What Was Cash for Clunkers?

Cash for Clunkers was a U.S. government program that provided financial incentives to car owners to trade in their old, less fuel-efficient vehicles and buy more fuel-efficient vehicles. The purpose of the program was primarily to act as an economic stimulus during the 澳洲幸运5官方开奖结果体彩网:Great Recession by providing t▨he population with monetary incentives to buy new cars, thereby increasing automobile sales, while at the same time reducing carbon emissions by replacing old vehicles with new, fuel-efficient ones.

Understanding Cash for Clunkers

The 澳洲幸运5官方开奖结果体彩网:Car Allowance Rebate System (CARS) was signed into law by President Obama in June 2009 with mostly bipartisan support in Congress. The law was administered by the National Highway Traffic Safety Administration (NHTSA). Car dealers submitted the required information to the NHTSA on behalf of qualified new car buyers.

Requirements for Cash for Clunkers

The program began in July 2009. To qualify for the creཧdit, a traded-in used car had to meet the following criteria:

• Be less than 25 years old
• Have an EPA-rated fuel efficiency of less than 18 miles per gallon
• Be in drivable condition

The traded-in vehicle was required to be scrapped, the engine rendered unusable, and its body crushed or shredded.

In addition, the new car being purchased had to have an EPA-rated fuel efficiency of more than 22 miles per gallon for a credit of $3,500 or one of 28 MPG or higher for a credit of $4,500. The program ended Aug. 24, 2009.

澳洲幸运5官方开奖结果体彩网: The rules for trucks were more com꧋plicated.

Light- and standard-duty model trucks, including SUVs, vans, and pickup trucks had the followin💦g parameters:

• The new truck had to have a fuel-efficiency mileage rating of 18 mpg or more.
• The new truck had to have at least a two MPG higher rating to qualify for the $3,500 coupon or at least five MPG higher for the $4,500 credit.

澳洲幸运5官方开奖结果体彩网: For heavy-duty trucks:

• The new truck had to have a rating of 15 MPG or more.
• The new truck had to have at least one MPG higher rating to get the $3,500 coupon and at least two MPG higher to qualify for the $4,500 credit payment.

Advantages a🌼nd Dis𒊎advantages of Cash for Clunkers

Supporters of the program have argued that the program was a success because it provided a stimulus to the economy and replaced many fuel-inefficient vehicles with more fuel-efficient ones that created less pollution. The program removed over 677,000 fuel-inefficient cars from the road.

However, the program has been criticized. The libertarian Mises Institute called the program an example of the "broken windows" fallacy, which holds that spending creates wealth. Analysts with Edmunds.com partly blamed the program for a shortage of used vehicles. While the program was partly intended as a stimulus for domestic auto manufacturers, only about 49% of new vehicles purchased were manufactured in the U.S.

The National Bureau of Economic Research stated that the program's positive effects were modest, short-lived, and that most of the transactions it spurred would have happened anyway. A study by Edmunds claims that the program spurred a net 125,000 vehicle purchases, costing taxpayers an average of about $24,000 per transaction.

Furthermore, most scientific analysts believe that the benefit to the climate was negligible primarily because the program resulted in a very high cost per ton of CO2 avoided.

The Bottom Line

While the Cash for Clunkers program did result in decreased carbon emissions, a Brookings Institution study suggests that there are more cost-effective policies for reducing emissions. The program regulations required the traded-in vehicle to be crushed or shredded. Metal shredder waste has been found to contain hazardous waste.