42 million clunkers to go

Despite the popularity of Cash for Clunkers and $3 billion in government funds, the nation's highways will still be full of gas guzzlers.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Aaron Smith, CNNMoney.com staff writer

What I got with Cash for Clunkers
Take a peek at the heaps (no offense) these 6 turned in -- or tried to turn in -- to get their Cash for Clunkers deal.

NEW YORK (CNNMoney.com) -- As Cash for Clunkers motors through its final day, it's time to ask the question: Just how effective was the government rebate program in getting gas guzzlers off the road?

All told, about 750,000 clunkers will be traded in by the time the program officially ends at 8 p.m. ET on Monday, according to an estimate by George Pipas, sales analyst for Ford Motor Co.

That would be roughly 2% of the approximately 42 million fuel hoggers still clunking along.

"Of course it's a very small fraction of the total of inefficient vehicles on the road," said Edward Osann, senior associate with the research group the American Council for an Energy-Efficient Economy.

Osann said that "having inefficient vehicles go to the scrap heap generally is a good thing." But he added that the economy, not the environment, was the prime motive for Cash for Clunkers.

"This was really a stimulus program tweaked to provide some energy-saving benefits, and looked at in that light, it was generally successful," said Osann.

Of course, the program has spurred sales at a time when the economic downturn is keeping American consumers out of the showroom.

As of Monday morning, the U.S. Department of Transportation had received 625,000 applications from dealers for the Cash for Clunkers program, with vouchers totaling $2.58 billion.

The program has been so popular that consumers used up about $1 billion in the first week, prompting Congress to approve an additional $2 billion for the program.

"Consumers, without anyone twisting their arm, blew through $3 billion worth of vouchers in three to four weeks," said Pipas. "Nobody anticipated this kind of success. Nobody saw this tsunami coming."

As part of the government program, car dealers provided vouchers, of either $3,500 or $4,500, to consumers who trade in used vehicles with low fuel efficiency. The consumers used the vouchers to purchase new vehicles. The dealers destroyed the engines with a sodium silicate solution, and then the cars were scrapped.

But not everyone views this type of scrapping as beneficial to the environment.

Michael Wilson, executive vice president of the Automotive Recyclers Association, described the destruction of the engine as a wasteful process.

The transmission in a clunked car also becomes unusable, he said. The engine and the transmission are the most valuable parts of any vehicle and require the most resources to manufacture, Wilson said.

"To produce an engine takes more energy than any other part," said Wilson. "We think that [Cash for Clunkers] is going to have a minimal environmental benefit to it, if any."

Maybe so, but Osann of the American Council for an Energy-Efficient Economy said the program may have pushed consumers to buy more fuel-efficient vehicles.

"It appeared that most of the truck owners who participated in the program drove away in a car," said Osann. "We did not anticipate that."

And Pipas, the Ford analyst, said the program had a "halo effect." He said it steered consumers toward fuel-efficient vehicles like his company's Focus.

The Focus was one of the most popular vehicles purchased by consumers participating in the program, according to the National Highway Traffic Safety Administration and Edmunds.com, along with the Toyota Corolla and the Honda Civic.

"Programs that benefit the economy and benefit the environment are strange bedfellows," said Pipas. "They usually don't share the same hotel room, or the same hotel." To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.