Tuesday, September 22, 2009

How Much Did Cash-For-Clunkers Improve Fuel Efficiency? Quite A Lot!

The University of Michigan Transportation Research Institute conducted research supported by Sustainable Worldwide Transportation to estimate the vehicle fuel economy improvement from the 2009 vehicle scrappage program, CARS, popularly known as “Cash-for-Clunkers” program. (http://deepblue.lib.umich.edu/bitstream/2027.42/64025/1/102323.pdf)

About 690,000 vehicles were purchased (and traded in) under the CARS program and this was part of the total of about 2,260,000 vehicles sold in July and August 2009. (http://www.cars.gov) "Generally, the trade-in vehicles must have had fuel economy of 18 mpg or less and be less than 25 years old. The rebate was either $3,500 or $4,500, depending on the difference between the fuel economy of the new and the trade-in vehicles."

They found that the program improved the average fuel economy of all vehicles purchased by 0.6 mpg in July 2009 and 0.7 mpg in August 2009. The program's outcome is plotted below:

The government's conclusion is similar and is posted at the end. Basic statistics of the CARS program are copied below.

Top 10 New Vehicles Purchased
1. Toyota Corolla
2. Honda Civic
3. Toyota Camry
4. Ford Focus FWD
5. Hyundai Elantra
6. Nissan Versa
7. Toyota Prius
8. Honda Accord
9. Honda Fit
10. Ford Escape FWD

New Vehicles Manufacturers
Toyota 19.4%
General Motors 17.6%
Ford 14.4%
Honda 13.0%
Nissan 8.7%
Hyundai 7.2%
Chrysler 6.6%
Kia 4.3%
Subaru 2.5%
Mazda 2.4%
Volkswagen 2.0%
Suzuki 0.6%
Mitsubishi 0.5%
MINI 0.4%
Smart 0.2%
Volvo 0.1%
All Other <0.1%

Top 10 Traded-in Vehicles
1.Ford Explorer 4WD
2.Ford F150 Pickup 2WD
3.Jeep Grand Cherokee 4WD
4.Ford Explorer 2WD
5.Dodge Caravan/Grand Caravan 2WD
6.Jeep Cherokee 4WD
7.Chevrolet Blazer 4WD
8.Chevrolet C1500 Pickup 2WD
9.Ford F150 Pickup 4WD
10.Ford Windstar FWD Van

Average Fuel Economy
New vehicles Mileage: 24.9 MPG
Trade-in Mileage: 15.8 MPG
Overall increase: 9.2 MPG

84% of trade-ins under the program are trucks, and 59% of new vehicles purchased are cars. The fuel efficiency improved by 58% for 690,000 in the U.S fleet of private cars.