GAO 

United States Government Accountability Office

Report to Congressional Committees

AUTO INDUSTRY

Lessons Learned from 

Cash for Clunkers 

Program 

April 2010 

GAO-10-486 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

April 2010

AUTO INDUSTRY

Lessons Learned from Cash for Clunkers Program 

Highlights of GAO-10-486, a report to 

congressional committees 

Members of Congress and administration officials articulated two broad 

objectives for the CARS program: (1) help stimulate the economy and (2) put 

more fuel-efficient vehicles on the road. The program achieved these broad 

objectives; however, the extent to which it did so is uncertain. For example, 

nearly 680,000 consumers purchased or leased vehicles using the program’s 

credit, yet some of these sales would have happened anyway. Among others, 

NHTSA estimated how many sales were directly attributable to the program. 

In its report to Congress, the agency estimated that 88 percent of the 677,842 

CARS transactions approved at the time of its report were directly attributable 

to the program. Additionally, NHTSA found that the average combined fuel 

economy of new vehicles purchased or leased under the program was 24.9 

miles per gallon, compared with 15.7 miles per gallon for vehicles traded in. 

According to the agency, however, the entire difference in combined fuel 

economy may not have been a direct result of the program. NHTSA also 

estimated that the program reduced fuel consumption for the typical CARS 

participant. NHTSA based these estimates on a consumer survey that it 

designed and implemented. However, largely because it had limited time to 

establish and administer the program, NHTSA did not follow some generally 

accepted survey design and implementation practices, thereby posing a 

potential risk to the reliability of estimates based on the survey data. 

Stakeholders in the CARS program reported varied experiences. Specifically, 

the program benefited eligible consumers, providing them with a monetary 

credit to help purchase or lease a new vehicle. GAO found that participation in 

the program was distributed across the country and reflected the U.S. 

population distribution. Many consumers contacted the Department of 

Transportation (DOT) about the program, but DOT officials reported that no 

systemic problems with the program were identified through these contacts. 

Representatives of scrap and salvage industries reported that the impact of 

the CARS program was mixed. Automobile manufacturers and eligible 

dealerships generally benefited from the increased sales the program 

generated, even though they identified some administrative challenges. 

Representatives GAO spoke with about the impact on used vehicle 

dealerships and charities reported mixed experiences during the program and 

said it would be difficult to isolate the impact of the CARS program. 

The CARS program and most other vehicle retirement programs GAO 

reviewed shared some similarities, but differed in their objectives, eligibility 

criteria, and incentives. Most of the programs required that the trade-in 

vehicle be operational and registered. However, only the CARS program used 

fuel economy as a criterion for the trade-in vehicle, while other programs used 

different criteria, such as the vehicle’s age or emissions. Moreover, while the 

CARS program established a price ceiling for the new vehicle, only one other 

program included such a criterion. All of the programs used monetary 

incentives to encourage participation, but the average CARS monetary 

credit—about $4,200—was larger than other programs’ incentives, which 

ranged from about $300 to $3,500. 

DOT and EPA commented on this report and provided technical comments, 

which GAO incorporated, as appropriate. DOT discussed the successes of the 

program and noted the limited time NHTSA had to design and implement the 

program’s consumer survey. 

In July and August 2009, the federal 

government implemented the 

Consumer Assistance to Recycle 

and Save (CARS) program, or 

“Cash for Clunkers,” a temporary 

vehicle retirement program that 

offered consumers a monetary 

credit ($3,500 or $4,500) to trade in 

an older vehicle for a new, more 

fuel-efficient one. The National 

Highway Traffic Safety 

Administration (NHTSA) was 

responsible for administering the 

program, and GAO was required to 

review the program’s 

administration. This report 

examines (1) what is known to date 

about the extent to which the 

CARS program achieved its 

objectives; (2) what stakeholders’ 

experiences were with the CARS 

program; and (3) how the CARS 

program compares to other 

selected domestic and international 

vehicle retirement programs. 

To address these issues, GAO 

reviewed the CARS legislation and 

implementing regulations, a 

required NHTSA report to Congress 

on the program’s efficacy, and 

CARS program transaction data. 

GAO also contacted officials from 

NHTSA and the Environmental 

Protection Agency (EPA); 

representatives of industry 

organizations and academics; as 

well as CARS program 

stakeholders, including 

representatives from consumer 

groups, scrap and salvage 

industries, automobile 

manufacturers, vehicle dealerships, 

and charities. GAO also 

interviewed officials from other 

domestic and international vehicle 

retirement programs and reviewed 

information about these programs. 

View GAO-10-486 or key components. For 

more information, contact A. Nicole Clowers 

at (202) 512-2834 or clowersa@gao.gov.
Page i GAO-10-486 

Contents 

Letter 1

Background 4 

The CARS Program Achieved Its Broad Objectives, but the Extent 

to Which It Stimulated the Economy and Reduced Fuel 

Consumption is Uncertain 11 

Stakeholders’ Experiences with the CARS Program Varied 20 

The CARS Program and Most Other Vehicle Retirement Programs 

Share Some Similarities, but Also Differences in Program 

Objectives, Eligibility Criteria, and Program Incentives 26 

Concluding Observations 29 

Agency Comments and Our Evaluation 30 

Appendix I Scope and Methodology 32 

Appendix II GAO’s Analysis of the CARS Program’s Consumer 

Survey 35 

Appendix III GAO Contact and Staff Acknowledgments 38 

 

Tables 

Table 1: Vehicle Categories of Trade-in and New Vehicles 8 

Table 2: Domestic and International Vehicle Retirement Programs 

We Reviewed 26 

Table 3: Domestic and International Vehicle Retirement Programs 

We Reviewed 34 

Figures 

Figure 1: CARS Program’s Eligibility Criteria and Credit Amounts 6 

Figure 2: CARS Program Process 7 

Figure 3: CARS Program’s Top Trade-in Vehicles by Make 9 

Figure 4: CARS Program’s Top Purchased or Leased New Vehicles 

by Make 10 

Figure 5: Vehicle Sales from January 2005 through January 2010 13 

Figure 6: Participation in the CARS Program 21 

 Auto Industry 
Abbreviations 

CARS Consumer Assistance to Recycle and Save 

CEA Council of Economic Advisers 

DOT Department of Transportation 

EPA Environmental Protection Agency 

NHTSA National Highway Traffic Safety Administration 

NMVTIS National Motor Vehicle Title Information System 

OMB Office of Management and Budget 

TARP Troubled Asset Relief Program 

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page ii GAO-10-486 Auto Industry
Page 1 GAO-10-486 

 

United States Government Accountability Office

Washington, DC 20548 

 

April 29, 2010 

The Honorable Henry A. Waxman 

Chairman 

The Honorable Joe Barton 

Ranking Member 

Committee on Energy and Commerce 

House of Representatives 

The Honorable Jay Rockefeller 

Chairman 

The Honorable Kay Bailey Hutchison 

Ranking Member 

Committee on Commerce, Science, 

 and Transportation 

United States Senate 

The recent financial crisis has affected many sectors of the economy, 

including the auto industry. Domestic automobile manufacturers and 

foreign manufacturers with production facilities in the United States have 

seen vehicle sales decrease and some factories idle. These decreasing 

sales have, in turn, contributed to layoffs of auto workers and declining 

revenues for dealerships and automotive parts suppliers. The federal 

government has taken steps to assist the ailing domestic auto industry in 

an effort to improve the economy. For example, the Department of the 

Treasury has provided more than $80 billion in financial assistance to the 

domestic auto industry since December 2008.1

 Over fourth-fifths (or 

approximately $67 billion) of that financial assistance was provided to two 

of the nation’s three largest automobile manufacturers—Chrysler Group 

LLC and General Motors Company—and the federal government now has 

an unprecedented ownership stake in both of those manufacturers. 

1

In December 2008, the Automotive Industry Financing Program was established under the 

Troubled Asset Relief Program (TARP). Through the Automotive Industry Financing 

Program, the Department of Treasury provided about $67 billion to help Chrysler and GM 

continue operating as the companies restructured. In exchange for the funding it provided, 

the Department of Treasury received 9.85 percent equity in the new Chrysler, 60.8 percent 

equity and $2.1 billion in preferred stock in the new GM, and about $13.8 billion in debt 

obligations between the two companies. For more information on the Automotive Industry 

Financing Program, see GAO, Troubled Asset Relief Program: Continued Stewardship 

Needed as Treasury Develops Strategies for Monitoring and Divesting Financial 

Interests in Chrysler and GM, GAO-10-151 (Washington, D.C.: Nov. 2, 2009). 

 Auto Industry 
 

The federal government has also sought to help manufacturers manage the 

capital costs associated with producing advanced technology vehicles. In 

2007, Congress established the Advanced Technology Vehicle 

Manufacturing loan program, which offers low-cost loans to automobile 

manufacturers and component parts suppliers to retool aging plants or 

build new plants that will lead to the production of advanced vehicles that 

are at least 25 percent more fuel-efficient than current vehicles for sale or 

advanced technology components for these new vehicles.2

To further aid the auto industry and boost the economy, President Obama 

signed into law the Consumer Assistance to Recycle and Save (CARS) Act 

on June 24, 2009.3

 The act directed the Secretary of Transportation to 

establish and administer a vehicle retirement program through which 

owners of vehicles meeting statutorily specified criteria could receive a 

monetary credit for trading in their vehicle and purchasing or leasing a 

new, more fuel-efficient vehicle. The act originally appropriated $1 billion 

for the CARS program (commonly known as “Cash for Clunkers”) and 

established a period of eligibility between July 1, 2009, and November 1, 

2009. The National Highway Traffic Safety Administration (NHTSA) had 

responsibility for developing the implementing regulations for and 

administering the program. The act required NHTSA to publish the 

program’s final implementing regulations within 30 days of enactment. 

