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Cash for guzzlers

South Dakota State Roundup

January 1, 2010

Author

Ron Wirtz Editor, fedgazette

Maybe South Dakota never got the memo.

The federal “cash for clunkers” program offered up to $4,500 to drivers to upgrade their vehicles to more fuel-efficient models. But according to an investigation by the Argus Leader, state residents there used the program as an opportunity to simply trade in their vehicle for a discounted new one, with little net gain in fuel efficiency.

The program’s two best sellers in the state were the Ford F-150 and Chevy Silverado, both of which get about 16 miles to the gallon. For 90 percent of these purchases, the average trade-in improved net gas mileage by about three miles per gallon, the newspaper found. Average gas mileage for all new vehicles sold nationwide was 24.9, compared with 23.5 in South Dakota—a 6 percent difference—mostly the result of higher truck sales.

In all, the cash for clunkers program in South Dakota snagged $10.3 million in federal incentives for about 2,500 trade-ins, according to federal databases, or about $4,200 per vehicle.
Ron Wirtz
Editor, fedgazette

Ron Wirtz is a Minneapolis Fed regional outreach director. Ron tracks current business conditions, with a focus on employment and wages, construction, real estate, consumer spending, and tourism. In this role, he networks with businesses in the Bank’s six-state region and gives frequent speeches on economic conditions. Follow him on Twitter @RonWirtz.