'Cash for Clunkers' Is a Car Wreck

By Drew Nelles,  Newser Staff
Posted Jul 18, 2009 5:20 PM CDT
The first family to purchase a new car with Cash For Clunkers at Paragon Honda in Woodside, New York.   (PRNewsFoto/Paragon Auto Group)
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(Newser) – The Cash for Clunkers program should never have left the lot, Michelle Singletary writes in the Washington Post. The premise is fine: Give people a financial incentive to trade in old gas guzzlers for new gas sippers. It's the details that smell like a lemon. "The law does not apply to the purchase of used cars, encourages people to take on more debt, and doesn't require the new cars to get substantially better gas mileage."

In short, this $1 billion program is just “welfare for the limping auto industry,” Singletary argues. The new fuel-efficiency standards are as low as 15 mpg for some trucks, and the program allows leasing—as long as the lease period is 5 years or more. “Oh, goody: Our federal government has now given people an incentive to stay in a cycle of car debt,” Singletary writes. For those still game, click on the link for her tips on navigating the system.