Ford, Toyota & Honda profit most from cash for clunkers, ending Monday

The cash for clunkers program is ending a productive run on Monday August 24, at 8pm. If you own a vehicle that qualifies and have car fever it’s time to act fast. Cash for clunkers has been a sales catalyst for a beleaguered automotive industry in the United States, giving car owners a compelling reason to trade in: a bargain deal.

While the program has logged over 457,000 dealer transactions, foreign companies were profiting most.  That means a large chunk of the $1.9 billion in rebates went to companies with varying degrees of presence in the country’s economy. The Ford Focus topped the list of vehicles purchased, but was immediately followed by the Toyota Corolla, Honda Civic, Toyota Prius and Toyota Camry.

Despite their overall lower position on the cash for clunkers top sales list, GM and Ford are ramping up production to meet the new surge in demand. It’s a refreshing thing to see automakers calling back laid off workers to run manufacturing plants that have been at idling speed for months.

United States Transporation Secretary Ray LaHood says:

This program has been a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work. At the same time, we’ve been able to take old, polluting cars off the road and help consumers purchase fuel efficient vehicles.

That sounds like a very good thing, and hopefully we’ll all be encountering fewer vehicles on the road that are belching out noxious smoke on the road. But from green perspective the cash for clunkers program is an expensive way to cut carbon emissions.

The costs vary depending on how long the clunker would have stayed on the road, according to estimates calculated by the University of California-Davis. Even if drivers had continued using the clunkers for 3 years, the cost per ton of carbon is $556. Compare that with an estimated $28 per ton cost under the Waxman-Markey cap and trade program and it’s evident that the cash for clunkers program was primarily an economic initiative.