NHTSA carries out highway safety and consumer programs and sets fuel 

economy standards for passenger cars and light trucks sold in the United 

States, but had no previous experience overseeing a vehicle retirement 

program.4

 NHTSA established the program’s implementing regulations 

within the time required by the CARS Act on July 23, 2009, and eligible 

vehicle dealerships began submitting applications for the program’s credit 

on behalf of participating consumers beginning July 27, 2009. High 

consumer interest during the first days of the program led Congress to 

 

2

42 U.S.C §17013. 

3

Consumer Assistance to Recycle and Save Act of 2009, Pub. L. No. 111-32, tit. XIII, 123 

Stat. 1859, 1909-1915 (June 24, 2009). 

4

NHTSA’s primary mission is to save lives, prevent injuries, and reduce economic costs due 

to road traffic crashes through education, research, safety standards, and enforcement 

activity. 

Page 2 GAO-10-486 Auto Industry
 

appropriate an additional $2 billion for the program on August 7, 2009.5 To 

ensure the program’s appropriated funding would be sufficient for all 

completed transactions, NHTSA closed the program to new transactions 

on August 24, 2009, and required all transactions to be submitted for 

approval by August 25, 2009. 

According to the Congressional Research Service, vehicle retirement 

programs have been used both internationally and domestically—at the 

state level—to provide an economic incentive for the owners of older or 

highly polluting vehicles to retire their vehicles permanently from use. 6

Vehicle retirement programs are currently or have recently been carried 

out in other countries, including Canada, France, Germany, Italy, Japan, 

Spain, and the United Kingdom. In addition, since the early 1990s, 

domestic vehicle retirement programs or related pilot projects have been 

carried out in a handful of states including California, Colorado, Delaware, 

Illinois, Texas, and Virginia. The CARS program was the first federal 

vehicle retirement program in the United States. 

The August 7, 2009, legislation that provided supplemental funding for the 

CARS program also directed us to review the administration of the CARS 

program within 180 days of the end of its authorization on November 1, 

2009. In response, this report addresses (1) what is known to date about 

the extent to which the CARS program achieved its objectives; (2) what 

stakeholders’ experiences were with the CARS program; and (3) how the 

CARS program compares to other selected domestic and international 

vehicle retirement programs. The Department of Transportation’s (DOT) 

Inspector General is also issuing its report today; the Inspector General’s 

report examines the effectiveness of NHTSA’s controls over CARS 

transactions, implementation challenges, and NHTSA’s progress toward 

evaluating compliance and accounting for total program costs.7

 

 

5

Consumer Assistance to Recycle and Save Program, Supplemental Appropriations, Pub. L. 

No. 111-47, 123 Stat. 1972 (Aug. 7, 2009). This funding was transferred from the amount 

made available for the Department of Energy’s Innovative Technology Loan Guarantee 

Program in the American Recovery and Reinvestment Act of 2009. Pub. L. No. 111-5, 123 

Stat. 115 (Feb. 17, 2009). 

6

Congressional Research Service, Accelerated Vehicle Retirement for Fuel Economy: “Cash 

for Clunkers,” R40654 (Aug. 10, 2009); and A Clean Air Option: Cash for Clunkers, 96-766 

ENR40654 (Sept. 16, 1996). 

7

For information on the DOT Office of Inspector General, see www.oig.dot.gov. 

Page 3 GAO-10-486 Auto Industry
 

To prepare this report, we reviewed pertinent federal legislation, 

regulations, and reports, such as the CARS legislation and documents that 

the legislation directed NHTSA to prepare, including NHTSA’s 

implementing regulations for the CARS program and a report to Congress 

on the CARS program. We also reviewed NHTSA’s regulatory impact 

analysis of the CARS program, as well as related documents from other 

federal entities, including the Council of Economic Advisers (CEA), the 

Congressional Budget Office, the Congressional Research Service, and the 

Office of Management and Budget (OMB). 

In addition, we conducted, summarized, and analyzed in-depth interviews 

with officials from vehicle retirement programs in California, Texas, 

Canada, and Germany and reviewed the programs’ documentation on 

areas such as the eligibility criteria and program incentives. We selected 

vehicle retirement programs for our review that were ongoing or recently 

completed, were cited by auto industry associations and experts, or were 

consulted by NHSTA during its development of the CARS program’s 

implementing regulations. We also interviewed officials from Germany’s 

Supreme Auditing Institution which was responsible for evaluating 

Germany’s vehicle retirement program. Finally, we contacted industry 

experts; academics; consumer groups; and representatives of new and 

used vehicle dealers, manufacturers, the scrap and salvage industries, and 

charities that receive vehicle donations. See appendix I for more 

information about our scope and methodology. 

We conducted this performance audit from September 2009 through April 

2010 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. 

Under the CARS program, participating consumers received a $3,500 or 

$4,500 credit to purchase or lease an eligible new vehicle. The CARS 

program required that both the trade-in vehicle and the purchased or 

leased new vehicle meet certain requirements, including combined fuel 

Background 

Page 4 GAO-10-486 Auto Industry
 

economy thresholds.8 In general, for a trade-in vehicle to be eligible as a 

“clunker,” it had to: 

• be in drivable condition; 

• have been continuously insured and registered for 1 year or more prior to 

trade in; 

• have been manufactured less than 25 years before the transaction; and 

• have a maximum combined fuel economy of 18 miles per gallon.9

For a new vehicle to be eligible, it had to be a passenger car, category 1 

truck (e.g., sport utility vehicle), category 2 truck (e.g., large van or large 

pickup truck), or category 3 truck (e.g., very large van or very large pickup 

truck). The new vehicle also generally had to have a better combined fuel 

economy than the trade-in vehicle, as determined by the EPA. 

The credit amount generally depended on the type and combined fuel 

economy of both the trade-in and new vehicle. Specifically, in all 

transactions except those involving category 3 trucks, receiving the higher 

credit amount required a greater improvement in the combined fuel 

economy from the trade-in to the new vehicle, although heavier vehicles 

required a smaller improvement in combined fuel economy than passenger 

cars to receive the maximum credit ($4,500). Figure 1 provides additional 

information on the program’s eligibility criteria and credit amounts. 

 

8

According to the CARS program’s final implementing regulations, combined fuel economy 

is an Environmental Protection Agency (EPA) calculation representing the weighted 

average of a vehicle’s city and highway fuel economy as determined by the method 

described in EPA implementing regulations at 40 CFR 600.210–08(c). 

9

Requirements and Procedures for Consumer Assistance to Recycle and Save Program, 74 

Fed. Reg. 37878, 37884 (July 29, 2009). 

Page 5 GAO-10-486 Auto Industry
 

Figure 1: CARS Program’s Eligibility Criteria and Credit Amounts 

$3,500 

Type of new 

vehicle purchased

 or leased

The combined fuel

economy of the new

vehicle must be...

The type of

vehicle

traded in is...

Amount of credit

If the difference in

combined fuel economy

of the new and

trade-in vehicle is...

The credit is...

Category 1 truck 

(e.g., sport utility vehicle) 

At least 22 MPGa

At least 18 MPG 

N/A

(EPA does not rate

fuel economy of

category 3 trucks)

Passenger vehicle,

category 1 or 2 truck

(must have a combined

fuel economy rating of

18 MPG or less) 

Passenger vehicle,

category 1 or 2 truck

(must have a combined

fuel economy rating of

18 MPG or less) 

Category 2 truck (must have

a combined fuel economy

rating of 18 MPG or less) 

Category 3 truck

(EPA does not rate fuel

economy of category 3 trucks)

Category 3 truck

1 MPG

2 MPG or more

N/A

However, the new

vehicle must have an

equal or lesser Gross

Vehicle Weight Rating

$4,500 

$3,500 

$4,500 

$3,500 

$4,500 

N/A $3,500

$3,500

4-9 MPG

10 MPG or more

2-4 MPG 

5 MPG or more

Category 2 truck

 (e.g., large van or 

large pickup truck)

Category 3 truck 

(e.g., very large van or 

very large pickup truck)

Passenger

car

At least 15 MPG 

Source: GAO analysis of CARS program regulations.

a

MPG=Miles Per Gallon 

Consumers and dealers were required to take several steps to participate 

in the CARS program (see fig. 2). The consumer had to bring an eligible 

trade-in vehicle to a dealer and purchase or lease an eligible new vehicle. 

Then, the dealer had to ensure that both vehicles met the program’s 

eligibility criteria, provide the consumer with a credit toward the purchase 

or lease of the new vehicle, disable the engine of the trade-in vehicle, 

submit a complete application for reimbursement to NHTSA, and arrange 

for disposal of the trade-in vehicle. To arrange for vehicle disposal, dealers 

could elect to either transfer the trade-in vehicle directly to a qualified 

disposal facility or transfer it indirectly via a salvage auction. If the tradein vehicle was transferred via a salvage auction, only disposal facilities 

Page 6 GAO-10-486 Auto Industry
 

were eligible to participate in the auction.10 The qualified disposal facility 

was required to remove and dispose of all toxic or hazardous vehicle 

components, crush or shred the vehicle, and report that the vehicle had 

been received and then crushed or shredded to the National Motor Vehicle 

Title Information System (NMVTIS) overseen by the Department of 

Justice. 11

Figure 2: CARS Program Process 

Consumer Dealer

Salvage

auction

(optional)

Trade-in

engine

disabled 

Consumer

trades in

vehicle

Reporting/

administrative

requirements

Trade-in

Trade-in

Disposal facility

Salvage or scrap facility

crushes or shreds trade-in

Trade in

and disposal

process

Source: GAO analysis of CARS program regulations.

