The Wastefulness of the Cash-for-Clunkers Program

Saw this in the November issue of Road & Track…

…the dealership was taking in a lot of trades on the Cash for Clunkers program — they’d sold 60 cars in four days! — but he also noted that, in one respect, it was kind of a shame.

“How so?” I asked.

“Well, when these cars come in, we’re required by law to destroy the engines so they can never run again. The mechanics have been draining the oil and the coolant out of them, and then giving them the old broomstick test, or putting a brick on the accelerator until the engine seizes.”

“Really…” I said, suddenly feeling a little lightheaded.

“We had a really clean older Chevy pickup come in on trade — no rust, 6-cylinder engine running perfectly — and we had to drain the oil and burn out the engine. We also had a nice Windstar minivan come in with about 100,000 miles on it. It ran fine, but we had to destroy it.”

“What happens to the rest of the car, once the engine is gone?”

“It has to be scrapped and parted out.”

Strangely, I hadn’t even asked myself — until that moment — what would happen to our Jeep if we traded it in. I guess I naively pictured it being given to a medical clinic in sub-Saharan Africa, or going to some happy hunting ground where Jeeps are young again, and free to perch on buttes in Monument Valley.

The very idea of intentionally ruining that trusty old 318 in our Jeep — a classic American V-8, and one of the best — made me suddenly queasy. But then maybe that’s just me.

You can read the rest here: Side Glances: Cash for Clunkers

I have to say, I agree with the author. It does seem like a waste to ruin good engines. I understand the motives, but I think it just shows how wasteful government programs are.

12 thoughts on “The Wastefulness of the Cash-for-Clunkers Program”

  1. Our government paying people to destroy assets — I thought that was the best gig we had going.

    I’m holding out for the “Cash for Ghettos” program so I can burn down my house.

    (**end sarcasm**)

  2. Honestly, I find that type of waste especially sickening. I didn’t realize that is what happened to the traded-in vehicles at first.

  3. Yeah, isn’t it wonderful that they took cars that were perfectly good and because they were traded in on this program they are now being recycled some place. The irony that I see is now dealerships are complaining that there are not enough used cars to sell and it is hurting them. I personally never plan on buying a new car for myself ever again. My wife will probably get one but when I figured out what I was losing when buying a new one, I thought that it was ridiculous to buy a new one. I guess that I will have to hold onto my nine year old truck even longer than planned. I sure hope I can keep it running.

  4. The government has this program in an attempt to stimulate the economy and get non-fuel efficient cars off the road. If the dealers were allowed to turn around and sell these same cars you’d all be happy? Next topic, the price of gas and how can I fill my 15 mile a gallon truck for less because the damn government is screwing me.

  5. Agreed.

    The whole program has been a waste from the get go. Destroying perfectly good vehicles is beyond insane. The program is a perfect example of the broken window fallacy. The lawmakers think that destroying a useful product will stimulate the economy by forcing more people to buy newer cars.

    They also market it under the idea that this is somehow better for the environment. The energy costs of building a new vehicle are wayyyyy higher than the cost of a car with bad gas mileage. Not only that but studies have shown that people drive new cars more often than a used car!

    However, we need to see this program for what it was truly meant to do. It is a poorly hidden bailout of the auto industry meant only to prop up car numbers so the depression we’re in doesn’t look as bad as it should…yet.

    And with that goal in mind, this program has been a resounding success. People are talking of green shoots and the end of the recession. Woohoo! If we all think it then it must be true right?

    The problem with this program and programs like it ($8000 housing credit) is that they will cost us more in the long run. But the goal of lawmakers isn’t a sustainable long term but rather a short bubblicious short term.

  6. me #4) don’t kid yourself: the goal is not to get inefficient cars off the road. If that were the case then why do brand-new 2010 vehicles also qualify as “clunkers” for the program:

    http://www.fueleconomy.gov/feg/CarsResult1.jsp?column=1&id=28801

    If we were serious about fuel-efficiency, we’d be raising fuel-efficiency standards for all new vehicles sold in the US, and let the old fleet age-out naturally.

    To address your “stimulate the economy” reason: this is a prime example of the economic fallacy portrayed in the famous “kid breaking merchant’s window” example.

    http://jim.com/econ/chap02p1.html

    Destroying assets does not stimulate the economy, it hurts it.

