal) “suddenly” puts penalties on owning “clunkers”, the classic car folks (who usually own multiple cars- which reduces emissions overall) start to get wound up about it.

    Yes “People who drive clunkers are generally not in the market for new cars.” And usually never will be. I could also see this enabling a “grey” market for “clunkers” sourced just for the buy back as Levitt suggests.

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  6. Ken Waller says:

    General concept of program has merits. Details need to be worked out to avoid problems you cited. For example, have a sliding or pro-rated scale for the age of car, instead of wating extra 3 years on 12-year old car to junk it when 15 years old.
    If you are not aware, people are junking old cars because the price of scrap metal has gone up. If you want to encorage new purchases, how about making auto loan interest deductible. Let’s stop using home equity loans for purchasing large SUVs.
    That brings us to the subject of jobs – if there are no jobs, then any program like this will not work. If people had good jobs, they would be out there buying new cars with better gas economy.

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  7. Brian says:

    What if they just had government buyers that looked for used cars that are already on the market and purchased them. They wouldn’t need to do any marketing (in fact, they would probably want to keep the program as quiet as possible) and they would probably be able to negotiate a better price for the car (depending on the buyer of course).

    This probably wouldn’t stimulate new car sales much, but it would get some of the worst cars off the street and there are plenty of decent used vehicles out there (if the issue is pollution and gas usage).

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  8. Brad Franzwa says:

    The automotive battery programs are a good example of this. When buying a new battery, one has to turn in an old one or pay a hefty fee. The program results in fewer caustic batteries sitting behind the garage, an environmental nightmare. The automotive trade-in deal could work the same way and has the effect of getting the old clunkers off the street.

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  9. Speedmaster says:

    Well-stated! It’s so important to look at incentives and secondary effects, not just intentions.

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  10. Helen says:

    Until “new” cars make more use of recycled materials (steel and other components), trying to shift people into new vehicles will be net negative for the environment, I think. Amortizing the lifecycle costs of car and truck manufacture, use, and disposal over those extra 3 to 12, heck, my father-in-law drove his Jetta for 20 years – makes a big difference. If many more people decided to artificially shorten the life of their vehicles, we’d have a much worse problem.

    That said, I do think that targeting programs like this at high-use (and thus massively high emission) clunkers — ancient taxis, buses, commercial trucks — could yield a very good “environmental” return.

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  11. Paul says:

    Re: #1 d: Because that’s tough to do politically. Candidate X doesn’t care about poor people, he raised gas taxes! McCain is playing that card on Obama for not embracing the gas holiday despite the fact it doesn’t even work.

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  12. Scott says:

    econobiker is correct, California started a similar program almost 20 years ago. Here’s why I make my jab about New Yorkers thinking they are the center of the universe :)

    I do agree that the program is worthless. From a Freakonomics point of view, we can ask when does an automobile get retired? I would say, it’s when the cost of repairing is greater than the total value of the car. Anyone who has owned a car can admit that repair bills can add up fast. $1200 wouldn’t even cover the labor cost of an engine overhaul.

    My advice to New York…forget the Cash for Clunkers program, the cars will fade out naturally. Focus on incentives to buyers of efficient new cars. Start programs for low income buyers, with incentives, to purchase efficient used cars.

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  13. Mike B says:

    A better, more sustainable program would be for the government to certify carbon offsets for vehicles taken off the road based on how much useful life they have left (computed from millage and vehicle age). Vehicles are turned in, given an analysis on the amount of CO2 saved if the car is scrapped now as opposed to when it will naturally stop working (compared with a target average CO2 level so you won’t get $ for scrapping a Geo Metro) and then allow a private car dealer accepting/scrapping the car to sell a carbon offset of the same amount. The competitive dealer would provide some or most of the offset to the owner of the vehicle on top of the normal trade-in value they can expect today. The dealer then ensures that the car never drives again.

    This programme has the desired environmental effect, prevents scams involving “dead” vehicles or efficient vehicles and properly incentivizes drivers to ditch their vehicle by factoring in environmental benefits. Now of course you’ll need a robust carbon trading marketplace and enforceable caps would give the offsets significant value.

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  14. GW says:

    With scrap rates currently over $300 / ton, why does the government need to get involved in doing this at all?

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  15. Jes says:

    The government could do what Germany does: have vehicle registration costs based on fuel consumption, safety and other factors that make old cars too expensive to use and create incentives for new cars and new car technologies.

    German vehicles also have to pass safety inspections like *we used to have in the 1950s*: the German version goes beyond broken headlights and tire wear to include cosmetic damage on the car body which can “condemn” you vehicle off the road.

    You will see nary a clunker on the German autobahns because of these policies and rules. No doubt these policies helped Germany to sustain *four separate* major auto companies during the post-war years: Daimler, Volkswagen, Porsche and BMW.

    The downside for the US if we followed this lead is that we don’t have alternative transportation readily available for all the vehicles that would leave the roads but never be replaced for economic reasons. However such situations are transient and could be dealt with in some fashion to help ameliorate the temporary impact.

    Given the unparalleled abyss the US economy is still plunging head-long into, it might be wise to consider what war-ravaged economies did to survive the post-war years.

    Nonetheless there seems to be no courage on the part of either politician or citizen generally to do something like this that might actually be effective because abject fear of the short-term discomfort.

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  16. sw says:

    Another problem with these programs arises from the fact that some of the vehicles that are being retired may have been imported from other jurisdictions. Although from an environmental stand point it probably shouldn’t make a difference, most organizations that implement these programs are trying reduce emissions in their jurisdictions and not trying to subsidize the reductions in emissions for other jurisdictions. This makes it quite difficult to measure the impact of the program on the area that it is designed to help.

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  17. foo says:

    >As an example recent gas price increases suddenly >made 10-15 year old Geo Metros worth alot more due >to their miserly fuel use. How can a 15 year old car >that gets 30-40 miles to the gallon be worse than a >3 year old car that gets 24 miles to the gallon?

    It is a lot more complicated than mpg. There is also the number of pollutants per mile. Take a modern hummer getting 10 mpg and a clunker from 1970 also getting 10 mpg. With the a modern emmission system, the hummer is going to put out a fraction (1/1000) of the nitrous oxides, cabron monoxide and the like. A modern example of this would be motorcycles (they have changed the standards recently so it might not be as true any more). You get great mpg compared to a car but you are emitting more pollutants per mile so it is a net loss to the environment but a plus to your pocketbook.

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  18. Witty Nickname says:

    Texas tried something like this earlier in the year where they would give a limited amount of $3,000 cash vouchers good to the purchase of a new vehicle for any car model pre-1996. Really made me mad, I had just sold me 1995 Nissan Altima for $1,700 three months before the program started.

    The difference was this was just like a trade in, except you were guaranteed $3,000 to the state, and the car could not be resold, and it HAD to be used to purchase a new vehicle. It was also a limited time deal. They never announced how many vouchers there were, they just said there was a set number, and when they were gone, that was it. They ran out a few months ago.

    I still think it was a waste of my tax dollars.

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  19. James A says:

    Government + New Program = BAD IDEA

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  20. Chance says:

    No, the biggest problem with this policy is that used cars in decent condition are inherently more “green” than newer cars. Why? Because although they may emit more pollution per car, the pollution involved in their production and transport is already paid for and done. Let’s say I own a 15 year old mitsubishi mirage. It is in decent shape, and has a few more years ahead of it. I keep it tuned up and maintained.

    Now, if I want a Prius, its likely new metals have to be mined, new oil pumped for the plastics, more oil or coal burned for the electricity needed in the factories for the various part, and oil burned on the ship or train or semi to get it to the lot.

    Now, no one is suggesting you not get the most efficient car you can when it it time to get a new car, but if “green” is a primary motivation for you, you should take into account factors like those above.

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  21. Alexandre says:

    I can’t believe extra government intervention advocacy is still in vogue in 2008, especially for a Princeton economist. There shouldn’t be any more debate that markets are light years more efficient at correctly pricing assets (such as old cars) than government. Levitt’s comment here clearly demonstrates such government intervention would skew the incentives at play and causes opposite effects to what we are looking for. And this doesn’t even take into account the army of low-productivity bureaucrats it would take to implement such program.

    “the best government is the one that governs least” – Thoreau

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  22. Lisa says:

    In California the programs are run by county Air Pollution Control districts, so their only purpose is to get heavy polluting cars off the road. They don’t accept any “clunker”. The cars have to be pre-1986 when emission standards were tightened; these cars generate about 20x the pollution of currently produced cars.

    The programs don’t pay “above market prices”. They pay a fixed amount ($650-$800 depending on county) for a car that is required to be drivable, contain all major parts, and have been registered to the owner for at least 24 months.

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  23. Keith M says:

    Why would you want anyone to buy a new car? There are plenty of used cars that nobody is doing anything with. I remember learning that the average term of ownership is 2-3 years before people get sick of their new car, pitch it, and buy another new one. There should be a 5000% tax on new cars, unless they run on electricity. But we all know why Big Capital in America has no interest in electric cars (that’s why the plans and patent for superefficient, lightweight batteries were bought out by Texaco and locked away in a safe, forever).

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  24. Blah says:

    Patents are public knowledge. There are no super efficient batteries (ones that outperform laptops) out there. The Texaco patents is very narrow and is not the reason for the electrical car failure despite what some paranoid people believe. It is right there with the 100mpg carberaotr that gm bought the rights too and so on…

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  25. William McCloskey says:

    I’m really offended by a gang of snooty, flabby, well-paid economists ripping on “clunkers” and “crappy old cars.” All I can afford is a 1991 Chevy S-10 (a small 4-cylinder pickup truck) with which I scratch out a living after being ruined by medical bills. Not everybody can just buy a Prius because it’s fashionable or “correct.”

    Don’t you guys ever get out among real people?

    William McCloskey

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  26. Taed says:

    Lisa above is spot-on regarding the California program.

    I sold my ’72 Chevy Caprice (that was my favorite car ever) to the program in 1996 or so. I got $500 for it. I was inspired to sell it because it needed some work done that was not worth fixing any more. I could have sold it via the classifieds, and probably could have gotten $500 for it, but it was an easy way to sell the car.

    Apparently, they first drill a hole in the engine block to make sure that it won’t be driven again. However, the odd part is that it then goes to the car junkyard (Pick N’ Pull, in my case), so it enables other old cars to remain on the road. That is the part that doesn’t make sense to me. If they really wanted to get old cars completely off the road, they wouldn’t allow the now-disabled car to be used for parts that will then go into another polluting vehicle.

    I replaced that car with a ’86 Ford Thunderbird, which died about a year ago. Unfortunately, it was dead, and I couldn’t sell it to the program. I replaced it with a ’99 Ford Taurus (which I really like).

