Cash For Clunkers

The affectionate, tongue-in-cheek name for the Car Allowance Rebate System (or CARS...get it? CARS? The government is soooo clever). The program was part of the 2009 economic stimulus program that sought to jumpstart the economy following the financial blood-letting of the financial crisis of 2008.

The goal was to help out car makers by incentivizing buyers to scrap their old cars and buy new ones. There was a secondary goal of helping the environment by getting rid of high-emission jalopies. While the program was popular, its net impact to the economy was debatable. The average rebate to consumers was approximately $4,000 and was dependent upon a sliding scale of improved fuel efficiency from the older car that was traded in as compared to the new car that was purchased.

The cost to the taxpayer was $3 billion, with an estimated 690,000 automobiles sold under this program. However, critics suggested that only 125,000 new sales resulted from the program...implying that the rest of the sales would have occurred had the program not been in place.