“Cash for Clunkers” or “Rebate for the Rich”

The government program to reimburse $3,500-$4,500 for junking a fuel-inefficient car when purchasing a new, fuel-effecient car sounds good in theory. But the program is simply subsidizing the replacement of luxury cars with newer luxury cars. Once the results are in, expect to see more newer cars have been junked than actual clunkers!

2008 Mercedes S500 (Sticker price: $113,394)

Qualifies for Government Subsidy

Qualifies for $3,500 Government Rebate

Fuel Type Premium
Engine Size 5.5 L
Cylinders 12
Transmission Automatic 5-spd
Drive Rear-Wheel Drive
Options TurboCharger, EMS 2MODE CLKUP
Vehicle Category Passenger Car
Combined MPG 13
Qualifies for CARS? Yes. You may qualify for the CARS program.

1990 Dodge Colt Vista Wagon

1990 Dodge Colt Vista Wagon

Does Not Qualify for $3,500 rebate

Fuel Type Regular
Engine Size 2L
Cylinders 4
Transmission Automatic 3-spd
Drive Front-Wheel Drive
Options (FFS)
Vehicle Category Passenger Car
Combined MPG 20
Qualifies for CARS? No. Your trade-in must have a Combined MPG rating of 18 MPG or less to qualify.

Obviously no one would trade in a 2008 Mercedes for $3,500 – but a good majority of the “clunkers” are going to be older luxury cars, rather than the cheap cars that burn up a liter of oil with each tank of gas.


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2 responses to ““Cash for Clunkers” or “Rebate for the Rich”

  1. And anyway, if the goal is to reduce pollution, why do I have to buy a car to get the cash? Why can’t I sell my clunker to the government for $3500 and buy a bicycle or an Amtrak season ticket? Wouldn’t that be more fuel efficient all together? Oh, right, it’s really a subsidy for the auto industry, not a green initiative at all!

  2. This is part of the stimulus package. Designed to help the ailing auto industry. Not to help reduce pollution.

    Just that most of the money will be going to foreign auto makers. Many new car buyers will be afraid to buy from a U.S. auto maker in bankruptcy.

    Like all government programs, it may hurt those it’s supposed to help by giving foreign auto companies more of the U.S. market.

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