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Cash for Clunkers

Consumer Assistance Recycle and Save Act of 2009

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"Cash for Clunkers" wound up costing American taxpayers $24,000 per unit. Such a deal!

  • Oct 29, 2009
Rating:
-3
Edmunds.com is a website that bills itself as "the premier resource for online automotive information."   Edmunds.com  is by no stretch of the imagination a political organization and therefore has no axe to grind here.   Edmunds has just completed an exhaustive analysis of the federal government's "Cash For Clunkers" program which ran for several weeks this past summer.  You can find the complete report in the wiki or by going to edmunds.com.  The results will certainly not come as any surprise to anyone who reads or has an even rudimentary understanding of economics and how government works.  It turns out that the "Cash for Clunkers" program wound up costing you Mr. & Mrs. Taxpayer an astounding $24,000 per unit!  Think about that for a moment.  $24,000 per car for a program that was offering car buyers up to $4,500 in cash rebates for participating in the program.  And unlike similar programs undertaken in other nations the Obama program did not require that qualifying vehicles be American made"Cash for Clunkers" is the poster child for economic inefficiency  which can be defined as "a situation in which society's resources are"misallocated".   I don't know about you but I am shocked.

Meanwhile, the Edmunds analysis concludes that while some 690,000 vehicles were sold during the "Cash for Clunkers" program "only 125,000 of the sales were incremental.  The rest of the sales would have happened anyway regardless of the program."   So just how did Edmunds come up with this $24,000 figure?  It is quite simple really.  "Cash for Clunkers" cost the federal government some three billion dollars.   Simply divide three billion by the 125,000 cars that were sold because of the program and you arrive at $24,000.  Yet another brilliant idea from the Obama administration and the folks who want to run health care in this country!  

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More Cash for Clunkers reviews
Quick Tip by . May 06, 2010
posted in Public Policy
Cash for clunkers: another genius idea from our leaders (aka dimwitted, professional panderers).
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Wiki

The Consumer Assistance Recycle and Save Act of 2009, or “Cash for Clunkers” is a program designed to get gas hogs and heavy polluters off the road and stimulate new car sales. The federal government is going to provide a voucher of up to $4,500 to the dealer to help reduce the cost of the new car by that amount. It even extends to leases.

Cash for Clunkers Results Finally In: Taxpayers Paid $24,000 per Vehicle Sold, Reports Edmunds.com

SANTA MONICA, Calif. — October 28, 2009 — Edmunds.com, the premier resource for online automotive information, has determined that Cash for Clunkers cost taxpayers $24,000 per vehicle sold.

Nearly 690,000 vehicles were sold during the Cash for Clunkers program, officially known as CARS, but Edmunds.com analysts calculated that only 125,000 of the sales were incremental. The rest of the sales would have happened anyway, regardless of the existence of the program.

Ironically, the average transaction price for a new vehicle in August 2009 was only $26,915 minus an average cash rebate of $1,667.

"This analysis is valuable for two reasons," explained Edmunds.com CEO Jeremy Anwyl. "First, it can form the basis for a complete assessment of the program's impact and costs. Second—and more important—it can help us to understand the true state of auto sales and the economy. For example, October sales are up, but without Cash for Clunkers, sales would have been even better. This suggests that the ...

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