New vehicle and

$3,500 or $4,500 credit

NHTSA

Reviews applications for 

reimbursement from dealer; 

issues $3,500 or $4,500 

reimbursement to dealer

NMVTIS

Reflects status updates as

trade-in vehicle is (1) received 

and (2) crushed or shredded

The CARS legislation required the Secretary of Transportation, acting 

through NHTSA, to submit a report to Congress describing the efficacy of 

the CARS program no later than 60 days after November 1, 2009.12 NHTSA, 

a modal administration within DOT,13 prepared the report and found that 

677,842 vehicles received a credit through the CARS program, with an 

 

10Disposal facility means a facility listed as eligible to receive a trade-in vehicle for crushing 

or shredding under the CARS program, except in the case of a U.S. territory. These disposal 

facilities include (1) salvage facilities—also referred to as automotive recyclers or salvage 

yards—which recycle automotive parts for reuse and (2) scrap facilities—also referred to 

as scrap recycling facilities—which shred the vehicles and recycle some of the remaining 

materials. 

1174 Fed. Reg. 38974 (Aug. 5, 2009); 75 Fed Reg. 5248 (Feb. 2, 2010). 

12NHTSA, Consumer Assistance to Recycle and Save Act of 2009, Report to the House 

Committee on Energy and Commerce, the Senate Committee on Commerce, Science, and 

Transportation and the House and Senate Committees on Appropriations (Dec. 2009) 

http://www.cars.gov/files/official-information/CARS-Report-to-Congress.pdf. 

13DOT’s modal administrations are the departmental units responsible for the different 

modes of transportation. 

Page 7 GAO-10-486 Auto Industry
 

average credit amount of $4,209 (for a total value of $2,853,416,000).14

NHTSA’s report to Congress also stated that the number of vehicles traded 

in under the CARS program accounted for less than 1 percent of the total 

on-road vehicle fleet in the United States. As shown in table 1, the majority 

of the trade-in vehicles (approximately 85 percent) were category 1 or 

category 2 trucks, while the majority of new vehicles were passenger cars 

(approximately 59 percent). Figure 3 illustrates the most common makes 

of vehicles traded in by participants. According to NHTSA, approximately 

49 percent of the new vehicles sold under the program were manufactured 

by domestic and foreign automobile manufacturers in the United States 

and the most popular new vehicle makes were Toyota, Ford, Honda, 

Chevrolet, Nissan, and Hyundai (see fig. 4). 

Table 1: Vehicle Categories of Trade-in and New Vehicles 

Vehicle category Trade-in New

Passenger car 

Total vehicles 94,834 401,274

Percentage of transactions 13.99 59.20

Category 1 truck 

Total vehicles 446,323 225,985

Percentage of transactions 65.84 33.34

Category 2 truck 

Total vehicles 129,732 48,617

Percentage of transactions 19.14 7.17

Category 3 truck 

Total vehicles 6,953 1,966

Percentage of transactions 1.03 0.29

Total 677,842 677,842

Source: NHTSA. 

 

14In addition to the 677,842 transactions NHTSA found in its report to Congress, NHTSA 

officials said an additional 401 transactions were paid as of March 15, 2010, and decisions 

on another 22 transactions were pending. 

Page 8 GAO-10-486 Auto Industry
 

Figure 3: CARS Program’s Top Trade-in Vehicles by Make 

9.4%

5.1%

10.9%

17.5%

28.2% 28.9%

 Chevrolet 

 Ford 

 Jeep

GMC

Dodge

Other

Source: NHTSA.

Page 9 GAO-10-486 Auto Industry
 

Figure 4: CARS Program’s Top Purchased or Leased New Vehicles by Make 

12.7%

8.7%

7.2%

17.8%

13.3%

12.9%

27.4%

Hyundai

Nissan

 Chevrolet 

 Honda 

 Ford 

 Toyota 

Other

Source: NHTSA.

To collect information for its report to Congress on the efficacy of the 

CARS program, NHTSA designed and implemented a voluntary consumer 

survey to help determine what CARS program participants would have 

done in the absence of the CARS program. Dealers were required to 

provide participants with a copy of this survey, which included three 

questions: 

1. If you were not offered the CARS program trade-in incentive, would 

you still have traded in your current vehicle to purchase a new or used 

vehicle this month? 

2. If you were not offered the CARS program trade-in incentive, when 

you disposed of this vehicle, would you have purchased another 

vehicle? 

3. What is your best estimate of the number of miles you drove the 

traded-in vehicle during the past 12 months? 

Page 10 GAO-10-486 Auto Industry
 

The CARS Program 

Achieved Its Broad 

Objectives, but the 

Extent to Which It 

Stimulated the 

Economy and 

Reduced Fuel 

Consumption is 

Uncertain 

Auto Industry

Members of Congress and administration officials articulated two broad 

objectives for the CARS program in statements, press releases, or program 

documents, including the program’s implementing regulations.15 These 

broad objectives were to (1) help stimulate the economy and (2) put more 

fuel-efficient vehicles on the road. For example: 

• DOT, in the CARS program’s implementing regulations, stated that the 

program’s principal goal was to encourage replacement of older, less fuelefficient vehicles with new, more fuel-efficient cars and trucks.16

The CARS Program’s Two 

Broad Objectives Were To 

Help Stimulate the 

Economy and To Put More 

Fuel-Efficient Vehicles On 

the Road 

• President Obama, during his remarks on the economy on July 31, 2009, 

stated that the CARS program was an effort to boost the economy and sell 

more fuel-efficient vehicles. 

• In comments made on August 6, 2009, the Secretary of Transportation 

stated that the program removed fuel-inefficient vehicles and replaced 

them with fuel-efficient ones, making the program a “win-win for our 

economy and our environment.” 

 

15We reviewed the program’s authorizing legislation and the supplemental appropriations 

act; however, we did not identify anything in these laws that stated the explicit purposes or 

objectives of the CARS Program. Therefore, we examined statements, press releases, and 

program documents, including the program’s implementing regulations, to identify the 

program’s broad objectives. More specific objectives could lead to a better cost-benefit 

analysis of a program. 

1674 Fed. Reg. 37894. 

Page 11 GAO-10-486 
 

• A press release from a member of Congress on July 24, 2009, stated that 

the program was designed to energize the economy by boosting auto sales, 

and will put safer, more fuel-efficient vehicles on road. 

The CARS Program 

Achieved Its Broad 

Objective of Helping to 

Stimulate the Economy, 

but the Extent of This 

Effect Is Uncertain 

The CARS program helped to stimulate the economy, thereby achieving 

one of its broad objectives. Several indicators can be used to assess the 

program’s stimulative effect on the economy, including vehicle sales, 

Gross Domestic Product, and employment. The studies we reviewed 

showed that the program helped to stimulate economic activity as 

measured by these three indicators. However, our review of the studies 

also found that the extent of the program’s stimulative effect on the 

economy is uncertain. 

One economic indicator for the CARS program is vehicle sales—that is, 

whether the program increased the number of vehicles sold. Figure 5 

illustrates that, according to Bureau of Economic Analysis data, overall 

vehicle sales increased during the months of the CARS program (July and 

August 2009) compared with most months in the preceding year, when the 

economic recession drove vehicle sales down to pre-2005 levels. The 

studies we reviewed, including those from NHTSA and CEA, concluded 

that vehicle sales during July and August 2009 were, to some degree, 

attributable to the CARS program. 

Vehicle Sales 

Page 12 GAO-10-486 Auto Industry
 

Figure 5: Vehicle Sales from January 2005 through January 2010 

Passenger car and truck sales – not seasonally adjusted (in thousands) 

Source: GAO analysis of Bureau of Economic Analysis data.

2005 2006 2007 2008 2009 2010

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

S

Oct.

Nov.

Dec.

Jan.

ept.

Aug.

S

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

June

July

ept.

Aug.

S

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

June

July

ept.

Aug.

S

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

June

July

ept.

Aug.

S

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

June

July

ept.

Aug.

Jan.

Feb.

Mar.

Apr.

May

June

July

Passenger car and truck sales

Passenger car and truck sales during months of CARS program

Linear passenger car and truck sales

The extent to which the program stimulated vehicle sales, as measured by 

the number of vehicle sales attributable to the CARS program, is unclear. 

While some of the increase in vehicle sales in July and August 2009 is 

attributable to the CARS program, a portion of the sales would have likely 

occurred even if the program had not been implemented. To estimate the 

number of vehicle sales attributable to the CARS program, it is important 

to calculate “incremental vehicle sales”—that is, identify those vehicle 

sales that occurred because of the program and exclude those sales that 

would have occurred in the absence of the program. Among the estimates 

of incremental vehicle sales we identified, we found that a variety of 

methods were applied to produce the estimates, and that all of the 

estimates had limitations. For example: 

• According to NHTSA’s analysis in its report to Congress, 597,950 vehicle 

sales or 88 percent of the 677,842 sales that received a credit through the 

CARS program were incremental vehicle sales. To calculate this estimate 

of incremental vehicle sales, NHTSA relied on responses to the program’s 

voluntary consumer survey. Specifically, survey respondents were asked if 

they were not offered the CARS program credit, would they still have 

Page 13 GAO-10-486 Auto Industry
 

traded in their current vehicle and purchased a new vehicle during the 

month in which they participated in the program. NHTSA considered any 

transaction to be an incremental vehicle sale when respondents indicated 

that they would have traded in and purchased a new or used vehicle at a 

later time. However, largely because NHTSA had limited time to establish 

and administer the program, it did not follow some generally accepted 

survey design and implementation practices, thereby posing a potential 

risk to the reliability of estimates based on the survey data. See appendix 

II for more information on our analysis of NHTSA’s consumer survey. 