    My ’72 got about 6 MPG, my ’86 got 13 MPG, and my newest ’99 gets 20 MPG. Fuel economy isn’t a big issue for me; I only do about 6000 miles per year.

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  27. Todd Dawson says:

    It is interesting how a good number of posters are looking at the issues from a “How to build a government program” to address an issues stance, while others ask the “Why get the governmnet involved” question. I beleive this to be demonstrative of the political divide in the US today.

    I am of the view that less gov’t = better gov’t and more personal freedom. That said, there is nothing to prevent those that want to get clunker’s off the road from forming a venture to buy the offending vehicles from current owners.

    Brian at #7 could replace his government buyers with Sierra Club buyers. The clunker owner gets the direct benefit of the sale, the organization investing in the clunker can then ensure recycleable parts are routed for re-use and hazardous parts are disposed of properly. No silly regulations to fight over, no government bureacracy would be created, no opportunities for political patronage, no gaming a system, no oppressive rules to follow.

    The downside: pure direct action would by-pass the political grand-standing and the rallying for the cause. If the actual goals include the growth of government itself or forcing your will upon your fellow citizens at their expense, then this would be very unappealing.

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  28. sc says:

    That was the funniest article I’ve read in a long time. An economic version of “how many angels can dance on the head of a pin”. What’s even funnier is all the straight-faced commentary. Keep up the good work. The world can always use a good laugh.

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  29. Adam Knapp says:

    If folks are doing things that we want less of, it makes a lot more sense to punish them for those behaviors (through extra taxes for instance) than to reward them.

    Dumping on the ideas of someone else doesn’t make yours good. Such an idea would inevitably lead to scores of unregistered clunkers.
    A better idea would be to influence parts manufacturers to make new replacement parts for the more fuel efficient cars made in the 80’s and 90’s – i.e. fix up your Geo Metro. This would increase the number of working, efficient cars without large expenditures on the part of individuals.
    This should be combined with better efficiency standards on new cars.

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  30. Evan says:

    Agree with Helen – used cars have already been accounted for environmentally, while new cars require a new usage of energy and materials to produce. While these old “clunkers” may pollute, if we incentivize some of the clunker owning people to buy new cars, rather than used, it may not help the environment all that much.

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  31. Lon Peters says:

    Levitt is right to worry about creating the wrong incentives, but the program could be designed to minimize or even avoid such problems. For example, instead of buying “old” cars, the gov’t could buy “inefficient” cars. That way there would be no new incentive to hold onto a 12-year-old car until it reaches the ripe age of 15. This would also address the problem of distributional effects (windfalls to owners of old cars, if they just wait long enough). The point is to accelerate the turnover of the national fleet, and to ensure that vehicle choices diminish our reliance on imported oil. Some markets work perfectly well without intervention, but vehicle choice and use imposes costs on others (air pollution, gasoline price increases, congestion), and intervention is necessary to correct these problems.

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  32. Stephen T Wishnevsky says:

    I like the comment about getting out in the real world. The price of scrap steel is so high now that any hulk is worth 4-500 dollars. The down side is that a lot of classic restorable cars are getting crushed.

    And Restored cars only drive a few miles a year, so they contribute very little to pollution.

    And it is true that the price of a new car includes a huge carbon penalty. You pay $30,000.00 for the same (or less) amount of aluminum and steel as an old car, plus the new one has a lot of petroleum derived plastics, platinum in the catalytic converter, rare metals in the electronics, all sorts of special chemicals in various systems.

    So this is a waste of pixels. What we need is the Tata Nano or equivalent cars that the poor can afford, that are safer, and don’t pollute. Until then the poor need junkers. We are the ones that keep this economy going. We pay the most taxes and do the most work for the least money.

    And some of us even dare to post on the forums of out betters.

    Mass transit is a dream. We are too far down the decentralized town plan to ever go back to any European utopia.

    You ought to get out of NYC and see what the world looks like. It’s not a whole lot like your theories.

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  33. Joanna says:

    Singapore has a car scrapping policy – they offer above market value for car owners to scrap their cars by a certain car age (values are pro-rated relative to market value, so I think it distorts incentives less than a fixed 15 year cutoff).

    The main reason I think this works and is a good idea for Singapore is because we have an excellent public transportation system and a very small land mass, so the costs of not owning a car for transportation are not high. (The government reinforces this by setting up a fair number of disincentives to car ownership.)

    A car scrapping program might work within dense urban areas in the US, especially if public transportation is solid. It’s unclear it would be as good/fair of an idea otherwise, eg. what about less well off people who can’t afford to keep buying new cars but need to commute, etc. etc. It seems much less good of an idea for suburban/exurban and rural areas where public transportation is generally sketchy and it’s hard for anyone to survive without a car, and the less well off people problem still exists (these areas could instead act as resale markets for scrapped cars from nearby cities if any such program is implemented in a city).

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  34. Thom says:

    How about this: Have the Federal Reserve buy old cars from online ads. This could be done as part of monetary policy; rather than buying Treasury securities, the Fed would inject dollars into the economy by purchasing cars.

    If cars were purchased from online ads around the country, the cars would be in running order (rather than rescued from junk yards as FreakEconomist worries). Then the Fed would scrap the cars and recover the cost of the metal (etc.). All of this would be done privately in order to prevent people from speculating on the program. At the end of each year, the Fed would, of course, provide information about the program in an audit. The Fed’s agents should bargain the price down as low as possible to maximize the number of cars purchased with a given amount of money. A fixed budget should be set at the outset, such as $3 billion per year. (That’s enough to buy 500,000 cars at $6k apiece.)

    The Fed should focus on buying cars with the worst gas mileage, the worst emissions, and the worst safety records. Also, it should ONLY purchase US-made cars in order to aid the US auto industry.

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  35. Vance P. Frickey says:

    I agree with your statements.

    By the way, my own car, the only car I own, is a 1992 Subaru Legacy station wagon. It gets 30 miles per gallon on the highway, and we keep it tuned and maintained properly (we have to, we live in Denver, which has a very strict vehicular air pollution law, and camera-equipped vans that drive around monitoring car emissions and sending tickets to violators). It takes us to work and back every day and has taken us to New Mexico on vacation.

    The government can have my car when they pry the keys from my cold, dead fingers. :-)

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  36. CLavender says:

    Yawn! Levitt’s “analysis” of Binder’s proposal is based on a “general feel?” Levitt’s criticism rests on a “guess?” And, finally, Levitt’s conclusions amount to “general concerns” and suspicions?

    One expects a bit more sophistication and intelligence from The NYT, but I suppose (supposition) my expectations are once again too high.

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  37. Geronimo says:

    If you could invest in something and make a profit if it became more outrageous in the future, I’d take a thousand shares of this program.

    It is a huge fallacy to underestimate how many unreliable cars are sitting around not being driven and not being scrapped. A government buy-back would bring those cars out of semi-retirement like cockroaches after midnight.

    No matter what the government program, one of the most difficult policy problems is the issue of boundaries, and conditions at the boundary. Welfare / not-welfare, enemy combatant or not, covered-by-Medicare vs not covered–every time a new boundary is created, a bunch of perverse incentives are created at the same time. People sometimes call this “the law of unintended consequences.”

    Cars depreciate until they are worth so little that they go to the junkyard for free, to pay the haul-away charges, or they sit in the yard. Now comes this proposal for the government to march all the way to the END of the depreciation cycle, and stick a big money incentive in the opposite place to where the market says it should be. If this ever becomes a reality, the headline writers will have enough “who thought up this stupid idea?” headlines to last until the program is dismantled. Or, until the absurdity loses its outrage value.

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  38. Joe says:

    Evil oil sheiks bought the patent for cars that burn polluted water and procduce clean air and water as exhaust!!!

    Since some governments/companies ignore patent laws don’t you think those 100 mpg carburators and super effecient batteries would be in use somewhere if the technology actually existed?

    The 100 mpg carburator about which much has been written over the years was installed in a 2 cylinder, open cockpit, 1 person car made of lightweight wood and canvas that weighed under a 100 pounds, a one-speed transmission with no reverse gear, hand crank-start, a hand brake and had a fuel tank that would need to be refilled after a few miles.

    Is anyone in the market for one?

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  39. Jerry Mouton says:

    I was recently involved with the California program. My son’s 1990 Honda Civic had been replaced, and Edmunds priced it out at $350. Now the car was in great condition and regularly got over 30 MPG. California’s program paid $1000 for any car that could not pass the smog check required every year but could be driven to the yard. The car easily passed smog check, but it’s a no brainer to make a car fail. As a result I sold it in 2 days for $1200 to someone to use as a commuter. At $350 I would have turned it in to a charity to recycle, but the program let me sell it instead, and so this low emissions vehicle will keep driving somebody for some years.

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  40. Fred Lamp says:

    Why just rant off the top of your head about this? Why not, um, do some reporting? There’s lots of progammes like this out there in the real world. British Columbia had one that offered a year’s worth of transit passes or credit towards a bicycle for cars that failed AirCare, the government emissions standards test. Spain had another such program. Go, collect some data, then do a column.

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  41. Allan Peda says:

    Generally I’m in favor of less government, and not more, yet I also believe that reasonable regulations, when fairly applied, help the economy. In this case perhaps a reasonable policy might exempt the income from the sale of an older car from sales tax if all of this cash were used toward the purchase of a new (hopefully smaller) car. Such a program would be less costly to administer than a policy of buying entire vehicles from people.

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  42. diogenes says:

    Whoever devised this idea must be an economist.Economists are charged with coming up with schemes that justify spending money in a way that will supposedly generate sales in another area. Their real forte is comedy, though this will never reach the level of a real gem, like the “trickle down theory” or the Laffer Curve. Keep us giggling, clowns.

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  43. Dan says:

    As usual in these things, the devil is in the details, but such programs can work very well indeed. The model was a private sector effort by Unocal in Los Angeles that made perfect sense. Unocal only bought a finite and particularly noxious type of vehicle, those built before 1972. These cars accounted for a vastly disproportionate share of air pollution, and in low-humidity Southern Calif (where rust is minimal) tended to stay on the road forever.

    To my knowledge Unocal scrapped the cars, so that parts were unavailable for sustaining other clunkers. I believe it was a brilliantly cost-effective way of improving air quality (not to mention highway safety). You can read about it in a brief article in this very newspaper (google “unocal buying old cars”).

