6 ms·

The Final Numbers on ‘Clunkers’

21 points by sahaj 17y ago

sahaj 17y ago
here's the DOT press release with more stats: http://www.dot.gov/affairs/2009/dot13309.htm http://www.dot.gov/affairs/2009/dot13309.htm
- sachinag 17y ago
  I wonder how much GM's badge engineering hurt/help them - no individual model is on the top 10 seller list, but they sold more new vehicles than anyone aside Toyota: more than Ford or Honda.
  - roc 17y ago
    Hurts. Always has. All the extra overhead from the redundant dealer networks, the overhead from maintaining multiple 'differentiated' products, redundant marketing, etc. I'd be surprised if that nonsense didn't eat enough off their profit for them to still fall beyond Toyota and Honda. I'm starting to think that the only reason they killed Pontiac instead of Chevy (despite being more popular), was that it allows them to axe more dealers from the network. I also hope they'll incorporate more 'Saturn' lessons into the remaining 'Chevy' car lines. But given how long they've refused to do that, I'm not exactly optimistic.
  - philwelch 17y ago
    That's probably the reason GM is down to Chevy/GMC/Cadillac, comparable to Ford/Mercury/Lincoln or (more appropriately) Chrysler/Dodge/Jeep. Though even in this situation probably 1/3 of the brands named could be dropped no problem.
    - graywh 17y ago
      You forgot Buick. GM also has Saab, Opel, Daewoo, Holden, and Vauxhall, but is selling Saab, Opel, and Vauxhall.
- jws 17y ago
  I fear the mpg stats are misleading because of the inverse nature, but as a rough approximation, 690,000 cars were replaced. Their average mpg went from 15.8mpg to 24.9mpg (these numbers were most likely calculated incorrectly by the DOT). At 10,000/year that is a savings of 230 gallons/car/year or about 1/6 of a billion gallons/year. Very roughly, it would appear to have been a good buy purely from the import/export angle assuming that each gallon saved comes out of our imports. (This also may be very wrong because the program only accelerated the replacement, so it isn't fair to assume that the clunker would still be running 10 years from now. On the other hand, it may have spurred people to more efficient cars to get the larger rebate. That could be a lifelong change when people realize they can get along fine with a more efficient car. I only rarely miss my 17/18mpg 3/4T truck now that I drive a cheap 25/40mpg tiny car. I can borrow or rent a truck when I need it.)
bprater 17y ago
Interesting that 8/10 new cars that were purchased where foreign. I wonder what percentage of that rebate trickles into American pockets and which goes overseas.
- dzlobin 17y ago
  I think what's slightly more interesting is the fact that the top 10 purchased cars are all small cars, given that the majority of the cars likely came from suburban America.
  - dougp 17y ago
    There is a slight stat game going on here that may or may not be intentional. The evidence is at #10 Ford Escape FWD. Trucks and SUV's come in a variety of transmission configurations and are actually counted as unique models for these stats. Here is normalized list from earlier this month http://money.cnn.com/2009/08/07/autos/cash_for_clunkers_sales/index.htm?cnn=yes http://money.cnn.com/2009/08/07/autos/cash_for_clunkers_sale...
- akd 17y ago
  That's not necessarily true. Brands which sold a lot of different models could sell a large number of cars without making it to the top 10 models.
  - minus1 17y ago
    Here's the breakdown by manufacturer from the DOT press release: New Vehicles Manufacturers Toyota - 19.4% General Motors - 17.6% Ford - 14.4% Honda - 13.0% Nissan - 8.7% Hyundai - 7.2% Chrysler - 6.6% Kia - 4.3% Subaru - 2.5% Mazda - 2.4% Volkswagen - 2.0% Suzuki - 0.6% Mitsubishi - 0.5% MINI - 0.4% Smart - 0.2% Volvo - 0.1% All Other - <0.1%
- steveplace 17y ago
  Do note that foreign company does not mean a transfer of capital over to foreign hands. TM has a pretty large industrial footprint inside the US, and then you've got pensions and other funds that own TM paper.
steveplace 17y ago
I'm still against the premise of this program. This was a redistribution of wealth to failing industry and to people who owned poorer cars. A couple B's in the larger scheme of things may not seem like a lot, but the underlying ideology is quite dangerous, and I'm hearing rumours that this may be expanding to appliances that are not energy efficient. There's a much simpler way to accomplish the same effect: tax energy. You will have an economic incentive to get more efficient appliances, cars, etc while this costs the federal government very little. To combat the regressiveness of this proposal, the feds could offset this with reducing payroll taxes. The obvious downside of this is that it doesn't have the "sexiness" of the rebate (it's a behavioral finance thing) and we wouldn't see the returns immediately.
