NCPA - National Center for Policy Analysis


August 14, 2009

Transportation Secretary Ray LaHood has cited the Obama administration's best-seller list of mostly smaller, fuel-saving cars like the Ford Focus to describe the success of the "Cash for Clunkers" rebate program.  But what LaHood doesn't mention is that some trucks and sport-utility vehicles that get less than 20 miles per gallon are being purchased with the new government subsidies, says the Las Vegas Sun.

And since the program offers rebates of up to $4,500 and isn't limited to the best gas savers on the market, big car salesmen and luxury car dealerships are seeing their sales increase, says the Sun.

Take the Williamson Cadillac-Hummer dealership in Miami:

  • It has sold three 2009 Cadillac SRXs -- the six-cylinder engine model -- through the clunkers program, and is finishing paperwork on two more.
  • The dealership hopes to sell the remaining 14 Cadillacs, along with Hummer's H3Ts.
  • Both vehicles get about 18 mpg, considerably less than the 25.3 mpg average that LaHood has attributed to new cars purchased under the clunker program.


  • Even though people can buy Honda Civics (29 mpg) and Toyota Priuses (50 mpg) with the rebates, they are opting to buy the 2009 Lexus RX 350 or 2009 Lincoln MKX, both pricey five-passenger utility vehicles that get about 19 mpg.
  • Even a high-end 2009 BMW X3 crossover utility vehicle, priced at just under $40,000, counts as a gas saver eligible under the government program.
  • Since the passage of the program, dealers have submitted requests for rebates on 292,447 vehicles sold, at a cost of about $1.2 billion to the government.

But it shouldn't come as a surprise that less fuel-efficient vehicles are being purchased with clunker rebates as Congress agreed to loosen fuel efficiency requirements under the program when it passed the initial legislation earlier this year, says the Sun.

Source: Editorial, "Spin Meter: $3 billion buys not-so-green vehicles," Las Vegas Sun, August 13, 2009.


Browse more articles on Tax and Spending Issues