Prime Minister Julia Gillard made a pre-election promise to introduce a Cash for Clunkers scheme in 2011 to help put newer, less-polluting cars on our roads. The focus was on reducing vehicle emissions by making owners of pre-1995 vehicles eligible for a $2,000 rebate on a new, fuel-efficient model. But an unintended benefit of the proposed scheme is road safety.
Drivers under the age of 25 are over-represented in fatal crashes, in part because of inexperience and risk-taking behaviour, but also because a large proportion of them drive older, less safe vehicles.
According to the Bureau of Infrastructure, Transport and Regional Economics, which collates Australian road toll data, persons aged 25 and under account for 25 per cent of the road toll but only represent 16% of licenced drivers.
A study by The Buzz car insurance found that almost half of all young policy holders drove older vehicles with only the most basic safety features such as one airbag and anti-lock brakes, while 12 per cent drove vehicles that don’t even have these safety features.
The C4C proposal raises some questions about how it might work, who it might benefit and if the system is at risk of being rorted. To prevent motorists from buying an old junk car purely to take advantage of the $2,000 rebate, one proposal says the pre-1995 vehicle being traded-in must be registered and have been owned by the buyer for at least two continuous years immediately prior to the trade-in.
Some detractors say this will not benefit young drivers because it means they will need to own the older, less safe vehicle for two years before getting behind the wheel of a new car. But perhaps it may encourage other family members to sacrifice their old ‘clunker’ car and put it towards the trade-in. Others say that the proposed $2,000 rebate is not enough and few young drivers will be able to bridge the price gap to a choice of new small cars, which cost from $12,990 drive-away.
In North America and Europe, similar C4C schemes have seen rebates range between $3,000 and as much as $8,000 (depending on the vehicle being crushed and the vehicle being purchased). However, these schemes were designed as economic stimulus packages, to boost the respective economies and local car industries.
Meanwhile, widespread rorting of the scheme was revealed in Europe. An estimated 50,000 traded-in ‘clunkers’ were not crushed, rather they were sold through the back door to Eastern Europe and South Africa, and dealers were caught ‘double-dipping’ – getting the rebates plus cash for the ‘clunker’ cars. In North America the engines were filled with silicon to prevent the gas-guzzler engines from ever running again and certificates were issued when the cars were crushed. Only then did the rebate apply. Any rorting of these certificates is yet to be exposed.
Anything that encourages newer, safer and more efficient vehicles is a good thing. But if the C4C scheme goes ahead, authorities will need to ensure the ‘clunkers’ get crushed, and not allowed back on the roads.
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