- solutionyogi 17y ago
  I am in agreement that this program was misplaced and complete abuse of taxpayer's money. I take public transportation to work but my taxes have been used so that someone can buy a brand new car. And why do we think that 3 billion dollars is not a lot just because Government is spending it? E.g. if Exxon waste 3 billion dollars, do you think shareholders should not complain becaue Exxon earns billions of dollars in profit? Waste is a waste, no matter how small. Also, I disagree with your alternate plan. Why do you think that taxing energy will helpful? Government will spend (and waste) all the tax money you give to them and then some. Why not propose a minimal government and minimal taxes and let the free market workout how resources should be allocated?
  - mlinsey 17y ago
    To answer you last question, because we are starting with the premise that the free market does not properly price certain externalities (for example, the costs from environmental damage associated with climate change). You may not agree with this premise, in which case a debate about how to effectively encourage energy efficiency is a strange place to find yourself.
    - jhancock 17y ago
      I agree with this response. But your prior idea of an energy tax, I disagree. Instead of a tax, you could simply make it illegal to sell vehicles under a certain efficiency rating. Congress has taken this approach, sort of. The only thing wrong with it is the bills get watered down with loopholes and the efficiency numbers are too little too late.
keltecp11 17y ago
I'm curious who came up with the title "cash for clunkers" it worked quite well.
- gdee 17y ago
  Whomever did, it's funny that it would appear to be against it from a cursory examination, what with using such derisive term, and yet the effect is probably just the reverse... (negative association) hence maybe even a supporter. Or proponent. A social hack of sorts.
wolfish 17y ago
Cash for Clunkers reminds me of the Broken Window Fallacy http://en.wikipedia.org/wiki/Parable_of_the_broken_window http://en.wikipedia.org/wiki/Parable_of_the_broken_window
paul9290 17y ago
WoW not one of the top 10 sold cars is a GM model - though that's not surprising. Though you'd think since all their troubles which were noted in Nov 08 they'd try to get a car out in the market that would be more attractive then any Honda, Toyota and Ford. Why did we bail them out? For the 40K Volt that may provide 230mpg?
- sokoloff 17y ago
  If, merely by deciding to do so, GM were capable of putting a car on the market that would be more attractive than those competitors, wouldn't they have been doing that before Nov 08 and thus not been in need of the bail out in the first place?
mlinsey 17y ago
The statstics I'd really be intersted in (and these would be impossible to measure precisely, buT well-thought-out estimates woul be helpful.) would be the total estimated energy usage of new vehicles purchased under the program, compared to the energy usage of the clunkers traded in, and with that net result compared to the energy used in manufacturing all those new cars.
yanowitz 17y ago
Here's a state-by-state breakdown per capita: http://bit.ly/rVneF http://bit.ly/rVneF
- sp332 17y ago
  The original link is not really that long: http://verifiable.com/charts/3803 http://verifiable.com/charts/3803
  - TheElder 17y ago
    I never feel comfortable clicking those shortened URLs.
msluyter 17y ago
Although I'm generally progressive and agree with the environmental goals of this program, I worry that it's essentially encouraging people to take on new debt through car loans. Aren't we as a society already highly overleveraged?
ShabbyDoo 17y ago
>the Ford Explorer topped the list of most traded-in clunkers We helped with that. I had a 2002 Explorer with 145K miles that we traded in for a Honda Odyssey. Since we went from the SUV class to the car class, the mpg rating difference only had to be five mpg to qualify for the $4500 subsidy. As a libertarian, I oppose this program, but it certainly was an appealing proposition considering that I would have likely gotten $3K max if I sold the Explorer outright. What is sad is that, while there were a bunch of things I didn't bother to get fixed (air conditioning, etc.), the vehicle was still quite drivable and probably would have lasted another 100K miles with three or four thousand in maintenance. A huge percentage of the world's population can only dream of one day owning a car that we as Americans are sending to the scrap heap.

