Cash For Clunkers Was an EXPENSIVE FAILURE

Edmunds.com/The Lid ^ | 10/29/09 | The Lid

[Shellybenoit]

The Cash for Clunkers program was widely touted as a major success by the administration but like most things coming out of Washington that was was a fabrication. The Automotive research website Edmunds.com did a simple business analysis of the cash for clunkers program and discovered that American Tax Payers payed an average of $24,000 to sell each additional car in the clunkers program.

A total of 690,000 new vehicles were sold under the program, all but 125,000 would have been sold anyway. Divide the the total cost of $3 billion by those 125 thousand cars and you arrive at the $24,000 figure, and the conclusion that Cash for Clunkers is was nothing but an expensive government failure.

[BertWheeler]

True. But what was the ulterior motive?

[AngelesCrestHighway]

$24,000 for each clunker?.....I could have bought a good fuel efficient car for half the price....Great waste of my tax money there, Barry!

[Hodar]

So, for people who were going to buy a car anyway, this was a taxpayer funded ‘gift’. I wonder how many people who either bought a new car under impulse from this program, and cannot afford the payments - or have lost their jobs after getting the car and are going to have it either re-possessed or declare bankrupcy? How many of these cars are going to be sold in the Used Car market, because people simply cannot afford the new car payments, in an Obama economy?

The part that has not been advertized, is that the recepients of this $4,500 ‘gift’ is going to be taxed on their income later on this year.

[nikos1121]

This country is a mess

[nikos1121]

This country is a mess

[Batrachian]

"...like most things coming out of Washington Barack Obama's mouth that was a fabrication."

That's how I would have written it but I guess they don't want to be impolite.

[Eye of Unk]

This failed plan was to start making everyone equal, and if we allow this travesty to run its course unchecked in less than a decade your choice of vehicle buying will be only decided by the government. Myself I bought a new vehicle this year, the first time in my life I have ever had a new one was just last month, I bought a Yamaha V-Star 1300 Tourer.

[Lonesome in Massachussets]

You can say that again.

[buffyt]

Chevy Cobalts were a lot cheaper than that, with or without bailout rebate money!

[Lonesome in Massachussets]

“You can say that again” is just a figure of speech.

[dawn53]

I have a friend who really “played” the game with the cash for clunkers. He had a fairly new Yaris, and an few years older truck. He traded in his Yaris (because it didn’t qualify under the cash for clunkers plan) for a new, greatly discounted but larger truck, then used the cash for clunkers program to trade in his older truck for a new Yaris. Total out of pocket for him was around $8000 (he paid cash) and he had two brand new vehicles...thanks to the government program.

[Lonesome in Massachussets]

The incremental cost was $24,000 per "clunker". The assumption is that most of the cars traded in would have been traded in anyway. They almost certainly would have been, eventually. At best "cash for clunkers" was a policy based on the broken window fallacy.

It's not clear to me that it was a "failure", it was political grandstanding for the boobsies and the boobsies applauded.

[Attention Surplus Disorder]

Yes, but if you redefine “failure” as success, this was a massive win.