$1 Billion in Government Giveaways

C.A.R.S. is the new program that provides incentives for consumers to trade in their old low MPG vehicles for new higher MPG vehicles. The idea is two-fold. First, the auto industry is suffering in the current economic crisis, and consumers need incentives to shop for new cars. Second, it is environmentally friendly to drive vehicles that use less fuel. Let us examine both of these theses, and then look at how it affects the "common man".

According to The Oregonian, several local dealerships claim to be doing quite well without the rebates, although the C.A.R.S. program has brought in a lot of business in the last few days and probably will continue to do so for the next few months. The fact is that our society in the U.S. is geared toward automobiles. One for the husband, one for the wife, and one for each child of driving age is what the various media throws at us constantly. We will not even touch the "soccer mom" sub-culture at this time.

The real problem with the automobile industry isn't that consumers are not buying vehicles, it's that the manufacturers make too many similar vehicles and expect the consumer to buy, or lease, a new vehicle every year or two. The supply out-stripped demand, and when the economy turned sour, consumers decided to hold onto their vehicles longer than they might have under normal economic conditions. So, yes, large rebates are going to help.

My favorite joke recently has been, "How many Oregonians does it take to screw in a light bulb?" The answer: 100, 1 to screw in the bulb and 99 to measure the environmental impact. Yes, we all need to do our part to help the environment. I caught myself feeling bad because we left our environmentally-friendly, reusable shopping bags at home when we did the grocery shopping last night. I probably shouldn't mention that we then opted for plastic bags that we generally use to throw away disposable diapers.

Anyway, our society makes it far too easy to be environmentally unfriendly and then gives us small ways to feel better about it. For example, the reusable grocery bags, or that our children are obese from drinking too much soda and eating too many pre-packaged meals, but for only pennies a day we can feed starving children in a third-world country. Getting back to the second thesis, driving high MPG cars is better for the environment, but the impact probably isn't is grand as it might sound unless we eliminate the use of fossil fuels and make more of the vehicles recyclable.

What does this have to do with you and me? To start with, unless you bought your gas hog during the SUV frenzy before gas prices got up to $4 a gallon, you probably do not qualify for the rebate. Our 2000 Saturn SL, with 175k miles on it, does not qualify, because when it was manufactured it claimed to have a combined MPG of 27. This does not take into consideration that the MPG calculations were still flawed at that time, or that MPG tends to decrease over time and mileage. Your vehicle has to get less than 18 MPG to qualify. True that the Saturn probably still gets over 20 MPG, but that doesn't help me help the auto industry.

Our 2005 Kia Sedona qualifies for the rebate at a miserable 17 MPG. However, we need a minivan to transport our family, and we still owe nearly 3 years of payments on it. In addition, after searching the website, I could not find any 2010 minivans that would give more than a 3 MPG improvement, and most of them offered less than a 2 MPG improvement. To qualify for the rebate, the improvement must be at least 2 MPG. Is upgrading my fairly new family minivan for a brand new family minivan that gets the same MPG or only slightly better really going to help the environment. That is doubtful, but it would help the banks and the auto industry...and it will make me feel better about using slightly less fuel to get to the grocery store.

If I were Emperor, fuel-efficiency would be a dying term because auto makers would be mandated to provide more options for alternative fuels with each new model year. Also, any rebates would not be based solely on the MPG of the old car, but on the total improvement in getting that car replaced.

What do you think? Are you going to explore whether you qualify for the rebate? Do you think you might buy a new car if you do qualify? Were you considering upgrading to a more environmentally friendly vehicle even without the rebate? Let us know your opinion in the comments.