Tuesday, November 10, 2009

Most Popular C4C Deal: Old Pickups for New Ones

WASHINGTONThe most common deals under the government's $3 billion Cash for Clunkers program, aimed at putting more fuel-efficient cars on the road, replaced old Ford or Chevy pickups with new ones that got only marginally better gas mileage, according to analysis of new data by The Associated Press.

The single most common swap — which occurred more than 8,200 times — involved Ford F-150 pickup owners who took advantage of a government rebate to trade their old trucks for new Ford F-150s. They were 17 times more likely to buy a new F-150 than, say, a Toyota Prius. The fuel economy for the new trucks ranged from 15 mpg to 17 mpg based on engine size and other factors, an improvement of just 1 mpg to 3 mpg over the clunkers.

In at least 145 cases the government reported consumers traded old vehicles that got better than or the same mileage as the new vehicle they purchased. A driver in Michigan traded a 1987 Suburban that got 18 mpg for $3,500 toward a new Silverado pickup that got only 15 mpg. An Indianapolis driver traded a 1985 Mercedes 190 that got 27 mpg for $3,500 toward a new Volkswagen Rabbit that got only 24 mpg. In at least 15 deals in nine states, owners of large pickups cashed in old trucks for between $3,500 and $4,500 toward new Hummer H3 SUVs that got only 16 mpg.

HT: Felix Salmon

14 Comments:

At 11/10/2009 11:08 AM, Blogger juandos said...

"In at least 145 cases the government reported consumers traded old vehicles that got better than or the same mileage as the new vehicle they purchased. A driver in Michigan traded a 1987 Suburban that got 18 mpg for $3,500 toward a new Silverado pickup that got only 15 mpg"...

Makes me proud to be a taxpayer in the new and blossoming socialist utopia...

 
At 11/10/2009 12:13 PM, Blogger Colin said...

Not only was it economically destructive, it didn't benefit the environment either. Dumbest government program either? The competition is pretty stiff.

 
At 11/10/2009 12:27 PM, Blogger Steve said...

From Angry Bear: "Whoa now. It isn't until the 6th paragraph that readers are told the analysis involves more than 677,000 transactions, so the most common swap accounts for just 1.2 percent of cash-for-clunkers transactions. The seventh paragraph finally deigns to mention the average fuel economy statistics: 15.8 mpg for the traded clunkers, 24.9 mpg for the purchased vehicles — if you invert the mpgs, that's a 36.5% reduction in fuel consumption at the means."

There's lots of other interesting analysis of the data at that link, as well. Like, "The distribution is a bit bimodal, with peaks at 6 and 11 mpg improvements; the latter is the most common swap in mpg improvement terms." and "There's also a cautionary lesson in here investigating large databases."

 
At 11/10/2009 12:42 PM, Anonymous Benny Telling It Like It Is said...

Yeah, clunkers was bad, but was sunsetted, and cost only $3 billion.
Every year we send $8 billion to rural areas so they can have telphones, subsidized by other ratepayers.
It would be nice if the telephone clunkers got as much ink as the one-time car clunkers.
Actually, telephone clunkers should get much more ink.
But they won't--rural subisidies are never bashed by so-called free marketeers and libertarians.
I wonder why.

 
At 11/10/2009 12:55 PM, Anonymous Anonymous said...

Who cares about the gas mileage, really? This was just one more stupid exercise in liberal statism. Just, shut up, sit back and watch the left piss your children's futures away:

White House Lost $24,000 Per Vehicle in Cash For Clunkers But Will Make It Up In Bullshit Volume

The central issue, Anwyl said, "is how many of these sales would have occurred anyway. Apparently, the $24,000 figure caught many by surprise. It shouldn't have. The truth is that consumer incentive programs are always hugely expensive when calculated by incremental sales -- always in the tens of thousands of dollars."

Reason

Hope and Change

 
At 11/10/2009 2:12 PM, Blogger OA said...

If you look at the current estimate of incentives for October, GM is close to the cash for clunkers amount at $4,277. The industry average is about $2,500.

So clearly, the automakers are very capable of doing their own stimulus plan, as they've been doing for years. And GM, which we and the UAW own, is still doing cash for clunkers, but without taking the clunker.

There's no reason the automakers couldn't have increased their incentives by a couple thousand to move the cars themselves.

For $3 billion, they could have offered $100 per household to plant a tree, and 1/3 of the households in America could have taken advantage. It would have been less of a environmental farce than building a new car just to improve mileage 9 mpg.

http://www.edmunds.com/help/about/press/159666/article.html

 
At 11/10/2009 3:39 PM, Blogger juandos said...

"The seventh paragraph finally deigns to mention the average fuel economy statistics: 15.8 mpg for the traded clunkers, 24.9 mpg for the purchased vehicles — if you invert the mpgs, that's a 36.5% reduction in fuel consumption at the means"...

Hmmm, so what's your point?

Are you glad the federal government was involved in the loss of perfectly usable vehicles?

I know that Keynesian socialists over at the Angry Bear seem to revel in federal government interference in the market place regardless how often they get it wrong...

 
At 11/10/2009 3:48 PM, Blogger NoWhining said...

This comment has been removed by the author.

 
At 11/10/2009 3:54 PM, Blogger Richard Rider said...

