Cash for Clunkers Numbers Are In; Ford Focus Tops Sales

FordFocus The Obama administration is touting the success of the Cash for Clunkers program based on the first 80,000 vehicles processed. So far, Detroit’s Big Three account for 47% of sales, and the Ford Focus is the top-selling vehicle in the program.

This goes quite a way toward debunking the talking points of conservative commentators who claimed the program was only helping “limousine liberals,” as most liberals who ride in limousines don’t tend to buy a Focus as a second car.

In addition, four of the top 10 best-selling cars are manufactured by Ford, GM or Chrysler, and more than half of the top 10 are manufactured in the U.S., according to the Department of Transportation.

For those in Congress who wanted the CARS program to have stricter environmental requirements, it seems consumers are choosing to go for high mileage on their own: 83% of the trade-ins have fallen into the SUVs/light trucks category, while 60% of the new vehicles purchased have been cars. So far, the program has generated a 61% increase in fuel economy, according to the White House.

The average fuel economy of new vehicles purchased under the program is 25.4 mpg, while the average EPA rating for the discarded vehicles is 15.8 mpg, making for a 9.6-mpg increase. This is well beyond the savings we tallied in our earlier environmental thought experiment. The White House touts the $700 to $1,000 in gas this will save these consumers every year, as well as the fact that Cash for Clunkers is putting safer cars on the road that dramatically reduce air pollution.

Obviously, the Obama administration is leaning hard on the Senate to finance the CARS program with an additional $2 billion, already approved by the House. The vote is expected for either Wednesday or Thursday.

Big Three Take 47 Percent of ‘Cash for Clunkers’ Sales; Ford Focus Top-Seller (Detroit News)

Comments 

mj batson

I just need someone to explain to me how on earth a 1997 Ford Crown Victoria made the cash for clunker list when the 1987 did not. Am I to believe that 10 years later Ford was producing cars with worse gas mileage? Something smells with the this last minute switcheroo of cars that got left off the clunkers eligibility list; why aren't any of the news talking heads investigating this? If the government was really looking to get the old gas guzzlers off the roads, shouldn't cars made in the 1980's be targeted before newer models? I honestly do not get it.

Tony

"...If the government was really looking to get the old gas guzzlers off the roads, shouldn't cars made in the 1980's be targeted before newer models?..."

I don't think environment and fuel use were government's MAIN concerns. The auto sales were, read: jobs.

So what they did? They took the money from China and gave it to the few people, who happen to be ready for a new car (probably anyway). They also put some other people into new car range with additional $4.5K benefit.

I am not sure how capitalism works anymore. Looks like in the US the middle class is to pay taxes to support failing business, health care and CARS, and all those crazy bridges to nowhere.

sheth

Touting mileage gains based on differences between the old and new car is stupid. That assumes the owner drives the EXACT same amount of miles in the new car. If I traded in a 15mpg old SUV for a brand new car that gets 25mpg I probably would be much more willing to take road trips. A "clunker" is probably the older of multiple vehicles in a household and likely was not the primary vehicle that accumulated the most mileage. Its the same thing with assumptions about more efficient cars saving gas while gas is cheap. If you make it cheaper for folks to drive they tend to drive more.

Maxwell

"83% of the trade-ins have fallen into the SUVs/light trucks category, while 60% of the new vehicles purchased have been cars"

The above adds up to 143%.

sheth

maxwell:

No, they are talking about trade ins vs purchases- two different things.

Matt C

"...as most liberals who ride in limousines don’t tend to buy a Focus as a second car."

The commentator who uses the term "limousine liberal" is not talking about the trade ins themselves, they are talking about the artificial market being created for new cars. If the consumer is given incentive to buy a new car if they trade in their old one, they will buy it. But these trade ins aren't real trade ins.
Normal trade ins are polished up by the dealer and resold, or the owner sells the old car themselves keeping used cars in the market place. With the government destroying these "clunckers" after they are traded in for the rebate, used cars are taken off the market. Therefore reducing the supply of used cars and srtificially increasing the price of the used car.
So the low income family who looks for the low cost "clunkers" doesn't have the as many cars to choose from and will pay more because of it.
The "limousine liberal" doesn't consider this side of the economic problem. The same liberals who are incharge of our branches of government, who didn't learn from the mistakes of any previous administrations.

Derrick G

Two points on Crown Vic: The '87 offered two engines. The 5.0 doesn't qualify; the 5.8 does. And yes, it makes sense because CAFE standards dropped back to '86 levels in '90 so it's not at all surprising Ford tuned the one engine, the 4.6, more for power in '97.

Going from a 15MPG car to a 25MPG one saves 267 gallons every 10,000 miles. It's hard to imagine anyone is going to drive so much more (6,675 miles) in a year that even a good portion of that is going to be offset.

Sorry, but I've yet seen convincing evidence these people would have just traded their current cars soon anyway. Most that I've seen or read about have been so far gone they'd have been headed for the scrap heap soon anyway because they were in such bad shape OR their owners had fully maintained them and fully intended to keep doing so for a long time to come, ie until it'd be so expensive to do so that the car would have no value for anyone.

Lastly, let's not forget the reason we have all these cars out there guzzling so much gas: CAFE standards were not increased and then dropped. Had they not been, then no Ford or anyone else wouldn't have been making cars in 1997 that got less mileage than their decade older counterpart.

mj

I still think it's odd that so many older cars were dropped because of having to go the the 4th decimal point or whatever crazy excuse the government is giving for changing 78 clunkers at the last minute.

Since they clearly don't care about the true clunkers, I hope the Senate does not approve anymore money for this program.

J

Just checked on MSN, they had an article saying that they got their sources from the government and the top seller is NOT the focus, but the Corolla.

spark

'Just checked on MSN, they had an article saying that they got their sources from the government and the top seller is NOT the focus, but the Corolla.'

As of 8/5/09, the Toyota Corolla led in sales over the Ford Focus. What MSN failed to report was that PRIOR TO THIS DATE, the Focus was the leader. You can Google this to see for yourself. I wish the damn media would get all of their facts and not just a few tidbits. Two days from now, Chevy's Cobalt could surpass both! Will they report that???

This program is devastating to charity car donation since the amount of the voucher is so much more than the amount of the tax deduction a person would receive by donating a car. In addition, the flood of formerly running cars (that could have donated to a needy family) at the scrap yard has driven the price of scrap metal down. As a result the proceeds from sale of donated non-running cars is down. Thanks to C4C, charities have been hit with a double whammy!

Derrick G

In trying to refresh my memory, I mis-read a Wikipedia entry. CAFE standards dropped in 1986, from 27.5 to 26. But of course the current CV/GM wasn't changed during that period. They went back up in 1990 and in order to meet them, in 1991 Ford moved production of the redesigned CV/GM to Canada, since with their foreign content levels the cars could be counted as Foreign and not hurt Ford's domestic passenger car numbers. The big cars would be offset by cars like the Festiva/Aspire. In '94, axle production was shifted from Mexico to the US to get the parts content back up in time for new labeling laws, thus making the cars domestic again. Their other cars had made enough gains that the Fox platform cars didn't hurt them enough that they wouldn't make CAFE.

I apologize for the error, but this still accounts for the '87 model's having better fuel economy than the '97.

Ninja555

1 billion $ for 80000 vehicles at $4500/trade-in does not add up. It actually adds up to $360 millions. What happened to the remaining $640 millions? and why do we have to dish up another 2 billions of our money for this math error?

Derrick G

Ninja555,

There's no math error. That's just what's been processed so far. And it's actually only $950M for rebates. Another $50M is for admin costs and part of the 950 is reserved just for big work trucks.

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