Saturday, June 20, 2009

The Final Cash for Clunkers Bill, June 2009

The Final Bill

A final bill has passed both houses. Here is the official government site for details (from the NHTSA):

[Updated: Here's an analysis of how the program is doing as of August 6.]

If you are considering trading in a car, carefully examine the gas cost savings as well as the voucher. Gas savings are better seen using "Gallons per Hundred Miles" (GPHM) than using MPG. In the table below, note that a 14 to 25 MPG trade in saves 3 gallons of gas every 100 miles, or 300 gallons every 10,000 miles. That's about $3,500 in savings in just 40,000 miles of driving. This post gives you multiple tools for calculating the gas savings of a trade in. The value of the gas savings can be as large as the value of the voucher.

10 10
11 9
12.5 8
14 7
16.5 6
20 5
25 4
33 3
50 2
100 1

Thoughts on the Final Bill

The final bill has decent MPG improvements for cars (4 MPG and 10 MPG)--enough to "payback" the carbon released in producing the car--but not for large light duty trucks. We believe a tiered system based on GPM and requiring larger gas savings would have been better for reducing CO2 emissions.

However, if people go beyond the minimum MPG improvements when they make a trade in, that will make the program effective in reducing CO2 emissions.

25 Bold Ideas in Popular Mechanics July 2009 (the EPA waits.....)

G/100M is one of the 25 Bold Ideas.

Here is a post explaining why PM will use "GPHM" as a standard part of their car reviews in the future.

The idea has been adopted by USA Today but only partially by the EPA. The site (run by the EPA and DOE) offers g/100m... if you know to look for it. Unfortunately, most of the site dances around gas consumption and never lands on it squarely. For example, the site has a good gas payback calculator here:

But, the calculator doesn't tell you your gas consumption.

You have the option to pick gallons per 100 miles when selecting and comparing specific cars here: ....if you know where to look (it moves around across different pages). However, nothing on the site explains why you'd want to switch to g/100m.

The site does provide one GPM measure with every car description: Gallons per 25 miles. But this is a poor measure because all cars look pretty much the same on the scale. Larger scales make differences clearer (see Burson, Larrick, & Lynch, 2009, Psychological Science). We encourage the EPA and DOE to make g/100m more available to car buyers.