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Sunday, January 6, 2013

Cash for Clunkers, bad policy



This recent article claims the government's Cash for Clunkers program actually hurt the environment more than it helped.

Because of the requirements of the program, many cars were shredded. The process generated a fair amount of landfill waste. It also consumed a significant amount of energy. The article also pointed out that the program created a shortage of good used cars, inflating the price of those remaining.

What the article did not mention is that actually making a car uses more energy than it will consume in its lifetime. It would have made more sense to keep old cars on the road, encourage proper maintenance, good driving habits, and fewer miles driven. Of course, that would not have given a boost to the car industry, but why should the government be promoting that industry in the first place?

During the 80s gas took a significant jump in price. Small cars were going for a premium. Back then I bought an old Chevy with a 8 cylinder engine. I called it my economy car. The car got about 18 miles to the gallon. However, I only paid $50 for the car. It took another $40 to get it road legal. I drove it for 2 years. The only other repair was a water pump replacement, which I did myself. With no car payments, I could afford a lot of gas.

It made me sad to see plenty of perfectly good cars scrapped for no good reason. Now we know it didn't even benefit the environment.

-Sixbears

19 comments:

  1. Typical outcome when the government "helps" anybody or anything.

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    Replies
    1. Japanese auto makers did just fine.

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  2. The rule of thumb I've heard is that for buildings and vehicles, the energy it takes to make them is roughly equivalent to the energy they use in their entire lifetime. (Not electronics though, they take about six times as much energy to make as they use in their lifetime.)

    One interesting anecdote that comes out of this analysis is that a Hummer works out better in lifetime energy per mile driven than a Prius -- actually, 3 Priuses, because the Hummer lasts three times longer. Of course other cars do much better than either.

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    1. That energy investment in older cars was just thrown away.

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  3. The Downside of the cash for clunkers, supposes that the clunkers driver/owner can finance a new car...The only cash for my clunker was realized when I towed it in to the scrap yard and recycled it myself. I haven't replaced it yet. I have never financed anything in my life. Any debt I owed anyone disappeared this last dec 31st. The statute of limitations expired. It's a safe bet that the IRS is pissed. I'm a mule stubborn individual. About the only thing I noticed after cash for clunkers was done, was a dearth of affordable used cars. It put the screws to the few of us who will only buy used cars. But then I again, I only offer a few more bucks than the scrap yard, not the 1K everyone wants. I watched one guy scrap a jeep for 350 bucks because I only offered 500 for it. Many will take the loss like that, than take my money. My offer has been standing now for 9 months...However I might get lucky when the holiday bills come due.

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    1. A car payment would make the difference between living pretty good and suffering. Rather drive a clunker -or find a way of doing without.

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  4. My son recently asked me if it wasn't time for me to buy a new car (it's 10 years old). My comment? "It's paid for." I get it serviced on schedule, it has over 200,000 miles and still runs like a dream. I'll keep it until it just won't run anymore or falls apart.

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    1. That's the way to do it. Didn't you know you were supposed to have bought at least 3 cars by now? How are those banks going to make any intrest money off you?

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  5. Using the same statistics and logic (or illogic, depending on your perspective), the electric car isn't a good investment. It still takes resources to produce the energy. It is more costly up front. And, at some point disposal will be the same problem, especially the batteries. Are there any better alternatives? Just wondering.

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    1. I'm wondering my own self. As for electric cars, like everything else, it depends. There are a lot of different technologies out there.

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    2. Yeah, the better alternative is called the velomobile. They're built with bicycle technology plus shells, usually fiberglass, and frequently with electric motors. See http://www.lowtechmagazine.com/2012/10/electric-velomobiles.html

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  6. Cash for clunkers was as much for the banks as for the auto co.The trend in 08 was just used cars was selling for cash.This program force the foolish to buy new and with interst.When i buy a car i do the math how many miles will it be till im below 10 cents a mile and will it last till it is 5 cents a mile cost

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    Replies
    1. Yes, the banks did quite well.

      More people should do the math. They might be in for some surprises.

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  7. Nope, it was never meant to benefit the environment. Just the bankers, and, oh, maybe Government Motors. Hmmmm.... Follow the money, it always leads to the truth.

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    Replies
    1. It can be hard to follow the money. It moves away from me so fast!

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  8. The only good think about 'Cash for Clunkers' is it got a lot of Obama Bumper Stickers off the road.

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  9. We could have used some of those incentives to buy a new car at the time. Alas, my "clunker" was too fuel efficient to begin with.

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