"Cash for Clunkers" an Instant Edsel

An editor at The Pueblo Chieftain recently decided to give the federal "Cash for Clunkers" program a test drive. He discovered, not surprisingly, that it's a lemon.

It sounds great on paper, of course. Every plan Washington draws up does. Americans driving clunkers can get a $4,500 check from Uncle Sam when they dump their old gas hog for a ride that's more environmentally correct. But when the rubber meets the road, that's where the blowout occurs, as the Chieftain's Juan Espinosa discovered.

Here's the piece:

Cash for Clunkers an enticing notion

By JUAN ESPINOSA
THE PUEBLO CHIEFTAIN

Finally, a government program for those of us who have never bought a new car - the Cash for Clunkers program. Sounds like a dream come true. Trade in our old gas-guzzling clunkers for more efficient new vehicles and the government kicks in between $3,500 and $4,500 into the deal.

The program has lots of appeal. It gets some gas hogs off the road and gives the ailing auto industry a boost. I'm pretty sure my 1989 Ford Bronco qualifies. It’s less than 25 years old. It had an estimated rating of 18 mpg, or less, when it was new and has been licensed and insured for the past year.

Under the Cash for Clunkers program, if I bought a new vehicle rated to get 10 mpg better than the Bronco, I would get the maximum incentive cash from the federal government as a trade-in toward my new ride. I paid only $1,700 for the Bronco two years ago in the first place. I’ve put another $300 or $400 in it since, so a $4,500 cash trade-in would be more than double what I have invested in the Bronco.

With $4,500 practically burning a hole in my pocket, I went surfing on the ’net for a replacement vehicle. To replace the size, and 4-wheel capabilities of my Bronco, and achieve the required mpg increase, I would have to spend about $30,000, leaving me with a balance of over $25,000 after my government bonus. I would end up with a monthly car payment of around $450 for 60 months.

But think about all the money I would save on gas, right? I drive the Bronco less than 10,000 miles a year and probably average around 14 mpg. That means I buy about 714 gallons of gas a year, which at the current rate of about $2.35 a gallon, equals $1,678 per year.

If my new vehicle got 28 mpg (probably unrealistic), it could cut my gas bill in half, to $839 a year, leaving me another $839 in savings to apply on my car payments. Another way to look at it is I would be spending about $4,500 a year to save $839 in gas. Talk about robbing Pedro to pay Pablo.

My paid-for Bronco with its 350-cubic-inch V-8 engine, 4-wheel drive, removable hardtop, surround-sound system and equally great sounding dual exhaust is starting to look better than ever. Throw in the fact that it is the kind of muscle ride with which my generation has had a lifelong love affair and it seems like a sacrilege to have it melted down to make cars that look like tennis shoes.

The truth is, I own three clunkers, a 1998 Chevy S-10 I’ve paid for at least three times, a 1995 Chevy pickup short-bed, V-6, and the Bronco. Both Chevys get better mileage than the Bronco and as a result are driven more often. Even with the additional cost of license plates, insurance and maintenance, my three paid-for clunkers cost less than one new vehicle would, even with the Cash for Clunker program.

No, thanks. I think I’ll have to pass up the Cash for Clunkers program and just drive the Bronco fewer miles. Maybe I should just retire it except for those rare visits to a remote mountain top or off-road adventure. It could last another 25 years and even increase in value as more and more clunkers become extinct.

Juan Espinosa is The Chieftain night city editor. He may be reached by calling 404-3756, or by e-mail at juane@chieftain.com .

Espinosa's experience isn't unique. Many Americans apparently are having similar frustrations with the $1 billion, just-off-the-assembly line initiative, which officially launches July 24. Reports the St. Petersburg Times:

"What appears to be a well-meaning program aimed at improving the environment and boosting the auto industry is causing more than a little confusion and frustration among those trying to use it — car dealers and customers alike.

Many who think they should qualify are finding they don't. And for those who do qualify? Good luck finding a dealer that will let you drive your new car off the lot before the program's rules are finalized.

The bill, officially named Consumer Assistance to Recycle and Save (CARS) Act of 2009, was signed by President Barack Obama for a July 1 launch. But the details of the $1 billion program, which runs through November or until funds run out, won't be final until July 24.

Because of this, many car dealers are skittish about cutting buyers the $3,500 or $4,500 break, fearing the rules might change and they'll lose that money.

"Frankly, we're somewhat confused," said Frank Scarritt of Scarritt Lincoln-Mercury in Seminole. "Why would they come out with a program when it doesn't have all the rules in place?"

Why ask "why"?

Isn't it enough to explain that it's a federal program?