Clunker Consumers Get a 69% MPG Improvement and an Average Savings of $750 in Gas Bills per Year
SEE ALSO: Cash for Clunkers Consumer GuideNEW YORK, July 28 -- Early statistics from automotive dealers on the CARS Program, commonly known as Cash for Clunkers, show clunker consumers getting a 69% mile-per-gallon (mpg) improvement which saves them an average of $750 in gas bills a year by replacing their clunker with a new fuel efficient vehicle. "After gas and repair savings many consumers will spend less to drive a new car then they were spending to keep their clunker on the road," says Sharon O'Connell, the director of www.CashForClunkersInformation.org. "If consumers miss their old cruiser they can buy another one with the $750 they save in gas." The organization interviewed some of the largest dealers in the country who have been selling vehicles to clunker consumers for almost a month and their findings were released today in their "clunker report."
According to www.CashForClunkersInformation.org, 79% of clunkers being traded in so far are SUVs, trucks and vans with over 100,000 miles and most are being replaced with new passenger vehicles. The average age of a trade-in model is almost 13 years old, and the average odometer reading is approximately 138,000 miles. The most popular clunker trades are Chevrolet, Ford and Dodge and 84 percent of the new vehicles purchased are passenger cars.
In the sample, 64% of the government funded credits were for $4500 and 36% for $3500. "Lower priced cars have a better chance of qualifying for the larger $4500 rebate because smaller vehicles typically have better mpg ratings," adds O'Connell. The rare exceptions are hybrids that cost more but often qualify for the $4500 because of their higher mpg ratings. "The best deals for the Cash for Clunkers program are the less expensive vehicles that cost $10,000-$18,000. A list of these types of vehicles is available on www.CashForClunkersInformation.org."
Based on a 69% mpg improvement, www.CashForClunkersInformation.org estimates that personal fuel consumption could decrease by approximately 300 gallons per year, reducing personal fuel costs by almost $750 annually at average gas prices. "If this early trend continues for all of the 250,000 sales that are estimated to occur under the program, it will save consumers more than $187 million dollars in gas expenses while also helping the environment," says O'Connell. As a result, the US annual fuel consumption could decrease by approximately 75 million gallons, reducing spending by a total of nearly $185 million on gasoline(1), and cutting CO2 emissions by more than 655,000 metric tons.(2)
"The program is definitely working as well or better than similar programs around the world. This will encourage law makers to allocate the full $4 billion dollars that Obama initially requested so the program can continue to stimulate the economy, help consumers and help the environment," says O'Connell.
An unexpected trend is the sales to consumers who do not qualify for the government program. Chip King, from www.JerrysToyota.com, says that "over half the consumers who initially inquired about the program did not qualify but many of them bought a car anyway due to the unprecedented manufacturer and dealer incentive programs, "explains King. "We are having our best used vehicles sales month all year because consumers who don't qualify for the program are buying certified pre-owned cars," said Brian Benstock from www.ParagonCars.com. "For every vehicle sold to a consumer who is eligible for the government program we have sold another vehicle to consumers who did not qualify."
We have included sample statistics from three dealer groups that have stores in major markets such as Florida, Ohio, Georgia, New York and Washington, DC. "So far all of our sales have been conquest sales," said Rick Case, the owner of one of the largest privately owned import dealer groups in the country.
