June 10, 2009 3:29PM # Cash for Clunkers Lesson: How to Use the $$ to Buy a Gas Guzzler By [Alan Reynolds](https://www.cato.org/people/alan-reynolds) --- SHARE My son’s station car is an old Ford Explorer AWD which, despite being a V‑6, was rated at about 15 mpg. Approaching 100,000 miles, the SUV’ s resale value is very low. The House approved a bill to give him a $3,500 voucher to buy a car that is supposed to get only 18 mpg, or $4,500 if it gets 20 mpg. Only 18–20 mpg? That’s not moving us much closer to President Obama’s pie-in-the-sky 35.5 mpg goalpost is it? Consider **how easy it would be to game this giveaway program** by using that $4,500 voucher to buy a big SUV or V‑8 muscle car. First of all, with Chrysler and GM dealerships folding, it should be easy to buy a mediocre Chevy Cobalt or Dodge Caliber for about $10,000 more than the voucher. What you do next is **sell** that boring econobox, even if you end up with $1,000 less than you paid — that still leaves you with $3,500 of free money, courtesy of taxpayers. As this process unfolds, the flood of resold small cars will make it even harder for GM, Chrysler and Ford dealers to get a decent price for small cars, because of added competition from new cars being resold as used. That’s their problem, not yours. So, take the $9,000 net from reselling the crummy little car plus the $4,500 from Uncle Sam. Then **use that $13,500 to make a big down payment on a used Cadillac Escalade, Toyota Tundra pickup or Corvette.** File this under “unintended consequences” (my own file is running out of space). ##### Related Tags [Energy and Environment](https://www.cato.org/research/energy-environment), [Government and Politics](https://www.cato.org/government-politics), [Regulation](https://www.cato.org/regulatory-studies), [Tax and Budget Policy](https://www.cato.org/tax-budget-policy) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).