PREFACE: I updated total vehicles and figures from the initial post. I mistakenly thought the program had ended after only 22k vehicles trades, and there appear to be many many more in the system still.
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So, NPR is reporting that the Cash for Clunkers program is ending because of a fund shortage after only 4 days and 22,782 certified trades, with an expected 250,000 trades to take place according to this story. Let’s do a little math on what this means.
Let’s be generous and say every one of these vehicles drives for 12,400 miles in a year. Let’s also say that the vehicle traded in had a combined fuel economy of 15 miles per gallon, and the new vehicle has a savings of 25 miles per gallon.
At 15 miles per gallon, each driving 12,400 miles, these vehicles would consume 2,066,666,666 gallons of fuel. The vehicles accumulating the same mileage at 25 miles per gallon will consume 124,000,000 miles per gallon. This gives us a fuel savings of 1,942,666,666 gallons of fuel.
How much of a cut in fuel consumption would this provide? According to this Infoplease page, in 2006, all passenger vehicles in the United States, all 135,400,000 of them, consumed 74,983,000,000 gallons of fuel. That’s a reduction of 2.5%. If the aim of this program is significantly reducing emissions or dependence on foreign oil, then it fails.
By the way, the 12,400 miles driven in a year was the average for passenger vehicles in the United States in 2006, according to that same Infoplease page. I’m just making guesses as far as mileage gains, but that’s neither here nor there. These figures should give some indication that the Cash for Clunkers program is nothing more than an a feel-good exercise in burning tax dollars.
EDIT:
When I first wrote this post, I was against the program, but after revising the figures for 250 thousand vehicles versus 22 thousand, I think this program doesn’t go far enough. We spent a trillion dollars on the “stimulus”, and are spending a billion on this program. The bang for the buck is a lot higher than I thought.