  7. Before this program began, politicians were asked to donate the cars to charity rather than destroying them. Cars in poor shape would be scrapped. Cars in good shape would be fixed if needed sold or given to the poor. This would have eliminated the negative impact c4c had on auto repair shops, charities that rely on the revenue from car donation and the poor.

  8. I agree it was a wasteful and costly program that only front-ended sales, some of which would have happened natually over the next few months anyway. But what truly disturbed me was the lost opportunity that hundreds of thousands of vehicles would have provided to charities (or to struggling Americans trying to find work who lacked reliable transportation to get off of/avoid getting onto welfare.) But as my husband says, it did get some autoworkers back to work. But to that I say, for how long? What happens to them in Dec, Jan, Feb, etc?

  9. The whole idea was to get these ridiculous cars off the road because they generate an unacceptable level of pollution. If we just dumped them in Africa, we’re making the global pollution problem worse, not better.

    Sure, there are clinics who need a good used car. But it’s better for the planet if they get a higher-mileage used car than a cast-off American clunker.

  10. People act like they were trashing classic Porshe’s or something. The cars traded in were old and inefficient. The cars would have gone to the scrap yard soon anyway, the cash for clunkers just speed up the program. America scraps millions of cars every year. Most of the vehicle will be recyled as scrap metal and they are allowed to reuse some parts of the cars, they aren’t just gonna throw ’em in a landfill or something.

    Its not really wasteful to scrap old wasteful things.

    If you compare a new Prius to an average car on the road the Prius will save you 5,000 gallons of gasoline over its lifetime. So today’s clunkers are wasing 5,000 in gasoline. What about that waste? You know what 5,000 gallons looks like? Where is the outrage over that waste?

  11. How many pickup drivers do you think bought a Prius, Jim?

    Old pickups were traded in for new pickups that passed (barely) muster on efficiency. Old Corolla’s or Skylarks were traded in for Prius’s. Prius was fourth on the DOT list of most popular cars purchased, Jim; not first, second, or third. In fact, if the DOT statistics let all versions of a particular vehicle be grouped together (eg. model with 2 wd and 4 wd versions be considered a single category), Prius isn’t even in the top 10. Ford Escape, Jeep Patriot, and Ford F-150 would be in the top five, Jim. That doesn’t sound quite so green.

    Let’s do some math – I’m not comfortable with the 5000 gallon savings claim.
    Lets say I traded my 120K mile Acura MDX (17 mpg) for a Prius (50 mpg), and expect 100000 miles.
    MDX 5882 gallons for the next 100000 miles.
    Prius 2000 gallons for the next 100000 miles.
    Savings of 3882 gallons. (not 5000 gallons)

    Without the C4C program, I would maybe trade it for a Honda CRV next year.
    CRV with 23 mpg 4347 gallons, for a savings of 1535 gallons.

    Without C4C – save 1535 gallons. MDX will be resold to a bargain purchaser, fulfilling his needs.
    With C4C – save 3882 gallons. Auto to a landfill.

    So – C4C actually saved 2347 gallons. And the cost for this gasoline savings is $4500 from Joe Taxpayer, and a landfilled vehicle (parts weren’t worth saving, Jim). That $4500 could buy me about 1800 gallons of gasoline, so I see 547 gallons of savings now, and a drivable vehicle in the landfill.

    What did you trade in during the C4C program, Jim?

    And thank you for helping buy me my new Prius, made by a Japanese company, that will save me some operating costs until I need a new $4000 battery. Then the cost savings are gone, Jim.

  12. To all those touting the environmental benefits of the fuel-efficient replacement vehicles, I just have one question: Have you calculated the energy required to build and ship a vehicle. This includes burning coal to make steel, casting iron and aluminum etc. to build engines, etc. It is quite easy to prove that MORE energy was wasted and more pollution generated than the Clunkers themselves were ever going to waste over the rest of their lives.

    And the Sub-Saharan clinic comment: WAKE UP PEOPLE – The cars we destroyed were way more fuel-efficient and non-pulluting than most cars in most countries. If we were serious, we would have cashed out THEIR clunkers and given them ours in exchange.

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