Yes, Taxpayers Paid to Trade Clunkers for Clunkers

In 2009, the Car Allowance Rebate System—widely known as Cash for Clunkers—offered a federal subsidy to consumers who traded qualifying older, lower-mileage vehicles for new models. An earlier Washington Independent report had questioned whether the eligibility rules were strict enough to deliver the environmental gains promoted by the program’s supporters.

The concern was straightforward: some pickup and SUV owners could receive thousands of dollars toward a newer version of a similar large vehicle, even where the replacement improved fuel economy by only a few miles per gallon. Final transaction data later confirmed that such trades occurred.

After Congress added $2 billion to the program and the initiative ended, the Department of Transportation released details covering approximately 677,000 transactions. An Associated Press analysis found that the most common model-to-model exchange was an older Ford F-150 pickup for a new Ford F-150.

According to the analysis, participating F-150 owners were much more likely to choose another F-150 than a high-efficiency hybrid. Depending on configuration, the new pickups were rated at roughly 15 to 17 miles per gallon—about one to three miles per gallon above the traded vehicles.

The broader record still indicated a fuel-economy improvement. The average trade-in was rated at 15.8 miles per gallon, while replacement vehicles averaged 24.9 miles per gallon. Those figures suggest that the program produced efficiency gains overall, while also illustrating how its minimum standards permitted some comparatively small improvements.

The policy debate therefore centered not only on whether the program improved average mileage, but also on whether tighter eligibility thresholds could have produced greater benefits for the same public cost. An alternative proposal associated with Sens. Dianne Feinstein and Susan Collins sought stronger mileage requirements. Both senators ultimately voted for the additional program funding.