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  44. Lili says:

    How about this…Giving cash to clunker owner would just create a mess. Give incentives to those who purchase energy efficient cars by having the dealer be the “middle-man”. Go to the dealer for an energy efficient vehicle and receive a significant discount if they turn in their clunker. Dealer turns in clunker to government. The percentage the dealer lost by offering the discount to consumers gets reimbursed by government. This plus putting a cap on how much a dealer can charge for energy efficient cars will help avoid the dealer from raising prices. Consumers can only receive discount if they do both; purchase energy efficient car and turn in their clunker. There’s more to it than that but it’s a thought. P.S. clunker should be any car that drives, for example, less than 25mpg, regardless of appearance or age. Consumers would have to get a car inspection and a paper that states their mpg to turn in for discount with their vehicle.

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  45. roger noehren says:

    There should be incentives to get rid of cars (of any vintage) and not replace them with another car (new or used). Credit should be given for purchase of a fully equiped bicycle and all the accessories such as lights, rainwear, helmets, safety vests and/or a transit pass and/or membership of a car sharing company.

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  46. Joe Foerster says:

    All of this is moot because we don’t have a government that is interested in taking care of it’s own back yard. We spend billions on Iraq but let bridges collapse out from under us in rush hour traffic. You need to hold your representative’s feet to the fire until he or she gets the fact that you need a job and a car and would like to have clean air and water along the way. I liked the one suggestion of car loans being tax deductible. Maybe we would have fewer funky mortgage foreclosures if people had access to car loans they could dedcuct that didn’t put their homes in jeopardy. Don’t forget YOU are the government and if all of you scream loud enough about high credit card interest rates, non-deductible auto loans, and spending way too much of our money in foreign countries that does NOTHING good for us, changes may actually happen. Don’t stop complaining, just start complaining to the right people.

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  47. Poli Sci, PhD says:

    This is why I don’t care for pure economics butting its way into policy. The theoretical bedrock of this critique is overly orthodox and has been under steady critique by social scientists for years. Policy-makers should listen to economists, sure, but then ask some others who actually deal with policy too. But there is also a normative element here that orthodox economics cannot deal with. Economists’ efforts to quantify environmental value or anything of value to society have always been failures. I am not swayed by the ‘freakonomic’ critique and never have been.

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  48. Steve MacLeod says:

    These are all interesting comments. I would have to agree with the European posters. There seems to be a large disconnect between wanting to do the right thing and the will, political or otherwise, to do it.

    I live in Alberta where the oil sands drive our economy. A great percentage of the output from these sands ends up going down to you folks in the States to satisfy your need for oil. I see on the news that there are politicians seriously considering going into Alaska’s protected wilderness to feed your country’s hunger. Ridiculous.

    I agree with less government is better government, but what other way can you get industry to start to invest in technologies to replace these “clunkers” altogether. Corporations will do just enough to put on an appearance of being environmentally aware. Unless regulations, tax breaks or some sort of government program is put in place to encourage(force) companies to invest in proactive strategies rather than reactive, our countries will continue to try and fix the problems that we have created in the first place.

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  49. pepx says:

    1) might be a good program if it’s well thoght and follow successful examples, otherwise the idea must either scrapped or reformulated.
    2) isn’t curious to hear about such programs, just when the american car industry slumps in such dramatical way.

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  50. Mercurius says:

    Levitt writes, “If folks are doing things that we want less of, it makes a lot more sense to punish them for those behaviors (through extra taxes for instance) than to reward them.”

    So tax poor people who can’t afford new car technology because their clunkers pollute?

    How about tax people who buy extravagant new cars and funnel revenue into replacing older technology, but based on income status. If a wealthy person is driving a 15 year old Buick (like Mr. Buffet used to in my old Omaha neighborhood), we have no need of buying their clunkers.

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  51. let them eat gollum balls says:

    toad has a good point: let low-miles drivers buy these rapidly depreciated hummers.
    hard to believe ppl in the 60’s could stand (at the gas pump) for thetime ittook to fillup a 6mpg vehicle. those old gas pumps were slow. of course that’s prolly why selfserve gas didn’t exist yet…
    it amazes me how few current vehicles are rated

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  52. kevin bingham says:

    I drive a 1982 VW diesel pickup, it gets 45 mpg. The pollution and energy required to make a new car seems to be counterproductive to take this great truck off the road. Besides, they dont make fuel effecient small pickup trucks in this country anymore. The geo metro likewise- gets better mileage than the prius, and they stopped making them. Some of the older cars are just plain better
    vehicles than what they offer now.
    It seems to me that it would be better for the environment to just keep cars running instead of constantly building new ones that are disposed of in 5 years.

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  53. Pat Miller says:

    The California program was for vehicles that could not pass the smog regulations without expensive repairs.

    Here’s my situation, it’s going to cost me $500+ in smog related repairs to fix a car that’s worth about $1000. See the problem here? Is it really worth spending all this cash to drive an old car for one more year? This is where the government really screws the lower class. Governor Shwarzenegger just killed the CAP (Consumer Assistance Program) due to our massive budget deficit. Now I’m stuck with a working car that can’t pass smog……. what the hell am I supposed to do with it now? Get $150 from ecology auto wrecking?

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  54. MarianKay says:

    I am with #25. Why call our car a clunker? Our family car is 15 years old. We have low property taxes on it and no payments. We drive only 2-3K miles per year so why would we get a new one? We have to live with the stupid comments on the old thing, but we just laugh all the way to the bank.

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  55. Jim says:

    I don’t recall seeing any data that suggests older cars are making an inordinate contribution to either polution or gas consumption. Before fixing a problem, we ought to determine whether or not that problem exists.

    My clunker is driven less than 2,000 miles per year (about 1/5th the national average). If it were 4 times less efficient and/or more polluting than a new car (it is neither), then I would be doing the environment a short term disservice by trading it in (lots of resources went into that new car) and a long term disservice by behaving like an average new car buyer who I would be encouraged to emulate.

    A car, unlike a gun, has a fairly short service life. There is no point in removing cars from the pool that are already near the end of their service lives. The remaining use of these cars will not have a significant impact on total consumption or pollution, even though the instantaneous rates of both may be high for any individual vehicle. The cars that we really need to get off the road are the 1-year old Hummers, which have long inefficient futures ahead of them.

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  56. let them eat gollum balls says:

    that car may not be more than 30 yrs old, btw…
    why is your apple’s (img) interior orange-colored? the outside looks like a granny, which is not even one of the “pink fleshed” cvs.

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  57. Andrew Song says:

    Instead of the government buying back car, why doesn’t GM, Ford and Chrysler have a program to buy back their own junkers at a premium when the costumer buys a new auto from them, instead of gouging the consumer with their low ball trade in values? This would increase sales in the auto industry, American corporations would be held accountable for the polluting autos they produced in the past as well as stimulate the economy with consumer domestic spending.

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  58. Scott Baker says:

    I’m a firm believer that if you offer an award for some behavior you wil get more of that behavior. I have a simpler plan than the ones above (though many of these are, frankly, better than anything I’ve heard out of either presidential candidate. I call it the 25-for-25 program:

    Any owner who trades in a car that’s been owned for at least a year for a car that gets 25% better gas mileage gets a $2500 federal rebate.

    That’s it. Yes, you might get a few people trading in newer cars for older ones with better mileage, but so what? It’ll still reduce oil consumption and keep money in this country. This plan will encourage people to drive fuel efficient cars and manufacturers to make fuel efficient cars.

    Here’s another plan. I call it the Greenhouse Gas Reduction Incentive Plan (GGRIP). Here how this works:

    Rachet up the CAFE standards to 50mpg by 2025, BUT give triple credit for every Zero Emission Vehicle (ZEV) an auto manufacturer sells (no fair keeping them on the lot).

    This will encourage electric, fuel cell, flywheel, and even compressed air cars (they work better than you think), Get a GGRIP! Of course, we have to have a renewables based energy infrastructure, or else we’re just shifting the problem. More on that in my upcoming book, “Why I should be President.” Just kidding…I think.

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  59. Kate says:

    A 1989 Honda Civic sits in my driveway. When last it was driven on a trip, it got 40 mpg and it passed emissions in New York. It needs some work, so my husband and I are debating — fix it or sell it?

    It has no airbags so it is not a car I want my kids to drive, regardless of the gas mileage.

    We bought it used in 1992 and it still has only 130,000 miles on it.

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  60. fritz says:

    old clunkers will die of there own accord.

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  61. Capriracer351 says:

    I’ll be darned if I trade in my ’68 Mustang or my ’85 Mercury Capri Drag Race cars!!! I am just about sick of people wanting to regulate everything in my life. First you want my guns, then my cars. Then you want to regulate the temperature of my house. Where does it end? The nanny state is a totalitarian state. Next thing you know, they will want to regulate what I eat…. Oh, wait a minute, THEY DO!!!! ARRRGH!!!!

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  62. Inst says:

    Regarding the perverse incentives, isn’t this a patchable problem? All the government has to do is to institute a gradient of compensation as the age of the car increases, or maybe a reverse gradient to combat perverse incentives.

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  63. Inst says:

    And oh yes, wasn’t Alan Blinder the guy who published editorials and articles stating that the negative externalities of globalization were significant? It was okay when the blue-collar workers were losing their jobs, but when service workers started being threatened by globalization, his articles started coming in. So he’s not actually Chicago School.

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  64. Craig Russell says:


    Allow me to use your comment that fuel economy isn’t a huge issue because you only drive ~6000 miles per year to illustrate a point about how one of the biggest problems with the way we look at fuel economy has to do with the system we use to measure it.

    (This is a notion that I read elsewhere–I don’t recall where–but which has been really eye-opening for me).

    The problem is that our system–measured in miles per gallon–obscures how gigantic differences in fuel economy are at the bottom end of the scale.

    Let’s use as an example Taed’s three cars: the 6 mpg Caprice, the 13 mpg Thunderbird, and the 20 mpg Taurus. Imagine you drive each car 6000 miles per year, and pay $4 per gallon for gas. The fuel costs of each are:

    $4000/year for Caprice
    $1846/year for Thunderbird
    $1200/year for Taurus

    Switching from the 6 mpg Caprice to the 13 mpg Thunderbird–a difference, by the current scale, of only 7 mpg–saves you $2154 per year. But then, add another 7 mpg (the move from the Thunderbird to the Taurus), and you only save $646 per year.

    The lesson is: increases and decreases in the mpg scale are all equal–not even close!

    Let’s say you decided to trade your 20 mpg Thunderbird for a ~50 mpg Prius. At 6000 miles per year and $4 per gallon, you would pay $480 per year for gas–a savings of $720 compared to your Thunderbird. That’s not negligible–but it’s nothing compared to the $2154 you saved by moving from 6 mpg to 13 mpg.

    My point is that the best way to reduce fuel use is not to get everyone into 50+ mpg hybrids; it’s to get everyone AWAY FROM the extremely low end of the scale. For most drivers, the savings above 20 mpg are only moderate; but, when looking at figures below 20 mpg, even very small increases on the mpg scale lead to huge savings.

