Car Allowance Rebate System
[5] According to estimates of the Department of Transportation, the initial $1 billion appropriated for the system was exhausted by July 30, 2009, well before the anticipated end date of November 1, 2009, due to very high demand.
[6][7][9][10] Economist Alan Blinder helped popularize the idea of a scrappage program and the moniker "cash for clunkers" with his July 2008 op-ed piece in The New York Times.
Blinder argued that a cash-for-clunkers program would have a tripartite purpose of helping the environment, stimulating the economy, and reducing economic inequality.
[11] Jack Hidary of Smart Transportation and Bracken Hendricks of the Center for American Progress co-wrote a paper that was distributed to congressional offices in November 2008 describing the multiple benefits of a cash-for-clunkers program.
An alternative bill proposed by Dianne Feinstein (D-California), Susan Collins (R-Maine), and Chuck Schumer (D-New York) would have had a greater focus on increasing fuel economy.
Dissenting Senators raised a point of order under Rule 28,[15] prohibiting inserting provisions not previously passed by either house into conference reports.
The rule was overridden with 60 votes, despite some senators, including Sam Brownback, being uncomfortable with a last-minute change that called for the bill's funding to come from "deficit spending" rather than from the stimulus package that was initially agreed upon.
It was implemented by the National Highway Traffic Safety Administration (NHTSA), which had 30 days from the approval of the bill to post all program details online.
[3] According to USA Today, the U.S. Environmental Protection Agency (EPA) revised its mileage estimate list just before the start of the Car Allowance Rebate System program.
The changes made some of the following cars with specific engine configurations ineligible:[19] The EPA "gave no reason its ratings were inaccurate or why some went up", according to USA Today.
[21] "Consumers acting in good faith should not be penalized for undisclosed and last-minute changes made by the government", Kevin Smith, Edmunds.com editorial director, said in a statement.
Hazards associated with the intentional overheating and destruction of the engine include rupturing the radiator and hot water/steam, motor oil ejection, toxic fumes, and fire.
[28][29] The federal government used a few strategies to avoid a similar situation occurring with vehicles from the CARS program, where “clunkers” would be illegally retitled and resold to consumers.
[30] The CARS program required recyclers to report the Vehicle Identification Numbers (VINs) and the status of “clunker” to the NMVTIS.
The National Highway Traffic Safety Administration (NHTSA) submitted the VINs from the 700,000+ “clunkers” to CARFAX and other vehicle history providers.
[33][34] NHTSA and CARFAX also used the information to create a free “clunker check service,” which allowed a user to submit a VIN and determine immediately if it had been reported as a salvage vehicle.
Bailey Wood, legislative director of the National Auto Dealers Association, said, "Obviously the program has been an immense success in stimulating automotive sales".
[39] President Barack Obama signed the bill into law on August 7, and government officials expected that the additional funds will be exhausted by Labor Day.
Detroit's Big Three automakers said the demand peak that occurred in the final week of July left their inventories of unsold vehicles at the lowest levels in many years, but such windfall could hurt sales of some popular models in August.
[58] The researchers found "no evidence of an effect on employment, house prices, or household default rates in cities with higher exposure to the program.
[63] A 2009 study by researchers at the University of Michigan Transportation Research Institute evaluated the effects of the program on the average fuel economy considering a baseline without the existence of the program, since there was already a trend for buying vehicles with higher fuel economy due to the high gasoline prices of 2007 and 2008, and the economic crisis of 2008.
"[60] A 2013 Brookings Institution study found that "the CARS program led to a slight improvement in fuel economy and some reduction in carbon emissions.
[72] Jalopnik reviewed the lists published by the NHTSA and found numerous cars crushed under the program that had book values far exceeding the rebates offered by the government.
[74] Some exotic/collectible vehicles that were scrapped under the program included a Maserati Biturbo with 18,140 miles,[75] a GMC Syclone,[76] which was removed from scrappage in the program by a group of car enthusiasts [77] a GMC Typhoon,[77] an Isuzu Vehicross, a La Forza SUV,[74] a TVR 280i,[74] and various Ford Mustang, Ford Taurus SHO, Chevrolet Camaro, and Chevrolet Corvette models, among other cars.
[3][4] After the announcement, several dealers decided to stop participating in the program after Saturday, August 22, due to the difficulties in processing their reimbursements through the government web site where the paperwork must be filed.