• According to CEA, approximately 440,000 vehicle sales, or 64 percent of 

the 690,114 applications submitted for the CARS credit, were incremental 

sales attributable to the CARS program.17 CEA estimated incremental 

vehicle sales attributable to the CARS program by subtracting (1) an 

estimate of the number of people who would have normally traded in 

vehicles characteristic of those traded in during the CARS program and 

(2) an estimate of the number of people who held off purchases in June 

waiting for the program to officially begin. CEA’s estimate may be limited 

by its assumption about the number of vehicles that would have been 

traded in normally since this number may not be reflective of what 

actually happened during the CARS program. 

• Industry organizations, such as Edmunds.com and Maritz Automotive 

Research Group, also estimated incremental vehicle sales attributable to 

the CARS program. For example, Edmunds.com estimated that 125,000 

incremental vehicle sales were attributable to the program. To produce 

this estimate, Edmunds.com first developed a hypothetical scenario to 

understand how many vehicles would have sold in the absence of the 

CARS program using market share information and actual sales data of 

vehicles that were not eligible for purchase or lease under the program, 

such as luxury cars. Edmunds.com then took the difference between sales 

in the hypothetical scenario and both actual sales data and estimated 

expected sales between October 2009 and August 2010, and considered the 

difference between these to be incremental vehicle sales attributable to 

the CARS program. This scenario relies on certain assumptions, which 

may differ from reality, such as its assumption that the share of sales of 

vehicles not eligible under the program as a percentage of the total sales 

remains stable before, during, and after the CARS program. Additionally, 

 

17CEA determined its estimate by using the approximately 690,000 applications submitted 

for review to NHTSA at the time CEA performed its analysis. CEA estimated vehicle sales 

based on pessimistic, baseline, and optimistic scenarios. CEA’s estimate of approximately 

440,000 incremental vehicle sales is based on its baseline scenario. 

Page 14 GAO-10-486 Auto Industry
 

Maritz Automotive Research Group estimated that 542,000 incremental 

vehicle sales were attributable to the CARS program based on a survey 

that the organization provided to consumers who purchased or leased new 

vehicles during the CARS program. Specifically, Maritz Automotive 

Research Group asked consumers if the CARS program was the reason 

they purchased or leased a vehicle when they did and, based on responses 

to this question, estimated the number of incremental vehicle sales 

attributable to the program. As with the other estimates we identified, this 

estimate has limitations. For example, the survey does not ask 

respondents when they would have purchased or leased the vehicle in the 

absence of the program. Therefore, according to a Maritz Automotive 

Research Group official, the survey data did not allow the organization to 

determine the extent to which the program pulled forward vehicle 

purchases or leases.18

In addition, to fully assess the impact of the CARS program on vehicle 

sales, it is important to account for changes in vehicle sales following the 

program. Incentive programs like the CARS program can have a “pull 

forward” effect—that is, they encourage immediate purchases of vehicles 

that buyers had planned to purchase in future months—thus, there can be 

a decline in vehicle sales during those future months, according to CEA. 

Bureau of Economic Analysis data show that in September 2009, vehicle 

sales dropped approximately 41 percent compared with August 2009; yet, 

these data also show that vehicle sales were higher in each month of the 

last quarter in 2009 than in September 2009. The extent to which the 

program impacted vehicle sales during these months is unclear, in part, 

because other factors, such as the condition of the economy, could have 

affected vehicle sales after the program ended. NHTSA analyzed how far 

the program pulled vehicle sales forward by using the results of its 

consumer survey. According to the agency, of respondents who indicated 

in the survey that they would not have traded in their current vehicle and 

purchased a new vehicle during the month in which they participated in 

the program, most reported that they would have traded in, sold or 

disposed of their trade-in vehicle in 2 years or less, with 2 years from the 

time of their CARS purchase being selected most frequently. However, as 

discussed previously, we found a potential risk to the reliability of 

NHTSA’s estimates based on the consumer survey data. CEA also analyzed 

how vehicle sales changed following two other incentive programs in 

order to estimate how vehicle sales might be impacted following the CARS 

 

18Because this study was published close to the issuance of our report, we were unable to 

fully review its methodology. 

Page 15 GAO-10-486 Auto Industry
 

program; but, CEA concluded that the results of this analysis could not be 

used to reliably estimate how vehicle sales might be impacted following 

the program.19

Another indicator of the CARS program’s economic impact is the extent to 

which the program impacted the nation’s economic output, as measured 

by Gross Domestic Product. Both NHTSA and CEA estimated the CARS 

program’s impact on Gross Domestic Product, and both concluded that 

the program had a direct economic impact. NHTSA estimated that the 

impact on Gross Domestic Product from the CARS program was 

approximately $6.8 billion. CEA estimated the program’s impact on Gross 

Domestic Product in the second half of 2009 would be between $2.5 billion 

and $6 billion. 

Gross Domestic Product 

However, the full extent of the program’s impact on Gross Domestic 

Product is uncertain. Fully assessing the program’s impact on Gross 

Domestic Product requires information on, for example, (1) the number of 

incremental vehicle sales attributable to the CARS program and (2) 

information on how automobile manufacturers managed inventory and 

production in response to those incremental sales. As discussed, there is 

little consensus on the number of incremental sales attributable to the 

CARS program. Furthermore, while auto industry representatives that we 

spoke with said that CARS program sales reduced vehicle inventory, it is 

not clear how much of the reduction in inventory led to increased 

automobile manufacturing and, therefore, a positive impact on Gross 

Domestic Product.20 Given these uncertainties, there are limitations to the 

estimates produced by NHTSA and CEA of the CARS program’s impact on 

Gross Domestic Product. 

The extent to which the CARS program led to changes in the number of 

jobs created or retained is another indicator of the program’s stimulative 

Employment 

 

19Specifically, CEA estimated how vehicle sales changed following two other incentive 

programs: zero percent financing in 2001 and employee discount pricing in 2005. CEA’s 

analysis found that sales dropped a statistically insignificant amount after the 2001 

program, but dropped a statistically significant amount after the 2005 program. CEA also 

reviewed the experiences from similar programs in other countries, but found no clear 

patterns in the post-program periods in those countries. These results led CEA to 

determine the experiences of these programs could not be used to reliably determine how 

sales would behave in the month following the CARS program. 

20The impact of the reduction in inventory on automobile manufacturing is not clear 

because information is unavailable on the extent to which vehicles sold from existing 

inventories were replaced with newly manufactured vehicles. 

Page 16 GAO-10-486 Auto Industry
 

effect on the economy. According to federal government evaluations, the 

CARS program created or retained jobs. CEA estimated that 40,000 to 

120,000 jobs were created or retained in the second half of 2009 as a result 

of the CARS program, whereas NHTSA estimated that at least 60,000 jobs 

were created or retained during the same period.21 These estimates vary, in 

part, because information required to account for the full impact of the 

CARS program is limited. For example, as discussed, there is no consensus 

on how many vehicle sales were attributable to the CARS program, which 

limits the ability to estimate additional vehicle production and, thus, 

manufacturing jobs created by the program. Moreover, manufacturers may 

have responded to demand for new vehicles generated as a result of the 

program by increasing the number of hours in their existing workforce, 

thus affecting jobs retained by the program; however, data to account for 

this impact is limited. 

While CEA and NHTSA used similar methodologies, the differences in 

their estimates highlight the challenge of determining the CARS program’s 

impact on employment. For example, though CEA and NHTSA determined 

their estimates using similar methodologies, their estimates varied 

because of differing assumptions. Specifically, both CEA and NHTSA 

assumed how many vehicles an average auto worker would produce per 

year and then derived the number of jobs that could be attributable to the 

CARS program using its estimate of incremental vehicle sales. However, 

CEA and NHTSA made different assumptions about how many vehicles an 

average auto worker could produce per year; CEA based its estimates on 

data for 2006, when vehicle sales and production were near their peak and 

NHTSA based its estimates on data for 2006 and 2008. Moreover, since the 

CARS program was temporary, the permanency of any employment impact 

is more difficult to gauge, and neither CEA nor NHTSA estimated how 

many jobs would last beyond the second half of 2009. CEA acknowledged 

that its employment impact estimates were more uncertain than its Gross 

Domestic Product estimates. 

 

21CEA estimated employment impact based on pessimistic, baseline, and optimistic 

scenarios of how many incremental sales the CARS program would generate. CEA based 

its estimates on job-years created or saved by the program. For example, CEA’s baseline 

scenario estimated that 35,000 job-years were created by the program in 2009, that is, hours 

of employment will be created that correspond to the hours associated with about 35,000 

full-time year-round jobs. Since all of these jobs are concentrated in the second half of the 

year; the actual number of jobs would be about 70,000 in the second half of 2009. While 

NHTSA acknowledged that the longevity of job creation from the program is uncertain, the 

agency did not define a “job” for the purpose of its analysis. 

Page 17 GAO-10-486 Auto Industry
 

The CARS Program 

Achieved Its Broad 

Objective of Putting More 

Fuel-Efficient Vehicles on 

the Road; the Extent to 

Which the Program 

Reduced Fuel 

Consumption Is Uncertain 

The CARS program put more fuel-efficient vehicles on the road, thereby 

achieving one of the program’s broad objectives. According to NHTSA’s 

report to Congress, the average combined fuel economy of trade-in 

vehicles was 15.7 miles per gallon and that of new vehicles was 24.9 miles 

per gallon, a 58.6 percent increase in fuel economy. Moreover, the report 

stated that since the CARS program required that participating consumers 

purchase or lease vehicles that are more fuel-efficient than their trade-in 

vehicles, the improved vehicle fuel economy will help reduce fuel 

consumption. 

