Advertisement

Archive for Thursday, November 5, 2009

Analysis questions Cash for Clunkers

Most common swap: New pickups for old ones

November 5, 2009

Advertisement

Toyota vehicles are displayed Wednesday at the D. Longo Toyota dealership in El Monte, Calif. The Cash for Clunkers program was very good for D. Longo, a large Toyota dealer just east of Los Angeles, but its environmental effects have come under scrutiny from a recent AP analysis.

Toyota vehicles are displayed Wednesday at the D. Longo Toyota dealership in El Monte, Calif. The Cash for Clunkers program was very good for D. Longo, a large Toyota dealer just east of Los Angeles, but its environmental effects have come under scrutiny from a recent AP analysis.

— The most common deals under the government’s $3 billion Cash for Clunkers program, aimed at putting more fuel-efficient cars on the road, replaced old Ford or Chevrolet pickups with new ones that got only marginally better gas mileage, according to an analysis of new federal data by The Associated Press.

The single most common swap — which occurred more than 8,200 times — involved Ford F150 pickup owners who took advantage of a government rebate to trade their old trucks for new Ford F150s. They were 17 times more likely to buy a new F150 than, say, a Toyota Prius. The fuel economy for the new trucks ranged from 15 mpg to 17 mpg based on engine size and other factors, an improvement of just 1 mpg to 3 mpg over the clunkers.

Owners of thousands more large old Chevrolet and Dodge pickups bought new Silverado and Ram trucks, also with only barely improved mileage in the middle teens, according to analysis of sales of $15.2 billion worth of vehicles at nearly 19,000 car dealerships in every state. Those deals helped the Ford F150 and Chevy Silverado — along with Ford’s Escape midsize SUV — climb into the top 10 most-popular vehicles purchased with the government rebates. The most common truck-for-truck and truck-for-SUV deals totaled at least $911 million.

Worse or same mileage

In scores of deals, the government reported spending a total of $562,500 in rebates for new cars and trucks that got worse or the same mileage as the trade-ins — in apparent violation of the program’s requirements. The government said it is investigating those reports and said in some cases they were probably entered incorrectly by dealers or based on outdated fuel economy figures.

The National Highway Traffic Safety Administration is still reviewing the reports, and any dealers that submitted invalid trade-ins will be directed to return the government rebate, spokesman Eric Bolton said Wednesday.

The new data, obtained by the AP under the Freedom of Information Act, include details of 677,081 clunker trade-ins processed by the government through Oct. 16. More than 95,000 of the vehicles purchased — or about one in seven — got less than 20 mpg, according to the data.

The new figures represent the first substantial outside accounting of the clunkers program, lauded by the White House and the Transportation Department for improving fuel economy, stimulating sales and taking the dirtiest vehicles off the road. The data show the average fuel economy was 15.8 mpg for the old vehicles and 24.9 for the new ones. But plenty of consumers bought relatively low-mileage trucks and SUVs.

“If we’re looking for the environmental story here, we’re going to be disappointed,” said Jeremy Anwyl, chief executive at Edmunds.com, an analyst firm. “It might have started out from the perspective of improving the environment, but it got detoured as a way to stimulate the economy.”

Commuter cars

Popular high-mileage commuter cars including the Toyota Corolla, Honda Civic, Toyota Camry and Ford Focus also were among the Top 10 most popular new vehicles bought under the four-week program, with 105,280 of those models sold for a total of about $2 billion.

Bolton, the NHTSA spokesman, said Wednesday the program “proved to be a win for the economy and the environment” because it helped financially struggling dealerships and auto manufacturers and because, under the program’s rules, clunkers were replaced with vehicles that got better mileage.

Chris Moss of Smithtown, N.Y., traded in his 1992 white Ford F150 pickup for a new Chevrolet Malibu hybrid for his wife. When he drove his old truck to the dealership’s back lot with the rest of the clunkers, “90 percent of what you saw were old 150s and Explorers,” he said.

The $3 billion program, or the Car Allowance Rebate System, ran from July 27 to Aug. 25 and required that new vehicles get better mileage — at least 22 mpg for cars and either 15 mpg or 18 mpg for trucks depending on class — and that trade-ins get no more than 18 mpg. The trade-ins were required to be destroyed in exchange for $3,500 or $4,500 rebates.

“The value that the customer got for a lot of these vehicles was just a gift, no question,” said Scott Pundt, sales vice president for the Dorschel Group of Rochester, N.Y., the No. 4 dealership in the U.S. with 592 vehicles sold under the program.

Comments

SettingTheRecordStraight 5 years, 1 month ago

And this is the government we want commanding our health care system?

Commenting has been disabled for this item.