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Cash for Clunkers Compromise Just Another Tax-Payer Bailout for SUV Drivers

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That’s right. I’m calling you out, Energy and Commerce Democrats. This Cash for Clunkers program may seem like a sunshine-y way to get Americans into fuel-efficient vehicles, but once again, reading the fine print, I notice that the program may be leaving a wide open door for Americans to buy more SUVs that still don’t get anywhere near even the old CAFE standard of 27.5 MPG.

cafe-standards-04-02-2009

Cash for Clunkers, if it passes Congress, will give up to one million American automobile buyers a voucher to use towards the purchase of a new, more fuel efficient vehicle. The vouchers come in two amounts — $3500 or $4500. So let’s multiply the average of those two amounts ($3000) by the number of vouchers, 1 million. The total “cost” for this program will be $4,000,000,000. That billion with a B. And that is not even factoring in administrative costs and what not.

1990 Dodge Monaco...classy.

1990 Dodge Monaco...classy.

The real problem lies in who is getting these magical vouchers. It’s not passenger car people. The vouchers will only go to people who can trade in a passenger vehicle that gets less than 18 MPG, which would be a 1990 Dodge Monaco or a 1985 Cadillac El Dorado convertible. Seriously, there are so few relatively modern “passenger vehicles” — that is not a light-duty truck, SUV, or large light-duty truck — that get less than 18 MPG that I’m guessing that very few Cash for Clunkers vouchers will be going to passenger car buyers.

So who will be getting these vouchers? Considering the vast majority of non-hybrid trucks and SUVs are lucky if they get a combined MPG of 18, then I am going to go out on a limb and say that only those who have a gas-guzzling truck or SUV will be able to qualify for the cash for clunker voucher. And the real winners are…American SUV makers.

In order to get the voucher for trading in a light-duty truck, you must be turning in a truck that gets under the 18 MPG threshold (check) and you need only to find a new truck or SUV that gets 2 mpg better than your trade-in. 2 mpg? Really? So we are going to reward those who turn in an SUV that gets, let’s say 18 MPG, for a new SUV that gets 21 MPG.

suv-econ-gas-pumpAnd when it comes to the large light-duty truck category, the trade-in truck only has to get one MPG better than the lower 15 MPG threshold to qualify for the $3500 voucher. If you upgrade to a large light-duty that gets 2 MPG better than your last truck, then you get the full $4500 voucher for that new 17 MPG truck.

Ok, so who couldn’t use $3500 or $4500 to buy a new car. I’m sure many a car buyer would be super stoked to get a voucher to buy a car that gets better gas mileage, but nope, sorry, the voucher is not for you, unless you are still driving a 1993 Lincoln Continental. But if you are driving a 2006 GMC Yukon, well, then you get a voucher for a new SUV that only gets 18 MPG.

Yay! The world is safe at last.

Let’s call a spade a spade, shall we? I’m all for people making better decisions when it comes to buying cars, but come on, who stands to benefit from these vouchers? The same people who got a tax credit for buying those gas-luvin’ SUV’s five years ago.

When this bill goes before Congress, contact your representative and your senators to bitch about this, unless of course, you are in the market for a new SUV.

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2 Responses to “Cash for Clunkers Compromise Just Another Tax-Payer Bailout for SUV Drivers”

  1. Elizabeth Says:

    Hi folks,
    Need help choosing a diesel car with a 6 L budget…….?

  2. Jim montek Says:

    thanks for sharing such a nice article. i really enjoyed reading it.

Leave a Reply


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