$3 billion one time cost for $350 million savings per year. How many years the savings will continue is unclear, however it will be more than one and could be as many as ten, which would be a $3.5 billion savings.
You'd also have to compare it to buying a car or house with a loan, and look at overall cost when loan is paid off. Since the government BORROWED the money in the first place, with interest on a 10 year loan at 6%, total cost $3.997 billion.
Also, the problem is the gas money saved IS NOT from the ones spending the money (tax payers) its from the owners of the new cars. The tax payers never see a return on investment. I paid money so someone else could save. Actually hundreds of people had to pay for each individual owner could save.
Imagine your neighbor coming over to your house and telling you that if YOU spent $10,000 for solar panels for HIS house he could save $200 a month on electricity, and that in 50 months he would have saved the amount of money you paid and everything after that is profit (for him).
Also, the 224 million gallons of gas saved, not only will the government spend $3 billion plus interest, they'll also lose tax revenues from the gas not sold. At $1 a gallon for tax (just a guess) thats $224 million a year in lost gas tax revenues. Over 10 years time thats $2.24 BILLION. Now over 10 years amount spent, plus interest, plus gas tax revenues lost, that would be about $6.2 billion
Now granted, somewhere in there, most of these cars, NEARLY all of them, would have made their way to the junk yard anyway, and probably been replaced by a more economical car. But also, some of these cars or trucks would not have been replaced by what the were replaced with. Some of these vehicles would have been replaced by vehicles getting less gas mileage than the new ones bought.
Economics is a funny thing. Its not simply a static thing. It moves and changes and has variables.