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  65. Mike says:

    I have a more basic issue. By the time a car is 20 years old, one of two things has likely happened. Either (1) It’s outlived it’s useful life and will be scrapped without any gov’t incentive. or (2) It has collector value, and will shortly be restored to pristine condition.

    In stark contrast to sunny California, old cars tend to be rusted into sponges after 20 years of daily use on NY roads. The few old clunkers you see here are bound to be scrapped without government help.

    Collector cars generate essentially zero pollution. The average collector drives only a few hundred miles on sunny summer days. He spends more time underneath the car turning wrenches than behind the wheel. Crushing old cars cuts off collectors from an irreplaceable source of parts. That’s why even California allows pick ‘n’ pull.

    If you want a government program to stop pollution, the correct answer is to tax SUV’s to death. Even if we accept the statement that they are less polluting per mile, a Hummer on the road outpollutes twenty ’72 Chevy’s in the garage. Go for the gusto…crush a Hummer today.

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  66. Giovanna says:

    There are implications in some of the comments above that an older Geo Metro is stingy on the gas but by definition pollutes. Not necessarily so. My 1983 Metro got a “perfect” California smog rating last spring after I invested significant money on parts and a mechanic to install them. The mechanic was astounded, and I was overjoyed that I didn’t have to deal with replacing one of the favorite cars I’ve ever had for at least another two years. 40 mpg city, can park in 2/3 of a parallel space on the street, and great on road trips.

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  67. Giovanna says:

    BTW, isn’t that an Indian Ambassador in the photo? Didn’t they only come in black and white? Great snap!

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  68. Chris Harris says:

    On a slightly different tangent, I am wondering if a model similar to that used in Singapore will work. They put heavy taxes on new vehicles (upwards of 200% of the vehicle price) in order to subsidize public transportation.

    Of course this requires a very transparent government, and the short-run effects would be calamitous, but the long run effects would tax those that really needed a vehicle and reward those that didn’t. Would delivery prices for goods rise? Will people cheat the system somehow due to loopholes?

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  69. David G. says:

    What else to expect from the woodoo freconomist?

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  70. Oinky says:

    Manufacturing a vehicle is a hugely resource- and energy-intensive process that generates vastly more pollution than even an old car generates in its entire lifespan. Discontinuing the use of an old car and buying a new one because its exhaust is cleaner does not reduce pollution, but rather increases it.

    What leaves the tailpipe of an older car may be dirtier than what leaves the tailpipe of a newer car, but that’s only a small part of the picture. The fact — uncomfortable though it may be to an egalitarian — is that the relatively small number of old/high-polluting cars on the road are “subsidised” by the overwhelmingly large number of new/low-polluting cars on the road. It’s been pretty well demonstrated by EPA’s own extensive studies that there are so few genuinely dirty old cars in any kind of regular use that even if all of them were magically made to disappear tomorrow, the effect on air quality would be unmeasurable.

    The economic stimulus argument is fatally flawed, for reasons adequately covered in this blog post itself.

    It’d be far more helpful (and appropriate) for the Federal Government to allow cars conforming to the internationalized European ECE safety and emissions regulations used by the _entire_ rest of the developed world outside North America. The on-road fleet fuel economy in Europe is double that in North America, with equal or greater safety and comparably clean tailpipe emissions. The different-but-not-better US regulations are effectively a non-tariff trade barrier designed and implemented to protect the domestic automakers (including the well-established American operations of foreign brands). Of course, it’s seldom discussed that way. Rather, baseless claims are made along the lines of American regulations being the most stringent in the world. This is demonstrably untrue, and there is ample high-quality data to show that the American regulations do not do a better job in terms of safety performance or air cleanliness. This is not an appropriate tactic in a country whose controllers love to rhapsodize about the “free” market. More detailed info here.

    Of course, this kind of a rational, common-sense, “right now” solution to the fuel crisis will not be implemented because GM, Ford, and Chrysler failed to learn the lessons of 1973 and 1979 and yet again grew fat, dumb, and happy making grossly oversized gas guzzlers which they’re suddenly having a hard time selling (again), so out of one side of their mouth they babble about the free market and out of the other side they run to the Feds for protection from the cars that exist right now that would best meet Americans’ needs and wants right now. The greatest point of irony is that many of those vehicles are in fact made by Ford and GM…just in other countries.

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  71. Arthur says:

    The buyback program is pointless. Just increase gasoline taxes, so gas prices are permanently not so low as they used to be. This will weed out inefficient cars, not matter if they are new or old. This will also force manufacturers to build more efficient cars. Because, what if someone drives a small 15 year old car that makes 30-35 mpg ? What is the point of taking these off the market ?

    The collected tax money should be used to create new alternative energy infrastructure – hydrogen, electric, solar, wind. The technologies are out there, and are advancing fast. But the starting cost is often high. That is why we need an initial government push.

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  72. Jan Schmitz says:

    This would get the clunkers off the street,
    or driveways and yards, where they are generally parked. Usually these cars aren’t in use. People are not inclined to dispose of them. But, if you give money for cars, this plan would clean up neighborhoods!!! and whole cities. The scrap metal is needed to build new cars. Let’s clean up America and recycle steel!

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  73. stilldreaming says:

    Has anyone done a serious analysis of ecological costs of replacing a clunker with a new car?

    I have a hunch that maintenance and repair of clunkers might be better for the environment (inspite of the fact that newer cars might have fewer harmful emissions).

    I am sure that if a larger percentage of Americans would love their possesions — repair and maintain rather than replace — it would benefit the environment.

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  74. Ellen says:

    This seems an overly complicated replacement for two currently applied mechanisms.
    Raising gas taxes will make more fuel efficient cars more economical than less fuel efficient cars.

    Tightening emission standards. A car is not legal to drive on the road if it does not pass emission standards. Gradually reducing the acceptable amount of pollution will have the effect of pushing off the roads older and poorly maintained cars that create more pollution.

    Of course, this would require politicians to have some courage.

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  75. stilldreaming says:

    jes #15, you write: “the German version goes beyond broken headlights and tire wear to include cosmetic damage on the car body which can “condemn” you vehicle off the road.”

    And how exactly would it be good for the environment to junk a car based on cosmetic damage?

    Let’s not be so quick to accept that government programs to get clunkers off the roads help the environment. Consuming less and refraining from the endless pressure to purchase new items might be more beneficial than rushing to replace.

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  76. Alex says:

    I agree with Chance: looking only at a car’s CO2 emmissions is a small part of the environmental picture.

    In addition to the raw materials, it takes a lot of transportation to manufacture a modern car. The components in your dashboard probably originate from more than five different countries; and many engines, subassemblies, etc. were produced in another continent before being delivered to the assembly plant (this is the case for the Chevrolet Equinox’s Guangzhou-made engine).

    Keeping that 1988 Toyota Camry with 200K miles is much better for the environment than that Toyota Prius you waited three months to get…

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  77. Scott Banks says:

    Todd Dawson’s enthusiasm for voluntary private initiatives might more attractive in cases when effective solutions can be voluntary and private. Unfortunately, it is not voluntary that we confront air quality issues and global warming—it is mandatory if we are to survive. Moreover, we cannot do it on a private, piecemeal basis, but will need to organize our entire society, and indeed our entire planet. A handful of Sierra clubbers cannot stop global warming on their weekends while the rest of us ignore them and promote small government.

    I share Dawson’s love of personal freedom, but I would remind him that to gain personal freedom one must first attain a certain freedom from necessity. Our affluent society has made it easy for some to forget this truism, but global warming stands ready to re-acquaint us with it in a hurry.

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  78. Don Marti says:

    The total profit to the industry from replacing a retired car might be greater than the cash payment to the owner — especially if you count the insurance industry, which has to cover the damage inflicted by the extra “clunkers” on the road. What about creating an antitrust exception that lets insurers, automakers and suppliers collude to pay into a buy and destroy fund?

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  79. Matt O. says:

    Re: #6

    I like the idea in general, but tax deductible interest on car loans wouldn’t help much. Unlike mortgages, auto loan interest is a small percentage of each monthly payment.

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  80. James K. Bachmann says:

    I have a ’93 Olds that runs quite well. I figure it is better to drive it until the cost of repairs is more than the cost of a car that runs. That might be another ’93 Olds for $500! There doesn’t seem to be an emission problem with my current car that I keep well maintained.

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  81. Pquincy says:

    Surely there must be a way to bundle the government incentives for scrapping clunkers! Once could use the expectation of to-be-scrapped clunkers to secure a bond that could be sold to investors. As the supply of clunkers decreased, their price would go up, ensuring the sale of more and more valuable bonds with higher and higher interest rates.

    It can’t fail…the rules have changed…these investments are safer than cash!

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  82. Tom100 says:

    Some more inconvenient truths:

    Old but servicable “clunkers” keep a lot of mechanics, auto parts stores and owners employed.

    Older or untuned lawn mowers, gas power equipment and boats are far more polluting than old cars, and theres lots of them.

    In addition to the points raised in this blog about the net environmental costs, frivolous use of any auto would negate any savings from a more efficient auto. Carbon/gas tax is the way to go.

    And Blinder wanted to be Fed chairman?? Not if he’s coming up with silly half baked “solutions” like this! Then again, what do you expect from a liberal…

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  83. George Scott says:

    These older cars are often perfect for converting to Propane or some other alternative fuel. That is what should be done with older cars.

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  84. Bill McNeely says:

    You might want to look to Dubai for how a variation of “Cash for Clunkers” could work. In Dubai car insurance is provided by the government for three years. At the end of those three years, if you still own the car, you are required to purchase private insurance. For most individuals this private insurance is more than they can afford and a new car is purchased or leased. These three year old cars are then sold to wholesalers who often take them to Africa for resale. The end result of this policy is that old cars are kept off the road and pollution is kept to a minimum.

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  85. hazbins says:

    I am with those posters who say – let the automobile companies be responsible for it – but as the middle man. Let the government provide incentives for gm, ford, and chrysler to buy back used cars at a premium. Let the govt pay the automobile companies for cars that are destroyed and turned to scrap.

    We do this with refrigerators, don’t we? Govt incentive to get energy star appliances, companies pick up old frigs.

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  86. Pat Garity says:

    1. Just because an old car passes a state smog test doesn’t mean that it doesn’t pollute. Standards for older were and still are “looser”.
    2. The money for buy back programs usually comes from industries that pollute. (so called stationary sources) They need “pollution credits”.
    3. The California program sold pollution credits from scrapped “gross polluters” to stationary sources.
    4. As a result the stationary sources could continue to pollute.
    5. Vehicles that were “buy backs” in California were required to be crushed.
    6. Newer cars (1994-96 and later On Board Diagnostics equipped) are MUCH cleaner than their predecessors.
    7. Just because your old “whatever” still gets great mileage doesn’t mean it doesn’t emit a lot of pollutants.

