Taxpayers' real cost of Cash for Clunkers: $24,000 a car

[SAmadei]

The program, which cost taxpayers $3 billion, gave car buyers up to $4,500 in incentives to trade in their gas-guzzling clunkers to buy new fuel thrifty cars. It was intended primarily to spur sales, and the economy.

But Edmunds.com says a lot of those sales would have happened anyway, with or without the clunkers program. Of more than 690,000 vehicles sold, only about 125,000 of the sales were entirely due to the government's added inducement, Edmunds.com says. The rest of buyers just got lucky by getting the government to kick cash into deals that they would have proceeded with anyhow. When the cost of the program is spread over just those extra incremental sales, the total is $24,000 per vehicle.

That's just about $2,000 shy of the average amount paid for a new car by buyers in August, $26,915.

Full Article

[Drew Dowdell]

This won't take long to get moved into Politics.....

Edmunds, how do you know that those sales "that would have happened anyway" sold the original car the customer was shopping for? If someone looking to trade in an old Explorer was out shopping for another Explorer, but the government incentive got them to buy an Escape or Escape Hybrid instead... then the program worked and your formula is wrong.

[SAmadei]

This won't take long to get moved into Politics.....

I thought the same thing, but I've stayed out of the Politics forum because arguing about politics doesn't really thrill me... (I would prefer to DO something about politics, if I had the time)... so I haven't ever bothered to ask for access... so this was the best spot I could post in.

That said, I hope this can stay above the politics quagmire.

[toesuf94]

This is the problem with ANY government running ANY program - they say it will cost a buck...multiply that buck by 1,000,000. And that is not getting political and choosing a side.

This was a wasteful program from the start and it was bound to have this kind of result. ALL politicians have very little real world experience so they do not understand the REAL costs of living out here in the real world. Further. they are never held accountable for these kinds of overages when they occur...it is not thier money nor does it affect them monetarily.

And I really want to know where Edmunds came up with the remark about 'most of the sales would have occurred anyway' - that seems like a broad stroke of a pen to me...especially in this market.

was this non-political enough?

[balthazar]

Complete unsupported conjecture passed off as 'information'.

[redtruck]

For Edmunds.com to make a claim like this they should show the sales numbers for the months preceding and following the C4C offers. But just stating this point with no sound rational has no basis in fact.

I am sure some people who were considering a new car purchase might have rushed their plans to take advantage of the offer.

With the current rebates on trucks there is more savings now than during the C4C offer.

[Satty]

Probably wouldn't have bought the Jetta if C4C hadn't come around.

[Z-06]

:useless:

Probably wouldn't have bought the Jetta if C4C hadn't come around.

[PurdueGuy]

I'm curious what it cost to run the program - all the computers, staff, paperwork, advertising - how much did that cost per car?

[balthazar]

^ A very legitimate question, & one that the Gov. would never answer.

[pow]

I'm curious what it cost to run the program - all the computers, staff, paperwork, advertising - how much did that cost per car?

Wasn't the program run by the Department of Transportation? It should be interesting to see how NHTSA's administrative budget changed in FY 2009.

[CSpec]

This program was a catastrophic mistake. As other countries have demonstrated, it serves mostly to pull ahead sales that would have have occurred in the near future, and even if it makes an incremental improvement to the nation's average fuel economy, the cost to taxpayers is astronomical. Also, have any dealers actually received a check yet? I would also point out that this government which grossly underestimated the popularity of this program is the same government mulling the popularity of the public option.

[cletus8269]

the program in my mind didnt so much guarantee car sales, to me it sold cars by allowing people to get a trade value for a car that grossly was not worth the amount. like satty said somewhere in another thread, who would have given him $3500-4500 for his trade? not hating but more true number would have been $350-450. my grandparents traded a clean 86 caddy in on their 97 bonneville and the first dealership said they'd be better off selling it private cause they could only give them $500 for it. another dealership offered them 1500 for it so they took that deal instead. one has to wonder if just talking the dealership down enough could have sufficed in most situations...

[Drew Dowdell]

I'm sure that in some cases it influenced an existing purchase decision. Someone who was shopping to trade their Explorer in for a new Explorer getting an Escape Hybrid instead for example.

[A Horse With No Name]

I doubt it was 24K a car.

When gas hits $5 a gallon in a couple of years, people may be sorry they didn't clunk that old explorer.

Chris