Although the CARS program put more fuel-efficient vehicles on the road, 

the extent to which the program reduced overall fuel consumption is 

uncertain. According to NHTSA, the entire difference in combined fuel 

economy between trade-in and new vehicles may not have been a direct 

result of the CARS program since some consumers may have purchased or 

leased more fuel-efficient vehicles even in the absence of the program. 

Moreover, in addition to a vehicle’s combined fuel economy, other factors 

may impact overall fuel consumption. For example, fuel economy 

improvements reduce the fuel cost per mile of travel and, thus, may lead to 

increases in the miles driven which offsets some of the reduction in fuel 

consumption—a phenomenon commonly referred to as the “rebound 

effect.” To determine the type and combined fuel economy of the vehicles 

consumers would have purchased or leased in the absence of the CARS 

program and estimate the impact of the program on fuel consumption, 

NHTSA relied on the results of the program’s consumer survey. 

Specifically, for each consumer who indicated they would have replaced 

their vehicle on the consumer survey, NHTSA calculated the difference 

between the actual combined fuel economy of the new vehicle purchased 

or leased under the CARS program and the estimated combined fuel 

economy of the replacement vehicle selected on the survey. Based on 

these differences, NHTSA estimated that the program reduced fuel 

consumption for the typical CARS participant by approximately 10 

percent. However, as noted, largely because of the limited time NHTSA 

had to establish and administer the program, it did not follow some 

generally accepted survey design and implementation practices, thereby 

posing a potential risk to the reliability of the agency’s survey-based 

estimate of reduced fuel consumption. See appendix II for more 

information on our analysis of NHTSA’s consumer survey. 

Page 18 GAO-10-486 Auto Industry
 

In addition, NHTSA’s analysis of the CARS program’s impact does not 

account for the energy consumed and greenhouse gas and criteria 

pollutant emissions produced in prematurely disposing of the trade-in 

vehicle and in manufacturing the new vehicle.22 NHTSA officials stated 

that these impacts would be marginal and difficult to measure, because 

they are dependent on many unknown or highly variable factors. Howe

according to studies we reviewed, if factored into the analysis, energy 

consumed to prematurely dispose of the trade-in vehicle and manufacture 

the new vehicle may offset some of the program’s effect on emission 

reductions. For example, retiring an older vehicle before the end of its 

useful life will reduce the greenhouse gas and criteria pollutant emissions 

produced during the vehicle’s “use” phase.

ver, 

 

23 However, energy is consumed 

and emissions are produced during all phases of a vehicle’s life, including 

those considered “nonuse” phases, such as raw material extraction, 

materials production, parts manufacture, vehicle assembly, 

recovery/recycling, and disposal. According to one study, even if 

consumers would have disposed of their vehicles and purchased or leased 

new vehicles at some later date, the extent to which the CARS program 

accelerated these processes will cause additional emissions to be 

produced. Consequently, energy consumed and emissions produced to 

prematurely dispose of the trade-in vehicle and manufacture the new 

replacement vehicle may offset some of the program’s positive impact on 

emissions. According to an author of the study, although preliminary 

analysis indicates that the program will have a significant net reduction in 

energy consumption and greenhouse gas emissions, the magnitude of the 

net reduction is very sensitive to the expected remaining life of the tradein vehicle in the absence of the CARS program. 

22The primary greenhouse gases associated with a vehicle are carbon dioxide, methane, and 

nitrous oxide. Vehicles also emit a number of harmful pollutants including criteria 

pollutants such as carbon monoxide, nitrogen oxides, sulfur dioxide, particulate matter, 

and ozone. 

23According to one study we reviewed, the “use phase” encompasses all activities from the 

delivery of the new vehicle to the dealership to the last mile traveled by the vehicle, 

including: dealership sales, vehicle operation and storage, routine service and maintenance, 

and unscheduled service. 

Page 19 GAO-10-486 Auto Industry
 

The CARS program affected a range of stakeholders, and their experiences 

with the program varied. Through our literature review, we identified a 

number of stakeholders who were involved with or impacted by the CARS 

program including consumers, the scrap and salvage industries, 

manufacturers, eligible dealerships, used vehicle dealerships, and 

charities. The following summarizes these stakeholders’ experiences with 

the program. 

Stakeholders’ 

Experiences with the 

CARS Program Varied 

Consumers There was early and widespread participation by consumers eligible for 

the CARS program credit. The CARS program benefited participating 

consumers by providing a $3,500 or $4,500 credit toward the purchase or 

lease of a new vehicle in exchange for their trade-in vehicle.24 While 

requirements for participation meant that not all consumers were eligible 

to participate, a large number of consumers were eligible and quickly took 

advantage of the program, outpacing initial expectations about how many 

consumers would participate in the program. For example, while the 

program was authorized to last for 4 months, it lasted less than 2 months 

before officials closed it, because funding was running out.25 Our analysis 

of CARS transaction data also shows that consumer participation in the 

program was distributed across the country and reflected the U.S. 

population distribution (see fig. 6). 

 

24Consumers may also benefit from additional safety improvements in the new vehicle 

purchased or leased under the program. According to NHTSA’s report to Congress, any 

safety improvements added to the fleet since the model year of the trade-in vehicle are 

benefits attributable to the program. Specifically, the report states that sales of new 

vehicles under the CARS program will accelerate the presence of, among other things, 

braking improvements and advanced air bags, some of which can significantly reduce the 

likelihood of fatal crashes or injuries in crashes. However, the report noted that the CARS 

program resulted in the replacement of many larger vehicles with smaller passenger cars. It 

stated that although modern vehicles of all sizes are much safer than older vehicles, 

occupants of smaller vehicles tend to be more vulnerable in certain crash situations, which 

could offset some of the increase in the safety of the on-road fleet. 

25This includes the supplemental $2 billion appropriation the CARS program received from 

Congress in August 2009. Pub. L. No. 111-47. 

Page 20 GAO-10-486 Auto Industry
 

Figure 6: Participation in the CARS Program 

More than 100

51 to 100

26 to 50

1 to 25

Sources: GAO analysis of CARS data; Map Art (map).

CARS program transactions by zip code

Despite the popularity of the CARS program, consumers raised a number 

of questions and concerns about their experiences. For example, 

according to NHTSA’s report to Congress, the agency’s CARS hotline 

received nearly 900,000 calls during the first few weeks of the program 

that included questions and concerns. NHTSA officials told us that few of 

the calls they received about the program required additional follow-up 

Page 21 GAO-10-486 Auto Industry
 

and that no systemic problems with the program were identified based

information received during the calls. In addition, the DOT Inspector 

General’s hotline complaint center was contacted approximately 4,200 

times about the CARS program; however, few of these contacts involved 

cases of potential fraud. Specifically, according to an Inspector General 

official, 23 of the contacts to the hotline involved potential fraud cases, 

and these cases were forwarded to NHTSA for follow up. The official from 

the Inspector General added that most of these 23 cases alleged that trade

in vehicles were being resold or that vehicles which were not in drivable 

condition were being accepted for trade in—neither of which is permi

under the CARS program’s legislation and implementing regulation

Moreover, according to the official, the allegations of fraud to the 

Inspector General’s hotline did not involve systemic frau

 on 

-

tted 

s. 

d in the CARS 

program, but rather individual cases of potential fraud. 

ted by 

s 

’s 

 sign 

p 

ct request 

uently provided transaction 

information on its CARS Web site. 

f 

e 

 the 

e 

nd 

alvage 

Industries 

Representatives of consumer groups told us that they were contac

consumers with concerns about the program. According to these 

representatives, the nature of the contacts varied and included concern

about such issues as how long it took to get a response from NHTSA

CARS hotline, ineligibility due to lapses in vehicle registration, and 

agreements that dealers were requiring CARS program participants to

under which a participant would have to reimburse the dealer if the 

federal government rejected an application. One of the consumer grou

representatives also expressed concern that NHTSA was not publicly 

providing information about the program’s transactions in a timely fashion 

for real-time analysis and submitted a Freedom of Information A

for this information. NHTSA subseq

Representatives of scrap and salvage industries reported that the impact o

the CARS program was mixed. Officials we interviewed representing th

scrap industry, which shreds and recycles materials from the trade-in 

vehicles, told us that their industry had sufficient capacity to handle

volume of trade-in vehicles due to the CARS program. Specifically, 

according to one of the officials we spoke with, the domestic scrap 

industry processes approximately 12 million to 16 million vehicles a year

and, therefore, the existing processing capacity was sufficient to handl

the volume of vehicles received from the CARS program. This official 

added that any impact from the CARS program on scrap metal prices 

would likely be minimal. The scrap industry officials we spoke with also

stated that the industry identified some challenges associated with the 

program’s requirements. For example, one official stated that scrap a

Scrap and S

Page 22 GAO-10-486 Auto Industry
 

salvage facilities report vehicle status to NMVTIS through firms that 

charge a fee for each report, and that the CARS program required two 

separate reports to NMVTIS when the vehicle was (1) received and (2) 

crushed or shredded. 

me 

s and 

t 

-day 

ed 

der 

the program contributed to more business at salvage facilities. 