Benny, where did you get the idea that libertarians don't care about rural subsidies? Do you think we oppose farm crop and animal subsidies, but support rural phone subsidies? What dark conspiracy do you envision here?

Truth is, few know about these phone subsidies. I'm not up to speed on this.

What specific taxes pay for this subsidy, and how is the money delivered as a subsidy? I'm not denying it's the case -- I suspect you are right.

I just would like some facts and links to work with. With proper information, I'll be GLAD to oppose phone subsidies. The idea that urban folks should subsidize rural life is nonsensical.

It's hard to oppose ALL subsidies at the same time, but harder still when one doesn't KNOW about the subsidy. Obviously there thousands of government subsidies in our society. This one seems big enough to beef about.

 
At 11/10/2009 7:11 PM, Anonymous Benny The Truth Man said...

Richard Rider--
Thanks for the question, and you make my point for me. In the federal budget are billions upon billions of dollars of cross-subsidies to help rurla areas, in addtion to the $60 billion or so in direct payment of subisides in the Department of Agriculture. But no one carps about these subsidies, as they go to rural areas--the R-Party base.

If you are an urban resident, you pay a few dollars a month on your phone bill so that some hicks get phone line, sometimes at a cost of $16k oper line, laid to their homes.

Source: Dow Jones
Author: Fawn Johnson
A subsidy fund designed to help phone carriers offer service in rural areas has mushroomed to an all-time high - 12.9% of interstate telecommunications revenue, up from 9.5% in the beginning of the year, the Federal Communications Commission announced Monday. That means that consumers' phone bills will increase slightly on July 1, the start of the third quarter. The FCC's announcement forecasts a change that carriers will need to make to customers' phone bills effective on that date. The subsidy fund is supported by a tax on the long-distance and regular phone-service bills paid by wireless, Internet and traditional phone customers. The amount is a separate line item dubbed "universal service," and it usually adds up to few dollars per month. AT&T estimates that the increased customer payments from the first quarter to the third quarter of 2009 amount to roughly half a billion dollars. Industry insiders say the universal-service-tax percentage is increasing because the number of traditional landline subscribers is falling dramatically as people switch to all wireless or Internet-based phone services, where contribution rates are lower. Fewer phone bills overall means a higher-percentage subsidy tax for each one. The universal-service fund pays out about $8 billion annually to phone companies that offer service in hard-to-reach areas."

So, while Dr. Perry properly bashs clunker cars over and over again, he never mentions the $8 billion we give to pinko-socialist rural phone subsidies.

And next year it will be more for rural parasites.

Clunkers was sunsetted, the only good part about that program.

Go the the Tax Foundation, and check out federal outlays and revenues by state and MSA. You will be astonished. We are running a welfare nation--for rural clingers-on and parasites.

 
At 11/10/2009 7:47 PM, Anonymous Anonymous said...

Don't get pulled into Benny's world. He rarely, if ever, has meaningful supporting evidence for his tiresome, repetitive nonsense. He is a pathetic lefty troll masquerading as a libertarian. He uses words like parasite to describe farmers and people in the armed services. Apparently there is no mirror in his mom's basement.

 
At 11/10/2009 8:05 PM, Blogger Richard Rider said...

Thanks, Benny. I WILL speak out against this subsidy -- perhaps in my next Rider Rant e-newsletter.

But I don't think I "proved your point." I'm quite vocal on farm subsidies for these millionaire welfare queens. I don't much care whose "base" they are. Indeed, I don't know of ANY libertarians who support or are neutral about such abhorrent giveaways.

BTW, both Democrat and Republican legislators support farm subsidies. It's always amusing to me to see urban Democrat representatives rigging crop and produce prices that up the bill for their own constituents while professing to be for the poor.

Of course, the politicos sell us out for the funding from farmers. Both parties. Most don't care in the least about farmers -- they care about the donations.

Indeed, farm subsidies are probably the dumbest subsidy of all. Often we pay twice -- once as taxpayers, and then again via higher prices at the grocery store. It's a particularly onerous subsidy as food price increases impact the poor more dramatically.

Here's two hard-hitting columns I wrote on milk price rigging, for instance:

http://riderrants.blogspot.com/2006/12/richard-rider-rant-121706-among-many.html

http://riderrants.blogspot.com/2006/12/congress-critters-hate-milk-drinkers.html

 
At 11/11/2009 1:01 AM, Anonymous Anonymous said...

Recall that the subsidies exist in every developed country, look at the EU and the farm subsidy regime there. (Push by France btw.) But if you look at the percentage of income spent on food it has fallen from 29% in 1929 to about 10% now.
To the cars issue note that the overall gain was in the neighborhood of 8 mpg over the fleet. 1.2% of the transactions is a small number and came about because of the special truck provisions targeted at the small business man. As I recall that means you aren't talking about 1/2 ton pickups but the big guys 3/4 ton, perhaps duallies etc.

 
At 11/11/2009 7:11 AM, Blogger juandos said...

"Recall that the subsidies exist in every developed country, look at the EU and the farm subsidy regime there. (Push by France btw.) But if you look at the percentage of income spent on food it has fallen from 29% in 1929 to about 10% now"...

Hmmm, so improved methods of farming, seed production, and equipment didn't cause the improvment in farming but somehow 'socialist' subsidies did?!?!

 

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