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  87. Dwight says:

    The price of steel is incentive enough.

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  88. lee schipper says:

    Jim’s point #55 has a clear answer. the oldest cars emit the most, at least if they are not caught. There are thousands of emissions studies supporting this. And DOE and DOT have many surveys over the years showing how little 15+ year old cars are driven relative to new cars. But the worst emit 100 times more NOx, CO and other pollutants per miles than present standards, so they do pollute out of proportion to their numbers or use. In fact a small share of all cars (some new ones too) account for 80% of the pollution, leading some to question whether it would be far more efficient to have roadside remote sensing units, very effective at finding the reals smokers. Be that as it may, many of you note correctly that most smokers are caught.

    In many ways then clunkers are a thing of the past. A very tiny share of cars on teh road today are older than 1982, the year when gasoline prices (then) peaked and the cost of 1 mile of gasoline was just past its peak (and higher than today). Emission standards were pretty tight, and many states have inspection programs that catch the worst ones. So I buy Steve’s arguments and second his worries that all kinds of secondary markets will arise that may undermine these. (One problem with clunkers in the US is they are driven to Mexico as “chocoladas”, as many as 5 million or more are running around there or farther south.)
    I also second all of those who praise higher taxes (a small group). See my recent discussion of this and US/European trends in fuel economy at

    One note — in 35 years of this work I have never seen subsidies in Europe for small cars. Note the data in that presentation show weight or power is the main difference between Europe (29 mpg fleet averagE) and the US (20.6 mpg fleet average) fuel economy. Only Denmark, whose base tax on new cars is about 180% on top of their value, gives a small break for the smallest cars. Danes have fewer cars relative to their incomes than other Europeans but they drive them more (per car, per year) so they get about the same miles per person as Swedes. Shows the importance of relaxing on the taxes on fixed costs (ownership) and hiking the t axes on use (fuel, emissions, kilometers worth of road wear on the roads.)

    All cars face stiff value added taxes and other taxes. The nordic countries ratchet up their small but visible carbon taxes every year.

    What would help get rid of the clunkers is a bounty, like a container deposit, on every car sold. The rights to the deposit transfer with ownership, and the final owner gets the $$ back for disposing of the car properly — at a car recycling place.

    Lee Schipper
    Visiting Scholar
    UC Berkeley

    Associate Emeritus
    EMBARQ, the WRI center for Sustainable Transport

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  89. John Fasoldt says:

    WHAT? You want to take my old car away from me? You’re going to have to pry it from my cold, dead fingers. My 1980 Toyota Corolla has 78,000 miles on it, drum brakes, carburetor, a simple mechanical choke, no computer chips and gets almost 30 miles to the gallon. Tear it apart with two pairs of pliers and a screwdriver…. Park it anywhere without worry. YOU CAN EVEN LEAVE THE KEYS IN IT! This is truly the World’s Greatest Car, take a look.

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  90. Vlad Tepis says:

    An old and futile concept, as evidenced by many of the comments appearing here.

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  91. Adam says:

    Wow. What a bunch of mental masturbation! You are postulating a complicated model with all sorts of different variables, and yet stating that you know exactly how they will all interact.

    You social scientists are real confident people. I’m just glad you all don’t build the nation’s bridges.

    Instead of philosophizing about why this may not work, let’s examine similar programs already in place and see how they do. Gun buybacks don’t work, fine. But commenter #2 already said a similar program worked in Spain and another commenter said a similar program was conducted in Texas. How did they perform?

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  92. the phunky physicist says:

    There has never been such a think as the 100 MPg carbuerator, because little energy is lost in a carbuerator, whose only function (before fuel injection) was to mix air and gasoline. There was nothing missing that kept the gasoline from delivering more power.

    From my first job at Energy Specialist for UC Berkeley’s Energy And Resources Program in the 1970s I have been the one the scammers (and victims) all contact about repeated violations — of the Laws of Thermodynamics.

    Build a light weight car and you can get high fuel economy — but why ruin it with a carbuerator when fuel injection is much better?

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  93. Dendroica says:

    12 year old cars are still less polluting than 20 years old vehicles, and removing those would not have as great an impact on pollution. As for fuel efficiency, most 12-25 year old vehicles are just as efficient as modern cars, due to reduced mass but they are less safe. Since we must assume that most of these vehicles are still being driven for economic, rather than simple choice reasons, many will not be removed from the vehicle pool simply by providing small rebates. There are ways to address all of your problems, such as having the vehicles require at least a two continuous year registration by the current owner (to prevent beaters being turned in by used car dealers) and requiring a national emissions test might be a better idea. Pass the test, the government pays for the test plus gives you a $100 gas voucher. Fail the test and the vehicle must be repaired within 30 days, or you can’t register it in any state again until it is repaired.

    In the past you’ve been much better on concepts; this wasn’t your best work. Sometimes economists miss the little details that people who actually know about the subject might have at their disposal.

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  94. Adam says:

    For all you kiddies out in TV land.

    Commenter #89 works for a foundation created by a grant from Shell, the oil company.

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  95. Vernon Huffer says:

    Why would anyone except a car dealer or manufacturer like this idea? It is the manufacturing that causes much of the pollution. Consumers should be encouraged to keep their older cars running.

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  96. Sabu says:

    If economics is, at its roots, the study of incentives, isn’t there quite a difference between how gunowners perceive their guns and how carowners perceive their old clunkers? People who choose not to participate in gun buyback programs, or who try to cheat the system by selling back unwanted guns and keeping others probably have a deeply engrained belief about the right to bear arms that is fundamentally opposed to the purpose of the buyback program in the first place. So, their incentives when examined subjectively, and with an eye to something more than just numbers, can’t be easily compared with those of the clunkers owners. While I’m sure people will find innovative new ways to cheat the government clunker buyback program, I have a feeling that clunkers just don’t have the same kind of charge (or discharge?) that guns do in American political discourse.

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  97. Steve Metz says:

    The big problem with the idea is most of the clunkers out there do not pollute much more than a modern car. These cars that are 15 years old all have O2 sensors and realy will not run at all if there is a problem with emissions.

    High gas tax that the proceeds go to alternate energy reasearch and tax credit for hybrid vehicles and cars that get over 40 mpg would be a more valuable use of reasources.

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  98. jad says:

    And why do we need these cars off the road? I drive (drove) a 26-year-old car until last spring when at nearly 300K miles, it retired itself, without government interference. It got 25 mpg and in two decades never failed a California smog test. I’m driving a nearly identical car now in another state. Exactly what is so dangerous or evil about this behavior that it needs government correction?

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  99. Leon A Davis says:

    The energy required to produce a new vehicle for me to buy is several times the energy I will use to run my 1982 Toyota 4X4 pickup for the next twenty years. I drive less than 10K per year anyway. All these vehicle buyback programs are for is to increase sales for auto companies. End of story. My classic Toy is stone cold reliable and in perfect condition, while my friend’s fancy new $40,000 GMC rig has been in the shop a half-dozen times in the three months since he purchased it. Plus, while GM is losing billions and billions, the dealer is giving my buddy the runaround. Go figure.

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  100. Barbara Schaffer says:

    California does have such a program for old cars. In California, cars past a certain age do not have to meet the same emission standards as newer cars. In 2004, I replaced my 1973 Volvo with a 1985 model. I would have sold the older car, which was still running, if the state had not offered me $500 for it. (Perhaps it was because of this program that I was forced to give up my old car, since it was becoming very hard to find junkyard parts for it.)

    When I turned it in at an authorized junk yard, I had to be able to drive it in and show that it was in all ways operational – they checked that all the signal lights worked.

    I think it’s a good program because it keeps polluting vehicles off the used car market.

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  101. tinajuarez says:

    My 1963 ford falcon got 28 MPG, the old 216 gets 23 MPG in a truck& those wonderful Honda 600s that got 40-55 MPG.. We re-build late 60’s cars into highway drivable EVs. Newer cars are not good candidates because the extra steel reinforcing the airbags adds too much weight to make a useful EV.. Better to crush NEW cars, with recyclable plastics and poor mileage. Destroy the evidence of mindless greed and gov’t/corporate complicity of the last two decades.

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  102. Jeffrey W. Dawson says:

    When they had a no-questions-asked gun buyback program in Orlando, Florida, there were actually some very valuable, rare collectible guns turned in, unfortunately to be destroyed (e.g., priceless Colts). Oddest of all was a surface-to-air missile, though. Destroying old cars would also drive up the price of used car parts, which would hurt those who fix their own cars, not to mention restorers.

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  103. Amanda from Montreal says:

    An alternative: follow Montreal’s lead and salt the living daylights out of the roads in winter. Old clunkers are literally eaten alive after a few years on the roads.
    Bonus: it also kills weeds…

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  104. martin dijkema says:

    As an engineer and an economist, it always amuses me that economists sit in their offices and try and predict human behavior. Does Mr. Binder really not understand the Law of Unintended Consequences?

    Mr. Levitt comes up with some excellent points – one is that it might actually increase the number of clunkers on the road by people keeping their 12 year old cars for another 3 years so they can collect the bounty. Another problem would be bringing already ‘dead’ cars in fields back to life simply to collect the bounty.

    I suspect that academics such as Mr. Binder are so isolated from the outside world that they really have no clue and as such really do not grasp their own discipline very well, or at all. In Amsterdam, in the 1970s, the city government came up with a scheme to have ‘free’ bicycles on every street corner (cooked up by some economist), so people could use this and leave them at designated points for someone else to use. Needless to say, a five year old could have predicted the outcome – virtually all bicycles were gone from Holland within 48 hours – thousands – only to re-appear in Turkey.

    Government that Governs Least, Governs Best.

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  105. Ralph says:

    Twenty-five years ago my Ford F250 with a 351 cid engine was labelled a “gross polluter” by the State of California. At that time, the San Diego County Air Pollution Control District sponsored some 1500 free installations of a triple-action catalytic converter manufactured by a local tech company. The truck has, ever since, passed all smog tests with emissions levels lower than a Toyota Corolla. Carbon monoxide emissions are literally zero, even today. I still have the truck, but I only use it to go to Home Depot or the dump. Though I still need a truck sometimes, it would never pay to replace it. Whatever happened to technology like this cat converter?

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  106. Pete says:

    This scheme won’t work. Most people driving cars of that age do so for financial reasons. “bangernomics” as it is called is a real science. Some people manage to keep themselves on the road without ever paying more than scrap price for a car, thus paying essentially paying nothing for the cost of purchasing a car.