21 points by sahaj 17y ago

sahaj 17y ago

here's the DOT press release with more stats: http://www.dot.gov/affairs/2009/dot13309.htm http://www.dot.gov/affairs/2009/dot13309.htm

sachinag 17y ago
I wonder how much GM's badge engineering hurt/help them - no individual model is on the top 10 seller list, but they sold more new vehicles than anyone aside Toyota: more than Ford or Honda.
- roc 17y ago
  Hurts. Always has. All the extra overhead from the redundant dealer networks, the overhead from maintaining multiple 'differentiated' products, redundant marketing, etc. I'd be surprised if that nonsense didn't eat enough off their profit for them to still fall beyond Toyota and Honda. I'm starting to think that the only reason they killed Pontiac instead of Chevy (despite being more popular), was that it allows them to axe more dealers from the network. I also hope they'll incorporate more 'Saturn' lessons into the remaining 'Chevy' car lines. But given how long they've refused to do that, I'm not exactly optimistic.
- philwelch 17y ago
  That's probably the reason GM is down to Chevy/GMC/Cadillac, comparable to Ford/Mercury/Lincoln or (more appropriately) Chrysler/Dodge/Jeep. Though even in this situation probably 1/3 of the brands named could be dropped no problem.
  - graywh 17y ago
    You forgot Buick. GM also has Saab, Opel, Daewoo, Holden, and Vauxhall, but is selling Saab, Opel, and Vauxhall.
jws 17y ago
I fear the mpg stats are misleading because of the inverse nature, but as a rough approximation, 690,000 cars were replaced. Their average mpg went from 15.8mpg to 24.9mpg (these numbers were most likely calculated incorrectly by the DOT). At 10,000/year that is a savings of 230 gallons/car/year or about 1/6 of a billion gallons/year. Very roughly, it would appear to have been a good buy purely from the import/export angle assuming that each gallon saved comes out of our imports. (This also may be very wrong because the program only accelerated the replacement, so it isn't fair to assume that the clunker would still be running 10 years from now. On the other hand, it may have spurred people to more efficient cars to get the larger rebate. That could be a lifelong change when people realize they can get along fine with a more efficient car. I only rarely miss my 17/18mpg 3/4T truck now that I drive a cheap 25/40mpg tiny car. I can borrow or rent a truck when I need it.)

bprater 17y ago

Interesting that 8/10 new cars that were purchased where foreign. I wonder what percentage of that rebate trickles into American pockets and which goes overseas.

dzlobin 17y ago
I think what's slightly more interesting is the fact that the top 10 purchased cars are all small cars, given that the majority of the cars likely came from suburban America.
- dougp 17y ago
  There is a slight stat game going on here that may or may not be intentional. The evidence is at #10 Ford Escape FWD. Trucks and SUV's come in a variety of transmission configurations and are actually counted as unique models for these stats. Here is normalized list from earlier this month http://money.cnn.com/2009/08/07/autos/cash_for_clunkers_sales/index.htm?cnn=yes http://money.cnn.com/2009/08/07/autos/cash_for_clunkers_sale...
akd 17y ago
That's not necessarily true. Brands which sold a lot of different models could sell a large number of cars without making it to the top 10 models.
- minus1 17y ago
  Here's the breakdown by manufacturer from the DOT press release: New Vehicles Manufacturers Toyota - 19.4% General Motors - 17.6% Ford - 14.4% Honda - 13.0% Nissan - 8.7% Hyundai - 7.2% Chrysler - 6.6% Kia - 4.3% Subaru - 2.5% Mazda - 2.4% Volkswagen - 2.0% Suzuki - 0.6% Mitsubishi - 0.5% MINI - 0.4% Smart - 0.2% Volvo - 0.1% All Other - <0.1%
steveplace 17y ago
Do note that foreign company does not mean a transfer of capital over to foreign hands. TM has a pretty large industrial footprint inside the US, and then you've got pensions and other funds that own TM paper.

