Junked: 'Cash for Clunkers' not as successful as Feds hoped
Nov 5th 2009 6:00AM
Updated Nov 5th 2009 10:26AM
Even though last summer's Cash for Clunkers program was rated a success by some, a new report obtained by the Associated Press says the economy might not have fared as well as hoped under "Clunkers."
Wednesday, the AP dug up Federal numbers that showed many of the trades didn't increase fuel efficiency all that much. Many of those trading in gas-guzzlers opted for similar (but brand new) petroleum chuggers that got only a few more miles to the gallon than the clunker.
The Federal data showed the Clunker most often traded in was the Ford 150 pick-up truck. But more than 8,000 of those sent to the scrap pile were replaced with a brand new pick-up truck, netting the consumer the incentive of $3,500 to $4,500 to up their fuel efficiency by no more than three miles at best.
The government also reported spending more than $500,000 in rebates for new vehicles that had equal or worse mileage than the vehicle being traded in. Now an investigation is underway to determine whether the dealer could have been at fault, possibly reporting data incorrectly or using outdated fuel efficiency numbers.
This latest report on the Cash for Clunkers program comes on the news that the average taxpayer paid $24,000 for each car purchased under the program -- whether they rolled out of the showroom behind a new set of wheels or not.
Some 15 other deals in which consumers traded in large pick-up trucks for H3 Hummers are also reported to be under investigation. And even though the Hummer may technically qualify (because of the mileage requirements) it seems hard to believe that's what lawmakers had in mind when they approved this program.
Sound off. Did you cash in on Cash for Clunkers? What grade would you give the Feds on its handling of the program?