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Cash For Clunkers Cost $24K Per Car

A press release from the car site, Edmunds:

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

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 industry’s recovery is gaining momentum." …

"Our research indicates that without the Cash for Clunkers program, many customers would not have traded in an old vehicle when making a new purchase," Edmunds.com Senior Analyst David Tompkins, PhD told AutoObserver.com. "That may give some credence to the environmental claims, but unfortunately the economic claims have been rendered quite weak."

To conduct the analysis, the Edmunds.com team of PhDs and statisticians examined the sales trend for luxury vehicles and others not included in Cash for Clunkers, and applied the historic relationship of those vehicles to total SAAR to make informed estimates. These estimates were independently verified through careful examination of sales patterns reflected by transaction data. Once the numbers were determined, Edmunds.com’s analysts divided three billion dollars by 125,000 vehicles to arrive at the average $24,000 per vehicle

In other words, it was all a waste of taxpayer dollars.

The overwhelming majority of these new cars would have been bought anyway. At most, it just moved the sales forward a few weeks.

And the 125,000 that might not have been, were all but paid for by you and me. (The average price of the new cars being $26,915 – $1,667 = $25,248.)

But what’s $3,000,000,000 among friends?

By the way, we searched the official government site for the ‘Cash For Clunkers’ program (CARS.gov) and did not find one mention of the term "taxpayers."

Isn’t that odd?

(Thanks to NickB for the heads up.)

This article was posted by Steve on Thursday, October 29th, 2009. Comments are currently closed.

6 Responses to “Cash For Clunkers Cost $24K Per Car”

  1. proreason says:

    Cash for Clunkers is the most successful government program since Medicare. (you know, the one that is scheduled to bring down the entire country if Obamycare can’t do it quicker).

    It’s all in the marketing baby, all in the marketing.

  2. Rusty Shackleford says:

    In other words, it was all a waste of taxpayer dollars.

    Yup, Steve, that pretty much says it all. But try to impress upon the less than 50% of the nation that thinks it was a good idea. They are the people who drive faster when the tank is low so they don’t run out of gas before they find a gas station. The people who say “I can’t be out of money, I still have checks left”.

    This news is a clear example of why math skills need to be taught in school instead of feel-good social engineering subjects.

  3. BannedbytheTaliban says:

    Of course it isn’t odd SG. Government money doesn’t come from taxpayers, it is manna from heaven.

  4. ilzito guacamolito says:

    Annual salary for senators and congressmen effective January 1, 2008 was $169,300. Now THAT is cash for clunkers.

  5. wardmama4 says:

    Banned – get with the program (I heard it direct from Detroit) – It’s Obama’s stash, in his pockets.

    I want to weep about how stupid people are – can’t even blame the school system as I remember a joke Johnny Carson told ages ago –

    ‘What do you think about Red China?’ –
    “It clashes with the silverware.”

    It is sad that we haven’t improved in 30 odd years, Stuck On Stupid – Indeed.

  6. VMAN says:

    Next year is when the real “cash for clunkers” kicks in. We’ll get rid of all the “clunkers” in the government and we’ll all make a lot more cash.

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