Edmunds: DOT's Cash for Clunkers Top Ten List Gets It Wrong
The autoblogosphere is abuzz with debate over the Department of Transportation’s (DOT) list of the top ten Cash for Clunking vehicles. To say the least. Edmunds [via CNN] reports that the DOT counted vehicles EPA-style, tallying differing powertrain or drive wheel combinations separately. For example, the DOT rates a Ford Escape with two wheel-drive as a distinct model from a Ford Escape with all wheel-drive. If you’re Edmunds (or any one else with an ounce of common sense), you combine all the model variants’ sales totals into one stat. And if you do that, you get a horse of a different color. The implication making the rounds: the DOT manipulated the data to hide the fact that a brace of SUVs and pickup trucks made the top ten; the Cash for Clunkers program is supposed to be about saving the environment. Yes, well, high margin pickup trucks offer the best chance of saving the domestics. So, let’s compare the DOT list (as of August 7) with Edumunds’ take . . .
"Now picture needing a cheap used car three years from now, maybe a station car or car to park in the city. What do you think the resale on that Caliber is going to be? If you don’t mind driving such a penalty box, or you previous car was a total POS, three years from now you will be able to buy a used Caliber for $2000." Nonsense. There is no well cared for, under 60k mile three year old used car or truck of any make or model which sells for anything even close to $2000. Look it up on Edmunds, AutoTrader or anywhere else. Three year old (2007 model) Calibers are selling for $9k or more right now. People seem to keep forgetting that the majority of new vehicle purchasers don't have a qualifying clunker to trade. Thus the value of new and lightly used vehicles isn't being hammered in the same way that across the board $4500 additional discounts/rebates would do. In fact, the increased demand is actually lifting the value of new and lightly used cars a bit.
To the idea that Cash For Clunkers is depriving charities of needed donations: "At Good News Garage in Burlington, they're as busy as ever fixing up donated vehicles to sell cheaply or to provide to low-income families. They worried Cash for Clunkers would mean fewer gifts. But when the non-profit learned most cars need to get 18 miles a gallon to qualify for the government incentive, most of those worries went away. Director Mike Muzzy says, "People in general don't want those cars. You and I don't want them, low-income families don't need them either. They need fuel-efficient, dependable, safe cars." The group has actually seen more donors come through who weren't eligible for Cash for Clunkers, but whose new car dealers suggested they call Good News Garage to get a tax write-off and give another family a boost. "They still want to do something good with the car and we're the outlet for that," says Muzzy." http://www.wcax.com/global/story.asp?s=10839991 So, put a fork in the C4C hurts charities canard. Speaking of which, do you know where many of the charity donation cars actually end up? The scrap yard is where. Many of the vehicles at the local pik-n-pull have window markings showing that they passed through various charity donation schemes.
For those talking smack about the lack of Japanese models on Edmund`s list, think long-term. I expect the Japanese to improve substantially in the coming months.
For anyone with interest in finding out the true picture of new vehilces purchased under CARS, see http://www.cars.gov/files/official-information/new-model-vehicles.pdf, info updated to Sep 9 based on info submitted for the rebate. The list by Edmunds is quite far away from NHTSA's data. Jeep Patriot and Dodge Caliber sold about 7,000 each, whereas the top seller, Corolla sold more than 29,000. The only omission from DOT's top ten list are two trucks: Ford F-150 and Chevy Silverado, which sold about 16,000 each under the program.