Lets assume that most people with an 18 mpg clunker “upgraded” to an SUV achieving 5 mpg more. They received $3500 from the $1,000,000,000 allocated funding. Some simple division later, approximately 285,000 clunkers were pulled off the streets (1,000,000,000 / 3500). Therefore, there are now 285,000 people or families on the road saving 5mpg (or saving 0.012 gallons per mile) more than they usually were.

An average family drives around 15,000 miles a year. This leads to 180 gallons of gasoline saved per family per year. For the 285,000 clunkers replaced, we save 51,300,000 gallons of gasoline every year. Increase the federal funding to $3 billion and we will save a little over 153 million gallons of gasoline every year.

If the average clunker is replaced by a vehicle achieving 7.5 mpg higher, with a $3 billion stimulus, America will save almost 205,200,000 gallons of gasoline every year.

The total consumption of Finished Motor Gasoline is 137,801,370,000 gallons (approximately 8,989,000 barrels per day in 2008. Data from http://www.eia.doe.gov/basics/quickoil.html). Hence, a $3 billion funding, by saving 205,200,000 gallons of gasoline, saves only 0.1489% of total consumption. Not too significant in my opinion.

To achieve a 1% reduction in nationwide motor gasoline usage, around $20 billion (that is $20,000,000,000) needs to be pumped into the new-car market replacing over 5.7 million vehicles with a new vehicle achieving 7.5 mpg higher.

I wonder if gasoline consumption can be reduced by 1% by utilizing only $3 billion in bicycle infrastructure and alternate energy driven mass transit and rail infrastructure? The budget for this year’s Mass Transit infrastructure is $8 billion, $5 billion more each year for the next 5 years, not including operating costs. The Cash-for-Clunker’s $3 billion will be a nice addition to the mass transit budget and shave off 8 months from the 5 year proposal.

Further, evaluating the impact on a family, and assuming $3 billion in funding, these 857,000 families (285,000 X 3, assuming one clunker per family though there is no such rule) will save around 180 gallons of motor gasoline related expenses. At an average cost of $2.50 per gallon of gasoline, each family saves a measly $450 a year and gains $15,000 or more debt on a depreciating asset. With $3 billion in funding towards overhauling the streets to make bicycling actually and subjectively safe, families may be able to reduce from two cars to one, saving upwards of $4000 annually in car payments, insurance and gas.

My 50 year old mass produced dutch city bike, a text book definition of clunker, needs no replacement. At the most, it needs $50 of TLC. The next time someone tells me to get a registration for my bicycle, I’ll tell them at least I don’t need Cash for my Clunker!