CITYWIDE — In just a few short weeks, customers at Santa Monica car dealerships have traded in hundreds of clunkers for sleeker, more fuel-efficient cars — but the lifespan of the “cash for clunkers” program, also know as the Car Allowance Rebate System, and its actual energy savings are still up for debate.
“It’s been absolutely crazy,” said Billy Rinker, general sales manager for Toyota Santa Monica. “No one was expecting it to be as big as it is.”
Rinker said the dealership made 133 clunker deals in the last week of July alone, mostly on Prius and Corolla models. The program began on July 1, but most dealerships waited for official registration on July 24 to begin sales.
Over at Honda of Santa Monica, sales are also up — by about 20 percent, general manager Don Marino said. Honda made six deals on Wednesday. Nationwide, Americans have traded in more than 250,000 clunkers.
Pacific Palisades resident Ben Piazza is one of them. He purchased a new CRV from Honda Santa Monica on Tuesday, trading in his 1987 Peugeot for a five mile-per-gallon improvement.
“I loved my old car, but I knew I’d have to replace it eventually,” he said. “This particular incentive was very substantial.”
Piazza did experience a slight hitch. He had wanted to trade in his older car — with almost twice as many miles on it — but because his daughter had taken over the insurance six months ago the car was ineligible.
Another fine print item worked out in his favor, though. Because Piazza traded a sedan for a truck, he qualified for the full $4,500 rebate.
Initial sales were quickly threatened by an evaporation of funding — the original $1 billion allotment from Congress was expected to last through November but barely made it through the end of the month.
When it was announced that the program might end this Thursday at midnight, Rinker and other employees stayed at the dealership until 5 a.m. Part of what took so long was paperwork — between 10 and 15 documents have to be uploaded to the government’s Web site for each deal.
“There has been some uncertainty about when and if we’ll all get paid,” he said. Eligible customers — requirements including owning and insuring the vehicle under your name for at least a year — can receive between $3,500 and $4,500, depending on the difference in miles per gallon between their old and new vehicles.
Worries about money should be put to rest — at least for now. A $2 billion extension in funding — enough to keep the program active through September — has passed in the House and as of Wednesday afternoon is expected to pass in the Senate by the end of this week.
The program may not be as good for the environment as it appears, however.
“Environmentally, what you would hope for is that people are turning in real gas guzzlers like SUVs and purchasing true gas sippers,” said Santa Monica resident Zan Dubin Scott, a spokesperson for Plug-In America. “We have to weigh the amount of pollution created in the production of these big cars and the result of trashing them after a short period of time against the amount of pollution driving smaller, more fuel-efficient cars cuts back on.”
Kirsten Peters, a geology faculty member at Washington State University, chose to keep her clunker, a 1987 pick-up which she uses to haul wood or help friends move their belongings. She doesn’t spend much time comparing herself to Prius drivers.
“It’s a different kind of use,” she said. “I don’t think there’s any need for us to look down on each other.”
Peters is not so tolerant of specious energy savings.
“One lesson that we really don’t want to understand in this country is that in order to save energy we need to consume less,” she said. “Buying a new car is not a decision without environmental consequences.
“There is relatively modest energy savings, because the turned-in car has to be crushed or recycled as scrap metal,” she continued. “A lot of energy will go into that process. Customers get a new car out of the deal, but a lot of energy went into processing the steel and forging the car itself. You have to drive the car for many years before you break even on energy savings.”
Peters puts less than 3,000 miles on her truck each year. She’s roughly done the calculations — if she trades in her clunker, it will take her 40 years to break even.
“That’s a long time,” she said. “I hope to be dead in 40 years.”
Rinker echoed the critique of Peters and Dubin Scott — customers need only upgrade by a few mpg to receive the base rebate of $3,500. The majority of the cars being traded in at the dealership are SUVs getting less than 18 mpg, however, so even with the energy wasted by scrapping these cars, he’s confident that the program is environmentally friendly as a whole.
“We disable the engines and drain all the oil out of the cars,” he said. “I’m sure they have a good plan to recycle these clunkers.”
The program’s economic benefits are more of a sure thing.
“It’s the best stimulus I’ve ever seen,” Rinker said. “For a stimulus package that was supposed to last three months to be done in a week — it certainly stimulated something.”
“Of all the billions spent so far, this is the most tangible results we’ve seen,” Marino added, citing boosts to manufacturing and sales tax income in addition to profit for car dealerships.
“Customers recognize this as a great deal,” he said. “It gives them a reason to go out and spend money.”
Peters argued that there may also be higher than anticipated consumer costs, such as financing and insuring a brand-new vehicle.
Dubin Scott pointed to a subtler, though still important, effect of the program.
“The message alone is beneficial,” she said. “Get rid of gas guzzlers and buy more fuel-efficient cars.”
For more information about the program, visit www.cars.gov.