steveplace 17y ago

I'm still against the premise of this program. This was a redistribution of wealth to failing industry and to people who owned poorer cars. A couple B's in the larger scheme of things may not seem like a lot, but the underlying ideology is quite dangerous, and I'm hearing rumours that this may be expanding to appliances that are not energy efficient. There's a much simpler way to accomplish the same effect: tax energy. You will have an economic incentive to get more efficient appliances, cars, etc while this costs the federal government very little. To combat the regressiveness of this proposal, the feds could offset this with reducing payroll taxes. The obvious downside of this is that it doesn't have the "sexiness" of the rebate (it's a behavioral finance thing) and we wouldn't see the returns immediately.

solutionyogi 17y ago
I am in agreement that this program was misplaced and complete abuse of taxpayer's money. I take public transportation to work but my taxes have been used so that someone can buy a brand new car. And why do we think that 3 billion dollars is not a lot just because Government is spending it? E.g. if Exxon waste 3 billion dollars, do you think shareholders should not complain becaue Exxon earns billions of dollars in profit? Waste is a waste, no matter how small. Also, I disagree with your alternate plan. Why do you think that taxing energy will helpful? Government will spend (and waste) all the tax money you give to them and then some. Why not propose a minimal government and minimal taxes and let the free market workout how resources should be allocated?
- mlinsey 17y ago
  To answer you last question, because we are starting with the premise that the free market does not properly price certain externalities (for example, the costs from environmental damage associated with climate change). You may not agree with this premise, in which case a debate about how to effectively encourage energy efficiency is a strange place to find yourself.
  - jhancock 17y ago
    I agree with this response. But your prior idea of an energy tax, I disagree. Instead of a tax, you could simply make it illegal to sell vehicles under a certain efficiency rating. Congress has taken this approach, sort of. The only thing wrong with it is the bills get watered down with loopholes and the efficiency numbers are too little too late.

keltecp11 17y ago

I'm curious who came up with the title "cash for clunkers" it worked quite well.

gdee 17y ago
Whomever did, it's funny that it would appear to be against it from a cursory examination, what with using such derisive term, and yet the effect is probably just the reverse... (negative association) hence maybe even a supporter. Or proponent. A social hack of sorts.

wolfish 17y ago

Cash for Clunkers reminds me of the Broken Window Fallacy http://en.wikipedia.org/wiki/Parable_of_the_broken_window http://en.wikipedia.org/wiki/Parable_of_the_broken_window

paul9290 17y ago

WoW not one of the top 10 sold cars is a GM model - though that's not surprising. Though you'd think since all their troubles which were noted in Nov 08 they'd try to get a car out in the market that would be more attractive then any Honda, Toyota and Ford. Why did we bail them out? For the 40K Volt that may provide 230mpg?

sokoloff 17y ago
If, merely by deciding to do so, GM were capable of putting a car on the market that would be more attractive than those competitors, wouldn't they have been doing that before Nov 08 and thus not been in need of the bail out in the first place?

mlinsey 17y ago

The statstics I'd really be intersted in (and these would be impossible to measure precisely, buT well-thought-out estimates woul be helpful.) would be the total estimated energy usage of new vehicles purchased under the program, compared to the energy usage of the clunkers traded in, and with that net result compared to the energy used in manufacturing all those new cars.

yanowitz 17y ago

Here's a state-by-state breakdown per capita: http://bit.ly/rVneF http://bit.ly/rVneF

sp332 17y ago
The original link is not really that long: http://verifiable.com/charts/3803 http://verifiable.com/charts/3803
- TheElder 17y ago
  I never feel comfortable clicking those shortened URLs.

msluyter 17y ago

Although I'm generally progressive and agree with the environmental goals of this program, I worry that it's essentially encouraging people to take on new debt through car loans. Aren't we as a society already highly overleveraged?

ShabbyDoo 17y ago

>the Ford Explorer topped the list of most traded-in clunkers We helped with that. I had a 2002 Explorer with 145K miles that we traded in for a Honda Odyssey. Since we went from the SUV class to the car class, the mpg rating difference only had to be five mpg to qualify for the $4500 subsidy. As a libertarian, I oppose this program, but it certainly was an appealing proposition considering that I would have likely gotten $3K max if I sold the Explorer outright. What is sad is that, while there were a bunch of things I didn't bother to get fixed (air conditioning, etc.), the vehicle was still quite drivable and probably would have lasted another 100K miles with three or four thousand in maintenance. A huge percentage of the world's population can only dream of one day owning a car that we as Americans are sending to the scrap heap.