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What Is Clunker?

A clunker is a well known term for an old vehicle that was begat during the 1930s. All the more as of late, the term was utilized in reference to vehicles traded for a fresher, more fuel-productive vehicle in the U.S. government's "cash-for-clunkers" program, carried out in 2009. For a "clunker" to be eligible for the program, it must have fulfilled four conditions:

  1. It must be in drivable condition
  2. It needed to have been consistently insured for one year prior to the exchange
  3. It needed to have been manufactured under 25 years before the date of exchange
  4. It needed to have a combined fuel effectiveness of 18 miles for each gallon or less

Figuring out Clunker

The money for-clunkers program in the U.S. offered drivers of old "clunkers" up to a $4,500 voucher for trading in their old vehicle for a fresher, more fuel-productive vehicle. On the off chance that an old vehicle was worth more than $4,500, the program could never have been beneficial as the vehicle owner might have just sold their vehicle to the dealer.

Allies of the program contended that it was a triumph since it gave a stimulus to the economy and supplanted many fuel inefficient vehicles with more fuel-effective vehicles that made less pollution. The program, allies contended, eliminated around 700,000 fuel-inefficient cars from the road.

Analysis of the Cash-For-Clunkers Program

Numerous financial experts, alongside some federal government agencies and environmental gatherings, scrutinized the program. Several financial experts called the program an illustration of the "broken windows" fallacy, which holds that spending makes wealth. They contend that the program failed due to hidden effects and inconspicuous results of the program and that the program made a shortage of pre-owned cars, making utilized vehicle prices flood and hurting low-income individuals. They additionally contend that the program cost taxpayers $3 billion and that the program did essentially nothing to invigorate the U.S. economy — even in the short run — on the grounds that it helped foreign car manufacturers to the detriment of domestic manufacturers.

A 2017 study involved data from sales in Texas to assess the program. Texas was one of the key markets for the program and was responsible for 6% of overall sales. The study found that 60% of endowments went to consumers who might have bought another vehicle in any case. Even after the program ended, there was no huge difference in purchase behavior or vehicle ownership in the state. In the event that money for-clunkers had been a triumph, there would have been a precarious decline in vehicle ownership or purchases. The study additionally found that the program induced customers to purchase less expensive fuel-productive vehicles to meet its criteria, in this manner twisting the market for fuel-proficient vehicles.

In reality, the National Bureau of Economic Research stated that the program's positive effects were unassuming and short-lived and that the vast majority of the transactions it prodded would have happened at any rate. A study by Edmunds claims that the program prodded 125,000 vehicle purchases that could never have in any case occurred around then, costing citizens an average of about $24,000 per transaction. Different studies agreed on the negative net effects, since rejecting the traded-in vehicles required large measures of toxic synthetics and the motors must be shipped off landfills or smelters.


  • Clunker is a reference to the money for-clunker program began by the Obama administration in 2009 to prod consumer spending on fuel-proficient vehicles.
  • It offered drivers of old "clunkers" up to a $4,500 voucher for trading in their old inefficient vehicle for a fresher, more fuel-productive vehicle.
  • The overall consensus is that the program was ineffective and did close to nothing to boost spending on fuel-proficient vehicles.