Cash for Clunkers: a Missed Opportunity for Telematics, Stimulus, and a Smarter Nation?

Despite the ecological value of incentivizing the swapping of low mileage cars for higher mileage cars, there has been some questions over the economic value of the Cash for Clunkers program. Many are wondering if the program only served to pull forward manufacturing demand that would have soon developed anyway. I have been kicking around the following questions: would there have been more value in the program if there were additional incentives for purchasing cars that had telematics systems? Besides the obvious personal and societal advantages regarding safety and security, could cars equipped with telematics potentially be more efficient because of better routing afforded by these devices and their value added services? Could the telematics systems be used to gather real life data regarding emissions? From an economic standpoint, incentivizing the purchase of telematics systems would have extended the value of the program beyond the automotive industry and benefited the wireless device, cellular service, software, and GPS industries as well as others. These industries represent innovation – the future of the nation as well as the automotive industry. Vehicles will have to have connectivity capability resident in order to derive the maximum value out of the Smart infrastructure that is called for in the Stimulus Plan of earlier this year. Incentivizing the purchasing of telematics systems as part of the program would have helped to accelerate this up-take and adoption. The Cash for Clunkers program was based purely on mileage – meaning that many small, low end cars – those most probably lacking in innovative cutting edge technology, including telematics, were left out of the mix, ultimately resulting in missed opportunities on both the economic and ecological fronts.

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