Cash for clunkers value

Update below, they’re not all buying Ford Escapes. Yay!

“DETROIT (Reuters) – The punishing four-year decline in U.S. auto sales may have reached a turning point this week — just as Michael Papa handed over the keys to his 1996 Ford Explorer for a government-sponsored trade-in.

“Papa, a Detroit-area restaurant owner, and thousands of other Americans took advantage over the past week of the U.S. government’s ‘Cash for Clunkers’ incentive of up to $4,500 to trade in older gas-guzzlers for newer, more fuel-efficient cars.

“The sudden rush of demand at car dealerships long empty of customers quickly exhausted the $1 billion allocated for the program and drove U.S. auto sales to their highest level of 2009, analysts and industry executives said.

“‘I wasn’t really looking for a new car, but that was a big incentive. That was the driving force to finally get rid of (the old car),’ said Papa.

“His Explorer had 150,000 miles on it and averaged 15 miles per gallon. The Ford Escape he got in return posts average fuel economy of 24 miles per gallon.”
Clunker trade-ins to boost July U.S. auto sales, Reuters, August 3, 2009

I think we got more for that first billion than 222,222 gas guzzlers off the roads. I’d be happier if they all had to buy really fuel efficient cars or hybrids, but this isn’t a bad lurch toward gasoline efficiency. Oh, yeah, auto sales are good, too.

This is also better than a tax deduction because the saving is RIGHT NOW for the buyer and most of us are a RIGHT NOW kind of consumer. I’m not, but apparently 222,222 of my fellow Americans are.

Be interesting to see what happens in a year or two when former gas guzzler drivers’ gasoline costs are half as much. Yay!

UPDATE 080609:
“Toyota’s Corolla sedan overtook the Ford Focus as the best-selling vehicle in the “clunker” program. Toyota had two other passenger cars, the Prius hybrid and the Camry, in the top five. The Honda Motor Co Civic was No. 3.”
U.S. “clunker” sales top 180,000: officials, Reuters, August 6, 2009

I have a Toyota Corolla and it gets great gas mileage. It also starts when I turn the key and keeps running until I turn it off. It’s also comfortable and not flashy, but still easy on the eyes. I’ve had Fords (69 Mustang and some year Escort) and they just weren’t as good experiences as I’ve had with Toyotas. I had a Toyota Echo, I had an accident in the Echo, the Echo was crushed and totaled by a Chevy Tahoe SUV. The other driver filed a medical claim from being slammed around in her SUV while crushing my fuel-efficient compact car. I didn’t have any injuries. Proof once more that size does not matter. Toyotas will always be my first choice when buying a car.

I’m glad to know people are voluntarily buying fuel efficient and hybrid cars on the program. America is getting smarter by the minute. And someday American automakers get smart and make cars as well as Japan.

This entry was posted in amused, economics. Bookmark the permalink.