    As the rising price of scrap shows, it raises the minimum price a car sells for. This pushes up the price of all second hand cars. Many many people simply cannot afford a new car of ANY kind, no matter how many tax breaks and incentives and reward programs they are offered.

    Raising the minimum value of a second hand car in this way has a detrimental effect on everyone who relies on the second hand market.

    Old cars do have much much higher emissions than new ones. However, cars with fuel injection and a catalyst are at least in the same order of magnitude as a new car. Cars like that are rapidly reaching “clunker” age. A friend recently scrapped a perfectly good 10yrold car with a cat and fuel injection, because he couldn’t be bothered to change the head gasket, and its market value was the same as its scrap value, so it was easier to replace with a similar car.

    No, it has to start with the new cars. It only takes 5 years for a rule applied to new cars to cover half of the cars on the road.

    CAFE standards. Proper ones. Now. Get rid of the tax breaks given to SUV buyers. Those are simple things that should have been done ages ago.

    Raising fuel tax will have a part to play in the US, but the sharp rise in fuel prices due to the fall of the dollar has really put a squeeze on buyers. I feel the price of fuel should be held at 4 dollars a gallon for the next few years, with the tax rate altered to keep it adjusted. If appropriate economic policies lead to a rise in the value of the dollar, this will be feasible.

    Also, roadside emissions tests will be helpful in dealing with people who really don’t care how much they pollute, and cheat their way past the regular emissions test. Just pull people over, quickly measure the idle emissions, and ticket any failures.

    The key thing is a whopping great tax on new cars, weighted around the current fuel economy and emissions averages. Anything better than average, gets a tax break.. funded by the exponentially larger tax hike on worse than average cars. Then move the tax brackets as the current averages change.

    Make it clear that there is a collective responsibility to reduce oil use and emissions, and thus those who burn too much oil will financially subsidise those who make a sacrifice. “If you wont save fuel yourself, you will have to pay someone else to do it for you”

    This policy would bring very small efficient new cars down into the price range at which second hand car buyers would consider them seriously. It also creates a massive demand for that kind of car, and so they will be made available.

    Remember that car designs are a commodity item. GM has plenty of good small cars to sell. They are made and sold as Vauxhalls in the UK, and Opels on the continent. No development needed, just ship over the tooling. GM really does have a 60mpg 5 seater car it could sell in the US. It just won’t. Manufacturers buy and re-badge each others products all the time. In a pinch, american companies can buy a foreign design, change the badge, slap an uglier grille on the front, and start making them in under a year.

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  107. Quinn says:

    OK, NY Times, do us all a favor. Get a your crack team of reporters to hunt down resources for us poor slobs to convert our cars to clean-running compressed natural gas (CNG). I live in a state that has a lot of it, and I could buy a Honda and a small appliance that pumps up my house supply to car pressures (3000 psig). But, it appears on the Internet that not only are there almost no shops that will do this job, it is technically illegal to modify your car’s fuel system due the the pressures required. CNG is methane…one carbon, four hydrogen. Since most cars are already fuel injected these days, how about our esteemed National Laboratories promote development of CNG retrofit systems? CNG is a domestic fuel. Granted, it’s not universally available, but for many places, it could be a way to remanufacture a decent used car and get something on the road for a fraction of a new car. Come on Americans, we’re smart people. Lets come up with more creative ideas like this.

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  108. Eric S says:

    When I am done with my old car, the government will have to buy it! After all, who else would want an old car that barely runs and puts smoke into the stratosphere!
    Who is to judge what cars are clunkers? If I don’t like the old beater my neighbor is driving, can I have it declared a clunker and have the government pick it up and crush it?
    The Walter Mitty in me is just loving the possibilities. Don’t menace me with your SUV! I have the government to protect me and to make a better world more to my liking. Clunker owners beware!

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  109. charlie says:

    Why does this column show a picture of a car that hasn’t been within a thousand miles of the United States? Guess the Euro’s have a few clunkers too.

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  110. Jack says:

    If the govt pays above market prices, won’t that just inflate the market?

    If not, I should be able to, in a matter of a few days or weeks, sell my barely mobile clunker for a better clunker, sell that for a something a little better, and so on until I have a car nice enough for the government to no longer take interest.

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  111. jag says:

    There are plenty of buyers for stylish clunkers. I met these buyers today at Electric Auto Association. They would love to take a clunker and convert it into electric cars for less than $7000. So why not sell it to the environmentalist, green futurist, alternative energy users, and drive again for 40 cents a gallon charge (20miles= 40cents electric charge). Now thats a solution by HouseDNA

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  112. Blake says:

    In Dallas we pay a penalty for the bad air quality on our inspection fees. Last winter the penalties were accrued into a fund to provide $3000 vouchers for people earning under 30k per year who traded in their 95 or older cars for ones a max of 3 years old. The program worked beautifully and I was able to get my old volvo off the road in favor of a more environmentally friendly car!
    Whe should look to further fund this type of program as it benefits poorer americans who drive older cars.

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  113. Dan Wylie-Sears says:

    A car should be junked as soon as its net present value as a car is lower than its net present value as junk. If the markets don’t recognize some of the costs and benefits on either side of that comparison, then there’s some basis for a program that compensates for that.

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  114. John Coker says:

    To me, the ultimate in recycling is driving a vehicle till it won’t be coaxed another inch. I have a 1996 minivan (presently in the shop for repair). It’s getting very close to wore out, but still gets over 26 miles a gallon, when driven sensibly. The Scotsman in me wants to extract at least one more year out of the vehicle. Economist call vehicle owners like myself as an”end-user”.

    I also own a 1939 Chevrolet half-ton pickup. It is no show toy, it is stll a working truck. 15 miles a gallon, straightforward to repair, surprising parts availability, and still good for a days’ work hauling firewood or water. FDR would have been proud. These old vehicles require more repair, and that ensures that auto mechanics have jobs. Finally, while I am disturbed by the decline of our nation’s automakers, cutting the consumption of automobiles is a positive thing until Detroit develops a new line of durable vehicles that are either hybrids or burn alternative fuels.

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  115. NOSOFAST says:

    Who was that who said we ought to tax cars at a higher rate as they got older rather than the other way around thusly encouraging people to drive the newer more efficient vehicles.

    * As for taxes ineffiencet cars at a higher rate that is already being done! It’s called higher fuel costs! huh

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  116. Aaron says:

    I was not convinced by your arguments, Steven. Some counterarguments:

    1) If you define “clunkers” as vehicles made before some fixed date X, then there is no perverse incentive to hold on to cars longer to qualify for the incentive.

    2) The average used car on the market isn’t as bad as “clunkers” that existed long ago, perhaps as far back as the pre-catalytic converter days. So, increased demand for these used cars isn’t an awful thing, but an improvement. Also, the increased demand means increased price, which CORRECTS the perverse incentives by internalizing the externality of owning an older, polluting car.

    I’m sure the policy is no panacea, but I don’t think you adequately demonstrated that it would fail to make progress toward its policy goals

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  117. Endstar says:

    I have first-hand experience with one version of the California buyback program. Every couple years, older cars are forced to get a smog check at a “check only” site, that is not allowed to repair your car. If your car fails, it is eligible for a buyback program. This happened with our 1991 Honda Civic. The brakes also needed work, and we were short on cash, so we decided to cash it in for around $1000 and make do with one car.

    Unfortunately, this program back-fired a bit for the state. It turned out we needed a second car anyway. We ended up buying (and fixing up) a 1974 BMW, because it was old enough to be exempted from the smog check. Now, our second car gets worse mileage than the Civic, and pollutes a whole lot more. (But, the BMW is way, way cooler than the Civic!)

    In any case, the concern that people will get junkers just to cash them in with the state can be eliminated by limiting the frequency with which cars can be turned in. In California, you can only cash in a car every two years.

    The program seems to have a good track record of removing the most polluting cars from the road, my example notwithstanding.

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  118. stv says:

    Re: scrap steel: several container ships full of scrap steel leave California ports each day. People in other countries are willing to pay more for it.

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  119. Werner says:

    This is another example of “green” obsolescence … a modern remake of 1950s-style planned obsolescence. The implication is that you must buy a Dorkmobile model 2.0 because it has fifteen airbags and goes another ten kilometres on a tank of gas further than your old Dorkmobile model 1.0. This plan would reward narcissism and social climbing. We should be encouraging people to hang onto old cars and other consumer items through good engineering and use of superior materials. What is wrong with finding ways to upgrade older vehicles, eg. using diesel engines?. Modern vehicles are also more difficult to repair which makes DIY work harder.

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  120. Adam M says:

    This idea is not very green because by encouraging newer card to be purchased, we are in effect encouraging the use of raw materials to make those cars. If we evaluate the total carbon footprint of a new car versus the emissions and the previously paid carbon cost of the clunker, I’m afraid it would take a lot worse emissions than most cars produce (especially in regulated areas like California or the Northeast) to justify the total footprint of a new car.

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  121. James says:

    This is a dumb idea, and a waste of money.
    Yes, there are millions of old clunkers sitting in garages, driveways and back yards of homes around the country. But, few are driven regularly, many run poorly or not at all.
    People keep them because-
    1) They are too lazy to sell them or don’t think they will get enough to be worth the trouble.
    2) The cars have sentimental value, or the owners are hoping they will start increasing in value as “classics” if they keep them long enough.
    3) They are being kept as “project cars” or something for their sons to drive when they get older (As though any kid really wants to drive Dad’s 1978 Mercury Monarch)
    Bottom line is, most of these cars are not being driven, so they can’t pollute. Those that are will wear out of their own accord and will eventually be retired. The goverment squanders enough money, they don’t need waste it buying up old cars. The market will take care of them on it’s own.

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  122. Carl Long says:

    Why is it that everyone’s favorite idea (which most of the time of course only concerns other folks) is to either put new taxes in place or raise certain taxes to make ‘people’ do what other people (politicians or scientists paid by politicians) want them to do.
    Because: essentially there is no problem. Old cars go away by themselves and the fairy tale that the 5% or so of old cars produce 80% of pollution is, well, constantly put out by certain industries ….

    Cars in Europe are smaller (= more efficient) mostly because otherwise you gonna have trouble finding a parking space. They’re also cheaper, right.

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  123. 2nd Opinion says:

    I drive a clunker. Since average fuel economy peaked in 1987, my clunker is more efficient than a typical new car. On top of that, the manufacturing process uses massive amounts of energy to produce each new car. Rather than being encouraged to buy one of the new wasteful cars, shouldn’t I be rewarded for keeping my old one on the road? When do I get my cheque?

