If the program cost $24,000 per car and the max payout per car was $7,500 if I remember, where did the $17,500 go?
What they mean is that only a small portion of the car sales were “stimulated” by CfC. Without that payout, those (few) sales would not have occurred. The vast majority of sales were to folks who would have bought soon anyhow, so the CfC money just sweetened the deal they already planned to make.
So, if you spread the cost of the program over the number of sales that would otherwise not have been made, it comes out to $24,000 per sale.
Cars that would have sold anyway, without the govt funds.
Plus Overhead... who knows?
Total $$ of incentives)/(incremental car sales over those that would have been bought without the incentive)
In other words, people who were going to buy a car without any incentive received an incentive even though they were going to buy a new car anyway. Those $$ did nothing to increase car sales.
The cost of a real brought forward car purchase is a major multiple of the incentive plus it takes sales from the next quarter. Most sales people know that end of quarter discounts mean that they are going to be behind the 8 ball in the first month or so of the next quarter. Incentives only work where there is significant pent up demand and/or there is a possibility of shifting the entire demand curve to the right.
The presumed goal was to drive sales to more efficient vehicles. However, the savings from increased fuel efficiency of a newer vehicle are of marginal value. For someone driving 12000 miles per year, the difference between 20 and 30 mpg amounts to 200 gallons of gas per year or between $400 and $600. Taxes on a new $15000 car in Massachusetts are $750 plus the increase in excise taxes plus immediate 30% depreciation!! People are not as stupid as the government “experts” think we are.
N.B. Note that if you drove more miles per year the savings would be greater -— BUT you would probably have to buy a reliable car sooner anyway.
I have a rule of thumb that 10% of any population are really gullible (higher if you are a greenie). The Edmund’s analysis indicates that I am just about right.
This is another really, really stupid “green inspired” policy. I am betting that the suckers (i.e., those lured into buying a vehicle by the incentive) were primarily tree-huggers.