Rick Case Automotive, Sheehy Automotive and Paragon Automotive Group all announced that they would help consumers starting July 1(st), which was when the law said customers would be eligible, and was 23 days before the government released the final rules. As a result, these dealers have a month of historical sales data they agreed to share for the transactions that have occurred in their stores located throughout the country. Below are some of the stats used in the sample:
Rick Case Automotive: Statistics from clunker transactions in Florida, Georgia and Ohio:
- More than 70% of the clunkers were domestics (all Ford or Chevy trade ins)
- 71% of the clunkers were SUV's
- 93% had over 100k miles
- 71% qualified for the $4500 (because SUV's only need a 5 mpg improvement to get the full $4500 rebate and 71% of clunkers were SUV's)
- The average clunker trade in gets 17 mpg
- The average new vehicle gets 25 mpg
- The average improvement is 8 mpg
Paragon Automotive: Statistics from transactions in their New York Import franchise stores):
- Clunker Trade ins: 69% Domestic; 31% Import
- 74% of clunkers were SUV (30%), Vans (35%) or
- Vans: 35%
- SUV: 30%
- Trucks: 9%
- Passenger Cars: 26%
- $3500 Credit: 43%
- $4500 Credit: 57%
- Avg. mpg for clunker: 16
- Avg. mpg for new car: 27
- Avg. mpg improvement: 9
Sheehy Automotive: Statistics from transactions in their 17 locations in Washington DC, Virginia, Maryland and Baltimore:
- 76% domestic trades, 24% import
SUV, pickups and minivans
- 44% SUVs
- 23% pickups
- 12% minivans
- 21% cars
- Average mileage 138,000
The regional websites and communication campaigns are built by www.CashForClunkersInformation.org, a private organization that lobbied for the bill, educates the public about the program, connects consumers with licensed dealers and helps retailers educate consumers in their local markets. Www.CashForClunkersInformation.org is a private consumer information portal, not a government website. The organization is proud to have been an important advocate of the congressional bill and now continues to serve as a voice for the public to encourage retailers and manufacturers to offer additional incentives to consumers to get into more fuel efficient vehicles that will help the environment, the economy and their industry. www.CashForClunkersInformation.org also helps retailers educate consumers in their local area about the Cash for Clunkers program. www.CashForClunkersInformation.org was created by Level 5 Advertising, a marketing company who provides communication services to some of the largest automotive retailers in the world.
About the Name -- Cash For Clunkers
While making its way through congress there were many bills with many names so the public and the press commonly referred to all versions of the bill as the "Cash for Clunkers" program. For this reason many consumer information sites, including ours, have utilized this universally understood term to refer to the many automotive scrappage programs that exist in the world, some funded by the government (C.A.R.S) and others financed by automotive retailers. To learn more visit www.CashForClunkersInformation.org or one of the websites below.
www.CashForClunkersInformation.org gathered the aforementioned information from some of the largest dealerships in the country who have sponsored a regional information portal built by the organization.
Below you will find a list of regional information portals that are sponsored by licensed dealers who were asked to provide information for this report.
- www.ClunkersAZ.com in Phoenix Arizona is sponsored by www.CourtesyChev.com
- www.CashForClunkersDC.com in Washington DC and Virginia is sponsored by www.Sheehy.com
- www.CashForClunkersNY.com in New York City is sponsored by www.ParagonCars.com
- www.ClunkersUS.com in Southern Florida, Atlanta and Ohio is sponsored by Rick Case
- www.CashForClunkersFL.com and www.CashForClunkersFLA.com in Naples and Sarasota Florida is sponsored by www.Germain.com
- www.CashForClunkersPA.com in Philadelphia is sponsored by www.Conicelli.com
- www.CashForClunkersVA.com in Virginia is sponsored by Priority
- www.CashForClunkersMaryland.com is sponsored by Jerry's Auto Group (www.JerrysToyota.com)
- www.CashForClunkersCarolinas.com for North and South Carolina is sponsored by www.BradshawAuto.com
If the press needs specific statistics for any of the markets they can contact Erin Miller at HLGroup or they can contact the dealer groups directly.
(1) Estimates based on average driving of 12,000 mile per year, average regular-grade fuel cost of $2.463 per gallon (as of July 20 from Energy Information Administration), and an estimated 250,000 vehicles sold under the CARS program which is based on $1 billion dollars divided by an average of $4,000.
(2) gallon of gas saved = .00881 metric tons of CO2 reduced according to the EPA