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  124. sean says:

    May this apply to only pre- CAT vehicles except collector’s cars? what about the 8 year old HD trucks? State safty or emmision inspections can and do motivate owners to maintaine their units.—ending-juvenile-life-without-parole

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  125. Ken says:

    Andrew (response #57) might have the start of a good idea. Let the automakers buy back old clunkers of any brand and then give them credit towards their fleet MPG targets. Obviously the automaker would only buy a car if you buy a new car, but right now the Big 3 are hurting enough they might go for it.

    On the other side of the coin, the increased cost of gas is forcing the auto market to change. Ford & Gm have both put a hold on investing in new designs for their trucks. There will be plants shifting from large cars & trucks to smaller ones.

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  126. Lee Schroeder says:

    Why wouldn’t someone simply drop a new fuel-efficient and low-pollution engine in an older car?

    Simple, the cost of doing it is greater than the value of the car.

    This is the same reason that many basic maintenance items get neglected as a car ages. You could easily end up with $20,000 in a car that you could only insure or sell for $1,000.

    The environmental advantages of maintaining and upgrading an older vehicles are significant if you consider the energy consumed and pollution created in manufacturing a new vehicle.

    So, why is that older vehicle only worth $1,000?

    Our tax code sets the depreciation schedule for vehicles used by businesses. In turn, this schedule sets the base depreciation rate for all vehicles.

    Sure, the actual depreciation rate that we observe for a specific vehicle will be subject to the market demand for that specific model, but average depreciation rates will track our tax code very closely.

    There is also a Catch-22 situation with older vehicle values: the vehicle isn’t worth much because it hasn’t been maintained -and- the vehicle hasn’t been maintained because it isn’t worth much

    The decision about repairing or upgrading an older vehicle is usually made based on the cost of service vs. value of vehicle.

    The energy consumption and pollution ratings of a new vehicle always exclude the energy and pollution of manufacturing it.

    With all costs considered, it is probably more efficient and less polluting to repair and upgrade older vehicles. Unfortunately, we will probably keep existing financial penalties in place to prevent it.

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  127. Brian says:

    Couldn’t you deal with the issue of age of the cars by establishing a minimum, or rather a maximum, MPG that cars have to have? In other words, if the guidelines say that the cars can’t get more than 25 MPG, wouldn’t that render the age of the car unimportant and thus prevent people from holding onto the cars for a few extra years? It’s not like the MPG is going to magically increase, after all.

    And why would there be a constituency for the program over the long run? If the MPG guideline is instituted, over time, wouldn’t the cars under this guideline eventually fall so that nobody would qualify?

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  128. Steven Thacker says:

    This seems like a terrible use of taxpayers’ money. Unfortunately I have seen enough comments on that. Plus, isn’t taxing gasoline an efficient form of dealing with the externality of pollution?

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  129. Linda says:

    Someone wrote: “How can a 15 year old car that gets 30-40 miles to the gallon be worse than a 3 year old car that gets 24 miles to the gallon?”

    The answer is, that 15-year-old car wasn’t built to meet modern emissions standards. Fifteen years ago, the terms “ULEV” and “SULEV” weren’t common — heck, even 10 years ago, it was a joy to see a car finally labeled “LEV”. A 15-y-o car is pumping out many, many more smog-forming emissions than a car built in the last five years.

    No, this has nothing to do with 30-40 miles a gallon versus 24 miles to the gallon. Those emissions are greenhouse gas emissions. Smog-forming emissions are totally different and aren’t tied to the fuel economy of a car the way greenhouse gas emissions are.

    Also loved the way the columnist can’t be bothered to get his team of fact-checkers to look up any stats for him: “The biggest problem with this policy, however, is the way it distorts long run incentives. Let’s say the rules of the program say that a car must be at least fifteen years old to qualify for a big government subsidy to scrap it. This gives powerful incentives to people with twelve-year-old cars they were planning on scrapping to keep driving them for three more years to collect the government bounty. Instead of reducing the number of clunkers on the road, this program could actually lead to an increase!”

    “Could” actually lead to an increase. This would be an easy one to check via current vehicle registrations for cars of each age, but why bother? It’s much easier to just hypothesize, and use an exclamation mark to make people believe!

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  130. _Jim says:

    Linda slyly pens:

    “The answer is, that 15-year-old car wasn’t built to meet modern emissions standards. Fifteen years ago, the terms “ULEV” and “SULEV” weren’t common — heck, even 10 years ago, it was a joy to see a car finally labeled “LEV”. A 15-y-o car is pumping out many, many more smog-forming emissions than a car built in the last five years.”

    While your statement may, in fact, be true, you are overlooking the FACT that the improvements in *new* vehicle emissions are INCREMENTAL improvements over those of the so-cited 15 yr old vehicle … also notwithstanding the FACT of energy expediture for mining, refining and manufacturing of the NEW vehicle.

    The advent of computer-controlled ignition and timing systems coupled with fuel injection and catalytic converters really represent the TURNING POINT in internal combustion engine technology and vehicles with that technology have been around for OVER 15 years.

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  131. Thom says:

    Okay, if the concern is that people will fix up old junkers only to the point that they can be sold to the government, the government should buy cars in somewhat better shape. The government doesn’t have to purchase the absolute worst cars on the road to make a difference in average mileage standards. It accomplishes the goal simply by purchasing below-average cars.

    If the government purchased bad cars rather than lousy-bad cars, the prices of bad cars would go up. That in turn would give people an incentive to fix up their lousy-bad cars — either so they could be sold in the free market as bad cars or to the government.

    As far as getting bad cars IN ACTUAL USE off the streets, this is simple. Insurance companies and state licensing/inspection agencies collect information about mileage on cars on various dates. It’s an easy thing to obtain this data and ONLY purchase cars that are being operated (say) 7000+ miles per year!

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  132. rmermin says:

    this discussion has set me athinkin’.

    1- emissions. why not scuttle ALL regulations. Instead, test and tax each vehicle periodically, as part of the registration process, according to steeply rising curve. Stipulate a single national minimum rate, local jurisdictions have discretion to impose more. Hobby cars could have exemptions. All manner of retrofits can prove their value by the tests. Owners will adjust by the costs.

    2- consumption. scuttle fuel standards, institute stiff national tax at the pump. Owners will adjust.

    3- eliminate non-safety regulatory barriers to to imports. If competition offers economical choices, buyers will adjust.

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  133. Joseph K says:

    The whole thing seems like a bad idea to me from top to bottom, whether it’s long term or short, and most of these other ideas I see in the comments seem only slightly less worse.

    It would seem to me that if you want to reduce pollution from driving then just eliminate all he subsidies for cars and oil. I don’t know about all of them, but the biggest seems to be subsidizing driving by building free roads. You privatize roads and you’ll probably get a improvement in quality and efficiency (eg, better management of traffic and stoplights to improve fuel efficiency) as well as cost of driving costs shifted to drivers. In other words, I, who doesn’t drive, won’t have to help pay the costs of driving to all the drivers out there through my taxes.

    Improving public transportation would also help a lot. Privatizing against seems, empirically, to work better, so why not privatize public transportation too?

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  134. Scott Supak says:

    Make all public transportation free. There’s a subsidy that would go mostly to the poor, and would definitely help the environment.

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  135. Paul Hogroian says:

    “It is a lot more complicated than mpg. There is also the number of pollutants per mile. Take a modern hummer getting 10 mpg and a clunker from 1970 also getting 10 mpg. With the a modern emmission system, the hummer is going to put out a fraction (1/1000) of the nitrous oxides, cabron monoxide and the like”
    This may be true for cars that are over 20 years old, but what about a 1990 Dodge Colt with a computer controlled, 1.5 litre engine that gets 40mpg? Any car from the 90s has excellent pollution standards in place. If you remove the older cars (1900-1985) you won’t make much of a difference because there are few of them left on the road anyway.

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  136. Kirk says:

    I would have to agree with Linda they could just check the vehicle registration in order to verify that a vehicle was currently registered to see if it qualifies to be purchased. Thus it would not lead to people fixing up cars just to cash them in. I do however beg to differ as to any great advances that have been made in making cars any cleaner in the last 15 years. I drove a geo metro that got 40mpg minimum had a catalytic converter, had a throttle body injection and an EGR valve. As far as I know they have not made anything new to cut down on emission in the last 15 years. It passed the air emissions inspections every year without a problem. So 1/1000 is ridiculous. I saw the test results and a 1 liter motor burns less fuel whether it is 15 years old or brand new so will always produce fewer contaminants, my chemistry alone tells me that. If the problem is pollution than charge people to pollute the same way that we charge companies.

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  137. katexas says:

    @18, RE: Texas

    There was also an income restriction. I believe if you were an individual making more than $30,000/year you were deemed too rich to participate in the Texas buyback program.

    (this happened right after I sold my ’93 escort for $1200, but I was not in the market for a car 3 years old or newer, which was part of the deal)

    I can’t imagine there were a lot of people on the market for a new car who make less than $30k and had a car more than 10 years old (OR ANY CAR FAILING EMISSIONS STANDARDS) to sell.

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  138. Richard says:

    A minor quibble: You point out that old cars generate a negative externality in the form of pollution. Old guns generate a negative externality in that they are available for shootings. Aroung half of households with guns and children don’t have trigger locks installed; suicide attempts using guns are much more successful that those attempted without guns.

    So if a gun buyback reduces the number of guns available for these acts, it provides a small but important benefit.


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  139. hottrod says:

    New cars are over-priced junk. Way too expensive to maintain. I only drive old non-computer cars and have very little trouble with them, and the parts are reasonable. I also have always refused to put my family in an unsafe econobox. An airbag does not do you any good when the whole side of the car is ripped away. I’ll stick to the big real steel classics. I am not going to drive something that requires big bucks to maintain, or drive what the government thinks I’m supposed to drive.

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  140. Celeste says:

    I would be one of the people affected by this program. I’m still driving my first car, a ’92 Toyota Pickup with 192,000 miles. I’ve been thinking about replacing it. It’s Bluebook value is around $2000, and combined with my savings right now, I’m only looking at buying something worth $4000, which will probably be close to 15yrs old, so unless they offered enough money to get something much newer, it’s not at all helpful.

    I’m not even considering a new car because I don’t want to commit to monthly payments and paying interest.

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  141. T_Rex says:

    I think that there is a fundamental difference between guns and cars. Most people need cars and most people like newer cars. I think there would be a strong incentive for people to go out and get a new car under this program. It’s still a waste of money and I’m sure mandatory vehicle emission testing is a more effective way of getting rid of old cars, but I think a cash for clunkers program would have an effect on new vehicle purchases.

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  142. Luke John says:

    I know it went through I would buy cars for hundred dollars or so then sell them to the government. It’s called Capitalism.

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  143. Darren Palmer says:

    Now I confess I have not read ALL comments concerning this issue…but I have read a fair number….so apologies if I duplicate anyone’s comments.

    I think the writer of this article seems to have missed the point with this scheme?!?.