’s 

ed to 

 of eight 

ting 

a timely 

nother 

Manufacturers 

According to officials we interviewed representing the salvage industry, 

which recycles automotive parts for reuse, the CARS program’s impact 

was mixed. These officials stated that the program increased the volu

and quality of vehicles they received. However, the CARS program’s 

implementing regulations posed certain challenges. For example, the 

program’s implementing regulations prohibited the resale of engine

assembled drive trains from vehicles traded in under the program, 

potentially reducing the program’s value for the industry. The officials we 

spoke with representing the industry stated that the engine and drive train 

generally constitute 60 to 65 percent of a salvaged vehicle’s value. Another 

issue these salvage industry officials cited was the program’s requiremen

to crush or shred vehicles traded in as part of the CARS program within 

180 days. According to these officials, the number of CARS vehicles to be 

crushed or shredded created a potential problem in meeting this 180

requirement. In February 2010, NHTSA issued a rule extending the 

deadline for crushing or shredding a vehicle from 180 days to 270 days. 

These issues aside, officials also said that the number of vehicles receiv

by salvage facilities during the program was two to three times greater 

than normal, and that the quality of the vehicles received was better as 

well. The officials added that the better quality of vehicles received un

Representatives of automobile manufacturers we contacted reported that 

although the CARS program increased sales of new vehicles, the program

administrative requirements presented some challenges. When ask

describe the impact of the CARS program on sales, employment, 

production and/or inventory, representatives of automobile manufacturers

we contacted reported generally positive results. Specifically, six

manufacturers reported that the CARS program lowered vehicle 

inventories and five of eight reported increased production. Further, two 

manufacturers reported that the program sustained or preserved exis

employment levels. Nevertheless, manufacturers cited challenges in 

administering the program. Several manufacturers reported that the 

program’s implementing regulations were either not finalized in 

manner or changed, resulting in, for example, questions for the 

manufacturers from dealerships about the program’s intent. As a

example, several manufacturers reported that their dealerships 

Page 23 GAO-10-486 Auto Industry
 

experienced difficulties registering or obtaining authorization information 

necessary to participate in the program. According to NHTSA officials,

agency published the implementing regulations within the time frame 

established by the CARS Act and offered mu

 the 

ltiple Webinars to answer 

stakeholders’ questions about the program. 

rted 

n 

ips 

tributed 

trative 

use 

 dealers to 

resubmit applications that were not properly completed. 

e 

ries, 

e in the program, though 

they did not have data to support this assertion. 

ed 

on 

Eligible Dealerships 

Used Vehicle Dealerships 

Representatives we interviewed from a dealership association and from 

dealerships that were eligible to participate in the CARS program repo

that, despite some administrative challenges, they benefited from the 

CARS program. Some of the representatives told us that they faced some 

challenges handling the high volume of consumer participation or certai

requirements of the program, such as determining consumer eligibility. 

Further, representatives from the association and one of the dealersh

reported that NHTSA’s online system for processing CARS program 

transactions was another administrative challenge they faced. According 

to NHTSA’s report to Congress, the high volume of transactions received 

during the first few days in which the system was operational con

to disruptions in the reimbursement system, and the subsequent 

appropriation of another $2 billion for the program created further 

disruptions. These representatives stated that another adminis

challenge they faced was the length of time it took to receive 

reimbursements for the CARS program. While the CARS Act directed 

NHTSA to develop procedures for a maximum 10-day turnaround for 

dealer reimbursement, NHTSA’s report to Congress determined that the 

mean processing time for completed submissions was 16.9 days beca

of the high volume of participation and the need for many

Even though the turnaround time for reimbursements was longer than 

specified, dealership representatives told us that they benefited from the

program. Specifically, all of the representatives we spoke with said that 

vehicle sales increased during the program. Representatives of one of th

dealerships said that the program reduced existing vehicle invento

which allowed them to order one million new vehicles. Moreover, 

according to these representatives, as well as representatives from the 

dealership association, the CARS program also contributed to vehicle 

sales involving consumers who did not participat

Representatives we spoke with from a used vehicle dealer association and 

from dealerships that sell used vehicles in multiple states reported a mix

impact during the CARS program. Representatives from the associati

Page 24 GAO-10-486 Auto Industry
 

told us that demand remained neutral, while representatives of both 

dealerships told us that sales of used vehicles increased during the CARS 

program. In addition, according to the association representatives, as well 

as an industry analyst who tracks the wholesale market for used vehicles

new vehicle sales from the CARS program reduced the supply of certain 

new vehicle models, which then boosted sales and prices, particularly for

comparable late-model used vehicles. According to representatives 

one of the dealerships, incentive programs like the CARS program 

increase sales of used vehicles because some consumers who want to 

participate in programs like these are unable to do so and, thus, purchase 

a used vehicle instead. Officials from the association added that prices for 

used vehicles ten years or older rose during the CARS program. One of the 

representatives cautioned, however, that it would be difficult to is

impact of the CARS program on used vehicle prices, because the 

economic recession was already contributing to a lower supply of and 

higher prices for used vehicles. Another industry organization we spoke 

with told us that the used vehicle market is complex because it involves 

sales transactions by franchise retailers, independent retailers, and priva

individual

, 

from 

olate the 

te 

s and, thus, analyzing the impact of the CARS program on it is 

difficult. 

as 

RS 

g 

am, 

temporarily and inadvertently reduced vehicle donations to charities. 

Charities Similar to other stakeholders, representatives from charities with whom 

we spoke reported that the impact of the CARS program on charities w

mixed. Although six of the seven charities we contacted reported that 

fewer vehicles were donated during and immediately following the CA

program than during the same period in 2008, they could not directly 

attribute the change to the CARS program. When asked to report the 

number of vehicles donated during July, August, and September 2009, the 

charities reported a range of experiences from a relatively small decrease

from the same period in the previous year to a decrease of about half. In 

addition, several charities we contacted noted that other factors—such as 

the economic downturn, changes in tax law, and reductions in advertisin

expenditures—may have contributed to lower vehicle donations during 

the CARS program. NHTSA did not contact charities as part of its public 

outreach and consultation period during the design of the CARS progr

but its report to Congress suggests that the CARS program may have 

Page 25 GAO-10-486 Auto Industry
 

Although the CARS program and most other domestic and international 

vehicle retirement programs shared similarities, such as requiring that the 

trade-in vehicle be operational, differences existed in program objectives, 

eligibility criteria, and program incentives. For example, programs had 

varying eligibility criteria regarding the condition of the trade-in vehicle, 

the price of the new vehicle, and the income level of eligible program 

participants. Moreover, those programs used various incentives to 

encourage participation. See table 2 for more information. 

The CARS Program 

and Most Other 

Vehicle Retirement 

Programs Share Some 

Similarities, but Also 

Differences in 

Program Objectives, 

Eligibility Criteria, 

and Program 

Incentives 

Table 2: Domestic and International Vehicle Retirement Programs We Reviewed 

Program location 

(state or country) Program name 

Level of 

government Incentives 

Vehicle 

eligibility 

criteria 

Vehicle 

replacement 

required? Budget 

Program 

duration 

United States Consumer 

Assistance to 

Recycle and 

Save 

Federal $3,500 - $4,500 Generally 

meet 

specified 

combined 

fuel economy 

thresholds 

Yes; $45,000 

cap on 

manufacturer’s 

suggested 

retail price 

$3 billion 

(total) 

July 2009 - 

August 

2009 

Other domestic programs 

California Consumer 

Assistance 

Program 

State $1,000 Must fail 

biennial smog 

check 

No $34 million 

(annual) 

November 

1998 - 

ongoing 

Vehicle Buy 

Back Program 

Bay Area Air 

Quality 

Management 

District 

$1,000 Model year 

1989 or older 

No $6.5 million 

(annual)a

June 1996 - 

ongoing 

Rule 1610 South Coast Air 

Quality 

Management 

District 

Amount 

negotiated by 

vehicle disposal 

facility and 

consumer 

Officials 

project at 

least 3 years 

of remaining 

vehicle life 

No Varies 

depending 

on incentive 

paid by 

vehicle 

disposal 

facility 

January 

1993 - 

ongoing 

Page 26 GAO-10-486 Auto Industry
 

Program location 

(state or country) Program name 

Level of 

government Incentives 

Vehicle 

eligibility 

criteria 

Vehicle 

replacement 

required? Budget 

Program 

duration 

 High Emitter 

Repair or Scrap I 

South Coast Air 

Quality 

Management 

District 

$1,000 to scrap; 

an additional 

$1,000 for 

eligible lowincome persons 

to purchase an 

eligible 

replacement 

vehicle 

Program 

identifies 

vehicle as a 

gross polluter 

via remote 

sensing 

No, but lowincome eligible 

persons may 

receive a 

credit to 

purchase a 

replacement 

vehicle 

$4 million 

(total)b

June 2007 - 

April 2009 

Texas Drive a Clean 

Machine 

16 participating 

counties 

$3,000 - $3,500 

and only for 

eligible lowincome persons 

10 years or 

older; or 

failed 

emissions 

test 

Yes; $25,000 

ceiling on sale 

price 

$45 million 

(annual) 

December 

2007 - 

ongoing 

International programs 

Canada Retire Your Ride Federal All participants 

may receive: 

$300 CAD and 

up to $3,000 

CAD instant 

rebates from 

select 

manufacturers;c 

Other incentives 

vary by 

province, such 

as vouchers for 

public 

transportation or 

bicycle purchase

Model year 

1995 or older 

No, but may 

include vehicle 

manufacturer 

credit to 

purchase a 

replacement 

vehicle 

$92 million 

CADd

January 

2009; set to 

end March 

2011 

Germany Vehicle 

Scrappage 

Program 

(Abwrackprämie) 

Federal 2,500 euroseModel year 9 

years or older

Yes 5 billion 

eurosf

January 

2009 - 

September 

2009 

Source: GAO. 

a

This represents the budget for calendar year 2009; budget for calendar year 2010 was not known at 

the time of this report. 

b

The entire allocated budget was not spent due to a reassessment of the program and low consumer 

participation. 

c

As of April 8, 2010, these amounts convert to approximately $300 and $2,996 in U.S. dollars, 

respectively. 

d

As of April 8, 2010, this amount converts to approximately $91.87 million in U.S. dollars. 

e

As of April 8, 2010, this amount converts to approximately $3,341 in U.S. dollars. 

f

As of April 8, 2010, this amount converts to approximately $6.68 billion in U.S. dollars. 

