Three-billion federal dollars were spent on last year’s Cash for Clunkers program and there’s still been no official report on its aftermath. Iowa Senator Chuck Grassley is asking the U.S. Secretary of Transportation for a final financial report on the program, which aimed to stimulate the economy while encouraging consumers to trade in gas guzzlers for more fuel-efficient new models.
“The Cash for Clunkers program was set up very quickly and there hasn’t been an accounting of the administrative costs of the program,” Grassley says. “There also hasn’t been publicly available information about how contractors were picked to process the thousands of transactions that the program generated.”
The popular program, officially called the Car Allowance Rebate System or CARS, began in early July and ended in late August, exhausting its funding far sooner than the scheduled end in November. The U.S. D.O.T. has reported the program resulted in nearly 700,000 dealer transactions, for a total of $2.8 billion in rebates.
“My concern is with waste, fraud and abuse that may’ve resulted from the vulnerabilities that you might have when you have such a quick start of a program,” Grassley says. “It seems taxpayers deserve a full report on the money that was spent on this program.” There was discussion last fall of a similar consumer rebate program that would prompt Americans to trade in their old appliances for new, more energy efficient models.
That “dollars for dishwashers” program has not appeared. Grassley says the government needs to learn from Cash for Clunkers before launching anything else. Grassley says, “In the event that a similar program might be set up sometime, maybe even for a different purpose, we need to know that this program was run in the most cost-effective manner possible and without fraud or misuse of money.”
A non-government report published after Cash for Clunkers concluded found the program cost some $2,000 per vehicle traded, meaning, costs outweighed benefits by $1.4 billion. Another report found many dealers didn’t strictly follow guidelines on fuel efficiency and the average overall increase was less than one mile per gallon based on all of the vehicles purchased.