Bob Hubbard - An idea for a possible partial solution to our gas troubles

An idea for a possible partial solution to our gas troubles

I had a thought during dinner today, and am tossing it out here for discussion.

I think rather than sending out dinky checks that will be spent quickly, the US Federal government should buy us new cars.

Yeah, you read that right.

Here's the idea.

Uncle Sam will buy your gas guzzler and give you a shiny new hybrid vehicle or a credit towards one.

Here's how it works.

You must own a -functional- currently insured and on the road vehicle that gets under 20 MPG. This can be a $500 beater or a 08 Hummer. Doesn't matter.

You take your gas guzzler to a participating hybrid dealer, who will take your vehicle (which is scrapped), and your government issued credit, and they will give you a hybrid vehicle up to $30,000.

This will do several things.
- It will remove permanently a large number of inefficient and environmentally bad vehicles from use.
- It will boost the adoption of hybrid technology helping to bring the costs down as higher use = lower production costs.
- It will diminish our use of fuel and diminish our environmental impact.
- It will put hybrid tech within the reach of many who otherwise would not be able to afford it.

There can be some caps placed on the program such as an income limit (say must make less than $50,000/yr), you must be the owner of the trade in, and have owned it at least 6 months, trade in must be functional, and in-use, number of allowed trade ins limited to 1 per family, etc. Car must be new, not used, all dealer discounts and promotions must be honored, no special surcharges can be added, etc. In other words, treat buyer like any other buyer. Any difference between final sale and the $30k grant is not redeemable for cash or credits, and anything over it is the buyers responsibility. Offer can't be combined with another grant. Qualifying hybrids will get a minimum of 35 MPG city. Sales Tax on these sales will be waved.

Here's the numbers:
United States federal budget, 2009 - $3.10 trillion
Cost of a fully loaded 2009 Toyota Prius : $22,700
Cost of a fully loaded 2009 Honda Civic Hybrid: $27,987

Take $15 Billion out of the budget for this program.
$15 Billion buys 660,792 Prius's.
$15 Billion is .48 percent of the budget. It's a drop in the cash bucket.

There are approximately 62 million registered vehicles in the U.S. at the current time and appox. 6.4 million unregistered functioning vehicles. Roughly 32% of those two numbers combined would account for Semi-Trucks, construction, heavy machinery vehicles. Stats accurate as of 02/01/05.

Now, as I said, unregistered and just registered, and non-functional vehicles wouldn't qualify.

Now, you wouldn't have to buy a Prius. Any car manufacturer who offered a hybrid that met the MPG limits would qualify.

In a year, the U.S. consumes about 146 billion gallons of gas.
Gas at $2.50/gallon = $365 Billion
Gas at $3.50/gallon = $511 Billion ($146 Billion more spent on gas)
Gas at $4.00/gallon = $584 Billion (another $73 Billion)

I think I'd rather see the Fed's spend $15 Billion of our tax dollars than give the oil companies another $73 Billion.

A possible place to get the funding for this is the oil companies themselves.

They are reporting record multi-billion dollar profits each quarter. So, hit them with a tax of a few billion each and strip the of the grants and whatnot they get and use that money instead to fund the car program.

Here are some more numbers.

Car gets 15 MPG.
You drive 12,000 miles in the year.
You burn 800 gallons of gas.
If gas is $3.50 per gallon that means you spend $2,800 a year on gas.

Car gets 35 MPG
You drive 12,000 miles in the year.
You burn 343 gallons of gas.
If gas is $3.50 per gallon that means you spend $1,200 a year on gas. A savings of $1,600!

Car gets 45 MPG
You drive 12,000 miles in the year.
You burn 267 gallons of gas.
If gas is $3.50 per gallon that means you spend $935 a year on gas. Thats another $265 saved, for a total of $1,865!

What's that add up to?
If 1 mere 700,000 vehicles getting 15 MPG were repaced with ones getting 45 MPG, it would save US consumers 373.1 Million gallons of gas, for a cash savings of 1.3 Billion dollars each year (if gas is $3.50/gal).