Page 27 GAO-10-486 Auto Industry
 

Program Objectives The international and domestic programs we reviewed had varying 

program objectives. Only Germany’s vehicle retirement program shared 

the CARS program’s objective of providing a stimulus to the economy. The 

CARS program and Germany’s program also shared relatively short time 

frames of approximately two months and eight months respectively, 

compared to the other programs we reviewed, several of which have 

operated for more than 10 years. In addition, while one of the broad 

objectives of the CARS program was to put more fuel-efficient vehicles on 

the road, some other programs we reviewed may include different 

environmental objectives. For example, the county or district level 

programs we reviewed may also assist local areas in complying with state 

and federal air quality rules and regulations or reaching air quality 

attainment goals. 

Eligibility Criteria Most of the vehicle retirement programs we reviewed required that the 

trade-in vehicle be operational and registered, but only the CARS program 

included combined fuel economy as a criterion for eligibility. Under the 

CARS program, both the trade-in and the new vehicle were generally 

required to meet specified combined fuel economy thresholds; however, 

no other domestic or international programs we reviewed incorporated 

such a requirement. Instead, other domestic and international programs 

used criteria such as the age of the trade-in vehicle or the trade-in vehicle’s 

emissions, as measured by whether the vehicle had failed an emissions or 

smog check. Although the CARS program required that the trade-in vehicle 

have a maximum age of 25 years, when vehicle age was used as an 

eligibility criterion in the other programs we reviewed, those programs 

required that the trade-in vehicle be at least 9 years old. Regulations or 

officials for most of these programs stated that this requirement reflects 

the fact that older vehicles emit higher levels of criteria pollutants into the 

air than newer vehicles. 

The CARS program and one other vehicle retirement program we 

reviewed placed a limit on the price for a new vehicle. Specifically, for 

new vehicles eligible for purchase or lease under the CARS program, the 

manufacturer’s suggested retail price could not exceed $45,000. In 

addition, Texas’ Drive a Clean Machine program caps the sale price of a 

new vehicle at $25,000. The only other program that required the purchase 

of a replacement vehicle, Germany’s Vehicle Scrappage Program, did not 

place a price cap on the new vehicle eligible for purchase. 

Finally, although the CARS program did not include any income eligibility 

requirements, other domestic programs we reviewed limited participation 

Page 28 GAO-10-486 Auto Industry
 

or made certain incentives available only to low-income persons. 

Specifically, only residents who meet statutorily defined household 

income limits are eligible to participate in the Texas program. For 

example, for a household of four people, the maximum net income ceiling 

was $66,150 in 2009. In California, a vehicle retirement program 

administered by the South Coast Air Quality Management District 

provided an additional $1,000 to consumers who met California’s lowincome guidelines when those consumers retired their vehicle and 

replaced it with an eligible used vehicle. 

Program Incentives The vehicle retirement programs we reviewed used a variety of monetary 

incentives to encourage participation. The CARS program offered the 

highest monetary incentive, paying consumers an average credit of $4,209, 

according to NHTSA’s report to Congress. The other programs we 

reviewed paid incentives that ranged between approximately $300 and 

$3,500. Moreover, governments may partner with the private sector to 

offer additional monetary incentives to encourage consumer participation 

in their vehicle retirement programs. For example, in Canada, the 

government offers a monetary incentive as part of its vehicle retirement 

program and select automobile manufacturers provide instant rebates of 

up to $3,000. Canada’s program also offers participants vouchers for 

public transportation or the purchase of a bicycle as an incentive for 

retiring their vehicles. The CARS program did not offer similar incentives. 

The implementation and results of the CARS program offer potential 

lessons learned for future vehicle retirement or similar incentive 

programs. First, the program produced economic and environmental 

benefits, achieving its broad objectives. However, the extent of the 

program’s effects is uncertain. Second, before a program is underway, 

steps must be taken to determine what impacts are going to be measured 

and what data will be required to measure them. Moreover, steps must be 

taken to ensure that the data are reliable. NHTSA relied heavily on the 

consumer survey for data on the economic and environmental benefits of 

the CARS program. However, there is a potential risk to the reliability of 

estimates based on this survey data, because NHTSA did not follow some 

generally accepted survey design and implementation practices, largely 

because it had limited time to establish and administer the program. 

Finally, given the number of stakeholders that are financially affected by 

the auto industry, it would be important to collect and consider 

information on how a future program would affect these stakeholders and 

take mitigating actions, as appropriate. 

Concluding 

Observations 

Page 29 GAO-10-486 Auto Industry
 

We provided a copy of a draft of this report to DOT for review and 

comment. On April 1, 2010, we met with DOT officials to obtain their oral 

comments on the draft report. DOT officials stressed the economic and 

environmental successes of the CARS program, which the agency 

explained in detail in its December 2009 report to Congress. Specifically, 

officials stated that the program boosted vehicle sales and noted that there 

was almost a 60 percent improvement in the fuel-efficiency of vehicles 

purchased or leased under the program. With regard to our findings on 

NHTSA’s consumer survey and related conclusions, DOT officials noted 

that the agency had very limited time to design and implement the survey 

and, therefore, OMB approved an abbreviated approach to survey design 

and implementation practices, such as pretesting and follow-up efforts 

with CARS participants. Nonetheless, the officials stated that, based on 

subsequent analysis, they believe that the survey results provide reliable 

information on the impacts of the program. We agree that NHTSA faced 

enormous challenges in meeting the program’s statutory requirements, 

including the CARS Act’s requirement that NHTSA publish the program’s 

final implementing regulations within 30 days of enactment. Although the 

draft report recognized the limited time frames that NHTSA was working 

under, we included additional language in the final report about these time 

frames. However, we did not change our findings on NHTSA’s consumer 

survey as we continue to believe that following generally accepted survey 

design and implementation practices is important to ensuring the 

reliability of estimates based on survey results. DOT officials also provided 

additional technical comments, including comments on NHTSA’s “pull 

forward” analysis and on the energy consumed and emissions produced to 

manufacture new vehicles and prematurely dispose of trade-in vehicles as 

a result of the program, which we incorporated, as appropriate. 

Agency Comments 

and Our Evaluation 

We also provided a copy of a draft of this report to EPA for review and 

comment. EPA provided two technical clarifications via email, which we 

incorporated, as appropriate. 

We are sending copies of this report to other interested congressional 

committees and members, the Secretary of Transportation, and the EPA 

Administrator. The report also is available at no charge on the GAO Web 

site at http://www.gao.gov. 

Page 30 GAO-10-486 Auto Industry
 

If you or your staff have any questions about this report, please contact A. 

Nicole Clowers at (202) 512-2834 or clowersa@gao.gov. Contact points for 

our Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made major contributions to 

A. Nicole Clowers, Acting Director 

this report are listed in appendix III. 

Physical Infrastructure Issues 

Page 31 GAO-10-486 Auto Industry
Appendix I: Scope and Methodology Appendix I: Scope and Methodology 

Our work focused on the impact of the Consumer Assistance to Recycle 

and Save (CARS) program. In particular, we focused on: (1) what is known 

to date about the extent to which the CARS program achieved its 

objectives; (2) what stakeholders’ experiences were with the CARS 

program; and (3) how the CARS program compares to other selected 

domestic and international vehicle retirement programs. Our scope was 

limited by the extent to which CARS program data were available at the 

time of our review. 

To assess the objectives of the CARS program, we reviewed federal 

legislation, including the CARS Act and the supplemental appropriations 

act, CARS program’s implementing regulations, the National Highway 

Traffic Safety Administration’s (NHTSA) regulatory analysis of the CARS 

program, NHTSA’s report to Congress on the CARS program, and press 

releases of members of Congress and statements by administration 

officials, and other reports issued by federal entities such as the 

Congressional Research Service, the Congressional Budget Office, and the 

Council of Economic Advisers. We also conducted a literature review of 

other evaluations of the CARS program from auto industry experts and 

academics. In addition, we reviewed data from NHTSA on the CARS 

program, as well as data from the Bureau of Economic Analysis. We 

further reviewed guidance on survey design and implementation from the 

Office of Management and Budget. We interviewed NHTSA officials about 

the CARS program and officials at the Department of Transportation 

Office of Inspector General about its review of the CARS program and 

contacts to its hotline complaint center about the program. We also 

interviewed officials from the Environmental Protection Agency, 

representatives of organizations from different sectors of the auto 

industry, and representatives of an organization focused on fuel-efficiency 

and environmental issues, and academic experts who prepared 

environmental evaluations of the CARS program. 

