The voucher details below are now outdated. See the final June 18 Cash for Clunkers bill here.]
Here are the details on the May 5 compromise Cash for Clunkers. The press release is below. See the blog archive on the right for older and newer posts on Cash for Clunkers.
One plus: It has increasing rebates for larger MPG improvements.
One minus: The MPG jumps required for a large light-duty truck are quite small. Of course, GPM shows that even small MPG jumps can produce decent gas savings when they are applied to really inefficient trucks (e.g., 12 MPG to 15 MPG improvement saves almost 200 gallons of gas per 10,000 miles). But the structure would allow people to qualify for vouchers for 1 MPG increases (e.g., 15 MPG to 16 MPG, which saves only 40 gallons of gas per 10,000 miles) that yield small gas savings. The 15 to 16 MPG improvement would qualify for a $3,500 voucher.
Overall, the carbon payback--as discussed in an earlier post--will tend to be pretty long if people make the minimum MPG improvement in their category. From a greenhouse gas perspective one has to then hope that many people will go beyond the minimum.
The press release appears below. I've added my own "GPM" translations in brackets [gallons per 10,000 miles] and some examples in italics following each vehicle category.
May 5, 2009
Fact Sheet: Cash for Clunkers
Committee on Energy and Commerce
Consumers may trade in their old, gas-guzzling vehicles and receive vouchers worth up to $4,500 to pay for new, more fuel efficient cars and trucks. The program will be authorized for up to one year and provide for approximately one million new car or truck purchases. The agreement divides these new cars and trucks into four categories. Miles per gallon figures below refer to EPA "window sticker" values.
Passenger Cars: The old vehicle must get less than 18 mpg [555 GPM] . New passenger cars with mileage of at least 22 mpg [454 GPM] are eligible for vouchers. If the mileage of the new car is at least 4 mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new car is at least 10 mpg higher than the old vehicle, the voucher will be worth $4,500.
- Example: An MPG improvement from 16 MPG to 26 MPG reduces GPM from 625 to 384, which saves about 250 gallons of gas per 10,000 miles ($4,500 rebate)
- Example: An MPG improvement from 12 MPG to 22 MPG reduces GPM from 850 to 454, which saves about 400 gallons of gas ($4,500 rebate)
- Example: An MPG improvement from 14 MPG to 18 MPG reduces GPM from 714 to 555, which saves about 150 gallons of gas ($3,500 rebate)
Light-Duty Trucks: The old vehicle must get less than 18 mpg [555 GPM]. New light trucks or SUVs with mileage of at least 18 mpg are eligible for vouchers. If the mileage of the new truck or SUV is at least 2 mpg higher than the old truck [e.g., 20 MPG, which is 500 GPM], the voucher will be worth $3,500. If the mileage of the new truck or SUV is at least 5 mpg higher than the old truck [e.g., 23 MPG, which is 434 GPM], the voucher will be worth $4,500.
- Example: An MPG improvement from 16 MPG to 23 MPG reduces GPM from 625 to 434, which saves about 200 gallons of gas per 10,000 miles ($4,500 rebate)
- Example: An MPG improvement from 16 to 18 MPG reduces GPM from 625 to 555, which saves about 70 gallons of gas ($3,500 rebate)
Large Light-Duty Trucks: New large trucks (pick-up trucks and vans weighing between 6,000 and 8,500 pounds) with mileage of at least 15 mpg [666 GPM] are eligible for vouchers. If the mileage of the new truck is at least 1 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck is at least 2 mpg higher than the old truck, the voucher will be worth $4,500.
- The value of this one all depends on how bad the original vehicle is. Some GPM gains are small.
- Example: A 12 MPG to 15 MPG improvement reduces GPM from 850 to 666, and saves 180 gallons of gas ($4,500 rebate)
- Example: A 15 MPG to 16 MPG improvement reduces GPM from 666 to 625, and saves 40 gallons of gas ($3,500 rebate)
Work Trucks: Under the agreement, consumers can trade in a pre-2002 work truck (defined as a pick-up truck or cargo van weighing from 8,500-10,000 pounds) and receive a voucher worth $3,500 for a new work truck in the same or smaller weight class. There will be a finite number of these vouchers, based on this vehicle class’s market share. There are no EPA mileage measures for these trucks; however, because newer models are cleaner than older models, the age requirement ensures that the trade will improve environmental quality. Consumers can also “trade down,” receiving a $3,500 voucher for trading in an older work truck and purchasing a smaller light-duty truck weighing from 6,000 – 8,500 pounds.
Summary of Cash for Clunkers Agreement | ||||
Passenger Car | Light-Duty Truck | Large Light-Duty Truck (6,000 – 8,500 pounds) | Work Truck (8,500 – 10,000 pounds) | |
Minimum Fuel Economy for New Vehicle | 22 mpg (EPA combined) [454 GPM] | 18 mpg (EPA combined) [555 GPM] | 15 mpg (EPA combined) [666 GPM] | |
$3,500 Voucher | Mileage improvement of at least 4 mpg | Mileage improvement of at least 2 mpg | Mileage improvement of at least 1 mpg or trade-in of a Work Truck. | Trade-in must be at least pre-2002 |
$4,500 Voucher | Mileage improvement of at least 10 mpg | Mileage improvement of at least 5 mpg | Mileage improvement of at least 2 mpg |