Posted on 10/28/2009 5:49:53 PM PDT by Son House
American taxpayers paid a lot of cash for those clunkers: $24,000 for each new car sold, according to a study released Wednesday.
The government could have done almost as well by just giving away cars for free, instead of creating an elaborate incentive program, according to an analysis by the automotive information firm Edmunds.com in Santa Monica, Calif.
... to look at how many people purchased cars that otherwise wouldn’t have been bought. The firm says that number is about 125,000 cars. By that measure, the government spent $24,000 to generate each sale of a new car.
In all, the government spent $3 billion on a program that provided cash toward 690,000 car purchases – about $4,348 per car. That makes 565,000 people who got as much as $4,500 to buy a car they would have bought anyway, according to the Edmunds analysis.
The analysis may dampen views about the effectiveness of a one of the most visible pieces of President Obama’s $787 economic stimulus package, designed to save jobs across the US.
Edmunds’ used a team of statisticians, who examined sales trends for luxury vehicles and others not included in the clunker program. They used those trends to gauge where sales would have been for the industry, absent any stimulus program. These “informed estimates” were independently verified, Edmunds says, by examining transaction data.
Critics of government stimulus programs say they often simply move money from one pocket to another, or perhaps shift the timing of consumer spending, without having a large impact on gross domestic product (GDP).
Jeremy Anwyl, chief executive of Edmunds, says the firm’s study points to one promising conclusion about the economy: Auto sales were already rising from their recession trough even without the clunker program, though they remain well below their pre-recession levels.
(Excerpt) Read more at features.csmonitor.com ...
I bought a 2009 Yamaha V Star 1300 Tourer.
The clunkers 15 mins of fame is over...
Seems to be no limit on the car sales gimmicks as long as it isn’t the car companies that have to pay for them!
and I fully expect 20% to be repo’d once people can’t make payments..then they’re really in a pickle since they MAY have traded in a PAID FOR clunker, now they have NO wheels and will cry for a bailout from the gov’t...
IMHO..
I believe their estimates of the costs of the health care bills they are trying to pass, too!
nice bike..
Of course, this study does not address the higher default rate on cars purchased under the CARS program. Another small ‘problem’ of the Obama intelligensia that designed this scheme.
Of course, this study does not address the higher default rate on cars purchased under the CARS program. Another small ‘problem’ of the Obama intelligensia that designed this scheme.
I bought a Ford Hybrid Escape. Didn’t bother with the C4C program though...my old car didn’t qualify, and the red tape was a nightmare for the dealer.
Cash for Clunkers, the Am track of the open highway.
On the face of it, borrowing from the Chinese in order to buy cars from the Japanese seems like a very, very stupid idea.
This just confirms the hypothesis.
Where is my discount damn it!
for a very, very short second, I thought about trading my truck for a new one with the clunkers program..but I didn’t because I was fearful of my employment situation..my fears came true, I was laid off (but have a good bite already) and I just put the payoff on my truck in the mail..
That’s one truck payment back in pocket at the right time...
Also, IIRC, a some of the cars traded in were actually worth more than $4500, AND dealers didn’t discount as much during the program. So, some people probably ended up paying just as much as they would have without the program.
I'll take a 1967 Corvette Convertible. 435 hp 427 cu.in. V8. Black on black on black.
Tagline!
That’s good!
Thanks I like your tagline too!
Another example of the government adding value to all that they do.
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