To determine stakeholders’ experiences with the CARS program, we first 

conducted a literature review to identify program stakeholders. Through 

this review, we identified the following groups as stakeholders: 

consumers, the scrap and salvage industries, manufacturers, eligible 

vehicle dealerships, and used vehicle dealerships, and charities. We 

contacted representatives from each of these groups. Specifically, for 

consumers, we spoke with representatives of consumer groups and 

Department of Transportation Inspector General officials about contacts 

from consumers about the CARS program; for scrap and salvage 

industries, we spoke with representatives from a scrap recycling industry 

association, an automotive recycling industry association, and a scrap 

Page 32 GAO-10-486 Auto Industry 
Appendix I: Scope and Methodology 

recycling facility; for manufacturers, we spoke with associations 

representing automobile manufacturers and contacted representatives of 

automobile manufacturers that produced the top 8 vehicle makes 

purchased or leased under the CARS program; for eligible dealerships, we 

spoke with representatives of a new vehicle dealership association and 

two dealerships; and for used vehicle dealerships, we spoke with 

representatives of a used vehicle and independent dealership association, 

two dealerships, and organizations that provide analysis of the used 

vehicle market. We also contacted and received information from 

representatives of 7 charities that operate vehicle donation programs. We 

selected these charities based on a review of previous GAO reports from 

2003 and 2008 on vehicle donations to charities. The 2003 report identified 

65 charities that operate vehicle donation programs. From this list we 

identified the top 10 charities by net proceeds from the vehicle donation 

program and the top 10 charities by the number of vehicles donated. We 

then selected the 7 charities that were on both top 10 lists for our review. 

To understand how the CARS program compares to other domestic and 

international vehicle retirement programs, we identified states and 

countries through a literature review and interviews with government and 

industry officials. To select which other programs to review as part of our 

study, we used the following criteria: the program was ongoing or recently 

completed; it was consulted by NHTSA officials during the development of 

the CARS program’s implementing regulations; or was cited by officials we 

spoke with as worthy of review. Based on these criteria, we selected seven 

programs in four locations (California, Texas, Canada, and Germany) to 

review (see table 3 for additional information). We conducted in-depth 

interviews with officials from these programs via phone or in-person 

meetings and reviewed program documentation on areas such as the 

programs’ eligibility criteria and program incentives. In addition, we 

visited officials at the European Commission in Belgium to obtain an indepth understanding of their evaluation of vehicle retirement programs in 

Europe. While in Belgium we interviewed an official representing a 

European automobile manufacturers’ association and, by phone, 

representatives of a German manufacturers’ association and a United 

Kingdom manufacturers’ association, who were knowledgeable about 

vehicle retirement programs in Germany and the United Kingdom. 

Page 33 GAO-10-486 Auto Industry
Appendix I: Scope and Methodology 

Table 3: Domestic and International Vehicle Retirement Programs We Reviewed 

Program location 

(state or country) Program name 

California Consumer Assistance Program 

Vehicle Buy Back Program 

Rule 1610 

High Emitter Repair or Scrap I 

Texas Drive a Clean Machine 

Canada Retire Your Ride 

Germany Vehicle Scrappage Program (Abwrackprämie) 

Source: GAO. 

We conducted this performance audit from September 2009 through April 

2010 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. 

Page 34 GAO-10-486 Auto Industry
Appendix II: GAO’s Analysis of the CARS Appendix II: GAO’s Analysis of the CARS Program’s Consumer Survey 

Program’s Consumer Survey 

NHTSA designed a consumer survey to collect data on what consumers 

who participated in the CARS program would have done in the absence of 

the program. However, largely because NHTSA had limited time to 

establish and administer the program, the agency did not follow some 

generally accepted survey design and implementation practices, thereby 

posing a potential risk to the reliability of estimates based on the survey 

data. We identified areas of data collection, data processing and data 

analysis, and survey design that NHTSA omitted. 

According to CARS program’s implementing regulations, dealers were 

instructed to distribute the survey to participating consumers for 

completion and were requested to attach a completed consumer survey to 

each application for reimbursement submitted to NHTSA. Although 

consumers were not required to respond to the survey, dealers were 

instructed to return the survey marked “declined” if the consumer chose 

not to respond. NHTSA officials reported that the agency expected 

approximately 75 percent of consumers to respond. However, according to 

NHTSA’s report to Congress, of the 677,842 paid transactions under the 

CARS program at the time of the report, a total of 185,342 consumer 

surveys were submitted, for an overall response rate of 27 percent. NHTSA 

officials reported that the agency subsequently omitted 41,344 surveys, or 

22 percent of submitted surveys, because they were incomplete or 

incorrect (27,623), blank (2,579), duplicate (4,939), invalid (3,859), or did 

not match the transaction (2,344). After omitting these surveys from the 

total submitted, the valid response rate was reduced to 21 percent. 

NHTSA did not follow recommended data collection procedures when it 

did not follow up with nonrespondents to increase the survey response 

rate and identify reasons for nonresponse. The survey response rate is 

generally considered to be one indication of the quality of survey data. 

According to Office of Management and Budget (OMB) guidance, agencies 

should, as part of their data collection methodology, develop procedures 

to monitor how survey data are collected, including strategies to correct 

identified problems.1

 For example, OMB guidance suggests that agencies 

have reporting systems that provide timely information about survey 

response rates and the reasons for nonresponse. Further, when response 

rates are low, OMB recommends follow-up with a subset of 

 

1

See Office of Management and Budget Standards and Guidelines for Statistical Surveys 

(September 2006), which documents the professional principles and practices that federal 

agencies are required to adhere to and the level of quality and effort expected in statistical 

activities. 

Page 35 GAO-10-486 Auto Industry 
Appendix II: GAO’s Analysis of the CARS 

Program’s Consumer Survey 

nonrespondents, which would allow for some understanding of 

differences between respondents and nonrespondents. According to 

NHTSA officials, they became concerned that many dealers were not 

offering the survey to consumers as required in the CARS program’s 

implementing regulations. Although NHTSA did not conduct any follow-up 

efforts with consumers to increase the response rate and identify reasons 

for nonresponse, it did contact a dealership association to assist in 

encouraging more dealers to distribute the survey. NHTSA stated that the 

tight schedule for the issuance of its report to Congress mandated in the 

program’s authorizing legislation made conducting follow-up efforts with 

nonrespondents impractical. 

NHTSA also did not follow recommended data analysis procedures when 

it did not conduct a nonresponse bias analysis on all survey items used in 

its analysis before publishing its report to Congress. To better understand 

the potential for bias caused by nonresponse, OMB guidance suggests that 

nonresponse bias analysis should be planned for or conducted if the 

expected or actual response rate for a particular survey item is below 70 

percent. According to NHTSA’s report to Congress, the agency compared 

survey respondents to nonrespondents on the basis of location, 

Manufacturer’s Suggested Retail Price, odometer reading, trade-in vehicle 

age, credit amount, and new vehicle combined fuel economy, and found 

that respondents and nonrespondents were similar for these items. 

However, when NHTSA reduced the number of surveys from 143,998 (21 

percent) to 88,286 (13 percent) for purposes of its analysis of the impact of 

the CARS program on fuel consumption and emissions, it did not conduct 

a similar comparison for this reduced sample before publishing its report. 

NHTSA reduced the number of surveys by eliminating the surveys 

submitted by consumers who responded that they would not have 

replaced their vehicle (approximately 35 percent of survey respondents). 

The report states that these surveys were eliminated because there was no 

alternate replacement vehicle that would have been purchased in the 

absence of the CARS program with which to compare their actual 

purchase under the CARS program. Although the agency did not conduct a 

nonresponse bias analysis on the reduced sample before the report to 

Congress was published, in response to GAO questions about whether a 

nonresponse bias analysis was conducted on the reduced sample, NHTSA 

subsequently conducted such an analysis on the reduced sample 

comparing respondents to those who did not respond on the basis of 

Manufacturer’s Suggested Retail Price, trade-in vehicle age, credit amount, 

new vehicle combined fuel economy and odometer reading, and found that 

nonrespondents and respondents were similar. 

Page 36 GAO-10-486 Auto Industry
Appendix II: GAO’s Analysis of the CARS 

Program’s Consumer Survey 

NHTSA did not perform a key recommended survey design practice. 

Specifically, OMB guidance states that agencies must test surveys before 

they are distributed—a process known as pretesting—through, for 

example, the use of cognitive testing, focus groups, or field tests. NHTSA 

officials told us that due to the condensed time frame to establish the 

program, they were unable to perform a formal pretest of the survey, but 

stated they performed an informal pretest of the survey involving three 

staff members not involved in designing the survey to allow for feedback 

on the survey’s structure and clarity. We have found that pretesting helps 

ensure that the survey: 

• actually communicates what it was intended to communicate; 

• is standardized and will be uniformly interpreted by survey respondents; 

and 

• will be free of design flaws that could lead to inaccurate answers. 

In addition to helping ensure the clarity of the questions, we found that 

pretesting can indicate when there is a low likelihood of obtaining 

accurate factual data from survey responses. NHTSA’s consumer survey 

included factual questions. For example, the survey asked consumers the 

number of miles they drove the traded-in vehicle during the past 12 

months. 

Page 37 GAO-10-486 Auto Industry
Appendix III: GAO

A

 Contact and Staff 

cknowledgments 

Page 38 GAO-10-486 

Appendix III: GAO Contact and Staff 

Acknowledgments 

A. Nicole Clowers, (202) 512-2834 or clowersa@gao.gov

In addition to the individual named above, Raymond Sendejas, Assistant 

Director; William Colwell; Elizabeth Eisenstadt; Lorraine Ettaro; Timothy 

Guinane; Terence Lam; James Leonard; Nancy Lueke; Susan Michal-Smith; 

Amanda Miller; Tina Won Sherman; and Crystal Wesco made key 

contributions to this report. 

 Auto Industry 

GAO Contact 

Staff 

Acknowledgments 

(544158) 
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