    As I understand it it’s to generate more demand for new car purchases (and arguably encourage some of us into greener motors than we had).

    As the owner of a 14yr old heap of a Rover I’m all for this scheme provided I can actually afford a new car if/when it comes to it.

    In order to work this scheme would simply have to work as follows :

    1. Visit participating dealer, choose a car.
    2. Provide proof of ownership for trade-in vehicle
    3. Dealer contacts DVLA
    4. DVLA confirm that car has been owned and road taxed X amount of years by current owner.
    5. DVLA provides information to Dealer
    6. Dealer confirms with you that your car qualifies for the £2000K cashback as you’ve owned/driven it for more than x years required to qualify.
    7. Dealer deducts cash value off the total of car
    8. You cough up
    9. Dealer submits his claim form and waits for Government to come tow your heap away

    That’s roughly how I see it. This would prevent any plonkers with an inclination to buy a wreck, own it for 5 minutes and trade it in.

    There’s no point to this scheme otherwise!

    There’s also no logic to applying this rule, as someone suggested, to the second hand car market as it doesn’t get new cars into the marketplace, which second hand cars already are.

    I’m no dealer (clearly as I drive such a heap) but I welcome this scheme if only to encourage those of us that wouldn’t normally go for the rip-off depreciation riddled new car to actually go out and buy one. As someone else said, your money is doing nothing in a bank at present.

    In all likelihood I’ll be buying second hand again anyway, in fairness, and that decision may be affected by this scheme but the whole reason I’m driving this nail is to make the necessary sacrifice in order to build on my deposit for a house. I may have to wait a year or two before I’m in a position to make use of such a scheme…and by then it’ll probably be too late! …oh well

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  144. Michael 131 says:

    Cash for Clunkers Facts:
    – Must be 8 years old
    – Up to $5,000 for N.A. assembled
    (BMW and Toyota assembled in N.A. hmmm)
    – Up to $4,000 for out of N.A. assembled
    -$7,500 for PHEV and/or 100 mpg
    (interesting note: there is no mass produced PHEV)
    (also, 100 mpg is a fudged number, like towing your car to work and driving it back, then saying your mpg jumped from 25 to 50 mpg! Electricity is your tow truck.)

    Cash for Clunkers Opinions:
    If I got $5,000 for my 1998 Saturn SL2 I would take it in a heartbeat, even though it still gets +32 mpg on the highway. I could buy a Saturn Astra, or Cobalt XFE, and get about the same with comfortable seats.

    The problem is I’m still going into the debt, and I may not repay it by the time I die in ~50 years. Just because my money is coming through the government doesn’t make it any better. Ok, so I can probably work off the auto loan in my lifetime, but what about the portion of bailout dollars attributed to my taxes?

    My worth, and the value of my dollars are entirely based on foreign investors’ evaluation of the U.S. dollar. Ok, Fed! Let’s sell our military, universities, and hospitals to the world, because that’s all we’ve got!

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  145. Bill Newbold says:

    For me this program makes a lot of sense and would have the intended consequences. It would stimulate the economy by creating a new car sale and would get an older 20 MPG car off the road.

    At 48 I am not poor. However, I watch my dollars very carefully and have been saving for retirement. Like many savers have seen my wealth drop substantially. I sell capital equipment and like many workers, I am worried about my job.

    I have bought my share of new cars. In 2000 I bought my current 1999 Grand Marquee lightly used for $17K. It has been a great car and I have taken good care of it; but, is showing and acting its age. Last year I evaluated getting a new car and there simply was not a cost justification. Maintenance and gas savings would only represent maybe 50% of a new car payment.

    Now with the stock market down and uncertainty about my job, I do not want to get a car unless there is a real opportunity to save. If this program goes through at a range of $4000-$5000 I for one will be very likely to buy a new car with a Highway Gas consumption of 35 MPG and a selling price of $20K.


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  146. Ed says:

    I don’t know if anyone else has made this suggestion and I don’t have time to look. But why couldn’t the government issue a credit that can only be used to buy a new car. That was if a poor person didn’t want a new car, (s)he could find a market (maybe Craig’s List or ebay) that trades in these credits. A wealthier person could bid on the the credits, paying what hte market would bear (perhaps 90% of the value of the credits, perhaps 50%). Perhaps that would better achieve the social goals.

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  147. Mandy Ork says:

    This is sort of infuriating to me, someone who lives in Brooklyn and doesn’t own a car.

    They want to reward people for making the bad choice of buying a gas guzzler?

    What’s my reward for living car-free in an urban area and generating less than one quarter of the national average of carbon emissions?

    Oh, right, it’s a city overrun with cars for the benefit of the minority.

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  148. Chad says:

    I was excited when I first heard this. I thought I would trade in my 2000 truck and get extra $$$$ to make it easier to buy a new vehicle.

    $3000……. for the Gov. to scrap it out………uh… no!

    The dealer will give me $3000 or more for the trade in and sell it to someone else for a hefty mark up like usual.

    I am gaining nothing with this program… I could trade it in now for that.

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  149. gary says:

    I wanted to buy a new car this year. I had one picked out and the money was in the checking account. But I don’t have a car to trade in. Now knowing that someone else can buy the same car for $4500 less ruined the whole deal. I could never enjoy the new car knowing someone else could buy it $4500 cheaper than me. I’m so dam mad at the government and the car companies. I’m not buying anything. It is just not fair they are rewarding the people who own gas guzzlers. People who owned gas thrifty cars got screwed on this deal.

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  150. Sis says:

    I really appreciate all the views here. I am always skeptic when I hear the Gov is throwing money at us…no different with this program.

    This is a program that not much thought was put into…it is like a life preserver you throw to someone who just went overboard: Works for the moment, for not suitable for the long run…

    I like what Chance said about the pollution that we already sustained for the used card out there that were new once. Now we have to sustain more for those cars that undoubtedly will be built because this program will ‘reinvigorate’ the market.

    This is a ‘great’ program if you were planning on buying a car anyway and can afford to. If you were sitting on the fence, then this might tilt you more to the buying side.

    If you need a car and cannot afford the payments, you might as well forget it and keep throwing bandaids on the one you have when needed.

    Also, if those taking advantage of the program were forced to really buy an economic vehicle and we had some for sale, it would actually do some good.

    However, in the end as we all know there is nothing free…it is a Gov program, which means we are all going to pay for it. There is no free lunch, ride or anything else.

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  151. ol car guy says:

    What a HEAD-AKE!!!. I’m With a small dealership so i’ve been the one tring to qualify the two deals we have done so far … And now they say the money is gone…You have got too be kidding me… I hope I never see a clunker again… Maybe we should all go to the Whitehouse for a cold one.

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  152. missed out says:

    Program rebates should have been targeted towards the bailout companies only. This would have brought the factory workers back onto the floor, kept the suppliers in business and paid back the taxpayers. Now the money goes abroad to fund foreign programs that will have no payback effect on the U.S. economy.
    Raise the gas price to $5/gal, whereby this difference above the base cost, will fund R&D programs for alternative fuels; also, will reduce CO2 emmissions and fuel consumption by the lowered demand.

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  153. takach says:

    today I decided to trade in my clunker … thru the Cash for Clunkers program and go for my $4500.00. I found out that
    my vehicle is a category III vehicle and qualifies only if I trade out for another category III vehicle. Well duh why would I want another huge gas guzzler? What is the point, you want my gas guzzler off the road, Mr. President give me a better incentive than purchasing a new gas guzzler that will get me
    only 4 miles more per gallon. This is sheer stupidity.

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  154. Rande Isabella says:

    I’ve got four clunkers I could drive into a dealership. However, when your clunker goes into the shop for a new transmission or major engine overhaul or other such work. . . you are disqualified, because of having dropped insurance during the long-term repairs. NONE of my qualified cars qualify, as a result. Also, the timing of this program did not correspond to my seasonal employment schedule. So I still would have been unable to “cash in” as so many have.

    So once I give a few thousand more dollars tot my mechanic, there will be one more Crown Victoria, Mercury Villager, Saab 9000 and Lincoln Continental on the road sucking up gas like there is no tomorrow. I guess I’ll just drive these cars until they barely have any life left in them.

    Then I’ll do what so many others who could not take advantage of the Cash for Clunkers program are talking about doing. . . I’ll drive the car to Washington and park it (legally) near the front of the White House and then fly home.

    Now THAT is freedom of speech!

    Rande Is. . .

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  155. Michael Parker says:

    Cash for clunkers… not a very good program in my opinnion along with everyone else I have talked to and heard about. The problem with the program is that the government built the program but neglected to add in that if we wanted to do the program we had to buy an AMERICAN cars. Instead they just left it open, now all our money that was given out on the program is headed to different countries like japan, china, korea and so on. That takes us back to square one but now with a car payment. Dont forget about the people who could not afford the program and couldnt afford to have a payment either. Those people could have used those vehicles for parts or even been sold to the millions of people who dont have a vehicle. Think of all the classic cars and collectables that were clunked. That drives the price up for the people who always dreamed of owning a classic car and restoring one as a piece of American History, all the father and sons who are looking for a project that can now not find one due to them all being crushed to make japanese cars. You know that is were all the scrap is going. I worked in a business that dealt with scrap, dont tell me im wrong. What should have been done was atleast put in the bill that if you do the program you HAVE to buy an AMERICAN car so that would drive the automobile industry up here. That would then fix the jobs in that industry. As far as crushing the cars so that no one could get them, thats just stupid. If you really wanted to help with that, this is how it should be done, first go ahead and scrap the vehivles BUT atleast sell parts off of them so that the people who couldnt buy parts or find parts for them could have made use of something from. You dont have to sell the actual body with the VIN on it but could have atleast parted it out and let mechanics who cant find engines buy those with the terms that they had to be rebuilt to better specifications and use less fuel, its possible, I did it with an 86 chevy and a 1995 vortec 350 engine. Gas mileage almost doubled. Even kept a soon to be classic alive. The truck gets better gas mileage than my cavalier did, even had all of the smog fixers in place. I hope that everyone is happy with all the problems they caused by doing this program and helping to let America lose part of its history in the process. Hope you have problems with your new cars. Im one of the people who couldnt afford the new vehicle due to being laid off because of just what happened with the cash for clunkers!

    p.s. just fyi alot of the cars on the lots i went to had hundreds of cars that were newer than 2000. many newer than 2006. but was all turned in for over seas cars and trucks. makes you think what our country is going to… is it still the united states of america or is the united states of other countries?

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  156. Sam Rudolph says:

    I am clearly years late to this part, but I just wanted to note the unexpected drawback of the Cash for Clunkers program- the artificial inflation of used-car prices that mostly negatively affected low-income car buyers and high school/college students.

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