Cash for Clunkers Replaces 700,000 Vehicles with More Efficient Models

Image Gallery Eighty-four percent of the vehicles traded in under Cash for Clunkers were trucks, but only 41 percent of the program’s participants used their rebate to purchase a new truck. FLICKR/KODIAX2

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The popular Cash for Clunkers program ended its run on Aug. 25, and the program is estimated to have removed nearly 700,000 inefficient vehicles from U.S. roads.

Officially known as the Car Allowance Rebate System (CARS), the program achieved greater fuel economy gains than originally expected, as consumers chose more fuel-efficient models than were required by the program.

In fact, the average fuel economy of the traded-in vehicles, which were crushed, was 15.8 miles per gallon (mpg), while the average fuel economy of the newly purchased vehicles was 24.9 mpg — a gain of 9.1 mpg, or 58 percent.

That figure makes sense for trade-ins of old cars for new cars, because those trade-ins earned the maximum rebate with a 10 mpg increase in fuel economy. However, analysts expected trade-ins of light trucks (sport utility vehicles, pickups and vans) for new light trucks to drag down the fuel economy gains, as such trade-ins could earn the maximum rebate with a fuel economy gain of only 5 mpg. But according to the U.S. Department of Transportation (DOT), such truck-for-truck trade-ins were less common than expected, as 84 percent of the program participants traded in trucks, but only 41 percent purchased new trucks, which means that more than half of the truck owners traded their vehicles in for a car.

The results are even starker for heavier vehicles, as 8,134 heavy work trucks were traded in, but only 2,408 new heavy work trucks were purchased, and 116,909 large pickups or vans were traded in, but only 46,838 new ones were purchased. The fuel economy of the newly purchased cars was also 19 percent greater than the average fuel economy of all new cars available in the United States.

The CARS program allowed dealers to start providing rebates to customers on July 1, even though the program didn’t officially start until July 24. The billion-dollar program proved so popular that Congress had to quickly approve an additional $2 billion for the program, which was approved by President Obama on Aug. 7.

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