Cash for clunkers

Taxpayers shelled out about $3 billion for nearly 700,000 new cars under the Cash for Clunkers program intended to encourage owners to trade in their older, gas-guzzling cars for vehicles getting better mileage.

However, a close analysis of federal data on sales by the Associated Press, found the government helped purchases of thousands of new vehicles that did not get much better mileage than the ones they replaced, particularly trucks and SUVs.

Under the four-week program, new vehicles had to get better mileage than the trade-in — at least 22 miles per gallon for cars but 15 or 18 mpg for trucks — to be eligible for a $3,500 or $4,500 rebate. The administration cites an increase in average fuel economy from 5.8 mpg to 24.9 mpg, but that includes all vehicles.

According to the AP study, though, about one in seven of the nearly 677,000 new vehicles had a fuel-efficiency rating less than 20 mpg. The most common trade, the AP reported, was the 8,200 deals in which buyers traded in a Ford F150 pickup truck for a new model, with an improvement of just 1 mpg to 3 mpg over their old truck.

Some deals may even have violated the program requirements. More than a half-million dollars in rebates went for new cars or trucks that got less or the same mileage as the trade-in. The government is investigating the allegations of invalid claims.

In its reports, the federal government has touted the success of the program, which also helped temporarily boost auto sales and consumer sales.

But, Jeremy Anywl, chief executive at Edmunds.com, said, "If we're looking for the environmental story here, we're going to be disappointed."

Thousands of truck and car owners, though, are driving around in new vehicles that do little to improve the environment with help from the government subsidy.