Cash for clunkers becomes cash for guzzlers

As the US president Barrack Obama pledges another $US2 billion to support the cash for clunkers scheme, a study has revealed that some pick-ups and 4WDs have crept into the top 10 most popular models bought using the extra cash.

This is despite the fact that the scheme was supposed to replace wheezing old gas guzzlers with new fuel-efficient vehicles.

The first allotment of $US1 billion for the scheme was supposed to last until the end of the year. But it ran out in a week and caused a frenzy at dealerships across North America.

According to the way the US Federal Government compiles the list of new cars bought under the scheme, the Toyota Corolla is the most popular model.

But motoring website Edmunds.com has dug deeper into the data, crunched the numbers and come up with a startling result.

The flaw in the Federal Government system is that it lists each car according to engine type, and because there is only one type of engine in the Corolla, it comfortably tops the list.

But if you count each sale by nameplate – and include all the different variants – the top seller is a 4WD, and several pick-ups make the top 10.

According to Edmunds.com, the top sellers are the Ford Escape 4WD (pictured) ahead of the Ford Focus and Jeep Patriot.

The Ford F150 is fifth behind a Dodge Caliber and a Chevrolet Silverado pick-up is eighth – ahead of the Toyota Corolla which is ranked ninth when measured this way.

The US cash for clunkers scheme has been successful in clearing old stock and propping up dealerships across the country.

Before the scheme, 39 per cent of new-car sales involved a trade-in. After the scheme was introduced, 51 per cent of new-car sales involved a trade-in.

But there may be another side-effect of the clunkers program: charities that rely on old unwanted cars are going hungry.

News agency Associated Press last week reported that a charity in Texas estimated the Cash for Clunkers scheme cost it $75,000 in lost used-vehicle donations.

Another report said the National Kidney Foundation believes the scheme will cut its "donation pool" of about 30,000 vehicles annually by as much as 15 per cent.

Other experts believe charities are no worse off, because those who don't qualify for the Cash for Clunkers scheme are encouraged to donate their old bombs to a good cause.

Meanwhile, German authorities have unearthed a scam that has emerged with the cash for clunkers scheme there.

Officials estimate about 10 per cent of the cars that were supposed to be scrapped were instead exported to poorer countries in Eastern Europe and to Africa.

Apparently the surge in cars junked in Germany has dramatically pushed down the price of scrap metal.

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