Auto sales analysts at Edmunds.com say the pricey program resulted in relatively few additional car sales.
NEW YORK (CNNMoney.com) -- A total of 690,000 new vehicles were sold under the Cash for Clunkers program last summer, but only 125,000 of those were vehicles that would not have been sold anyway, according to an analysis released Wednesday by the automotive Web site Edmunds.com...
The Cash for Clunkers program gave car buyers rebates of up to $4,500 if they traded in less fuel-efficient vehicles for new vehicles that met certain fuel economy requirements. A total of $3 billion was allotted for those rebates.
The average rebate was $4,000. But the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009, according to Edmunds.com.
That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales...
Edmunds.com's projection indicates that, without Cash for Clunkers, October's sales increase would be even higher.
Message edited by: Xnarg on 2009-10-29 09:51:50 CDT
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Xnarg said:That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales... No kidding. why 125,000? Why not assume an even smaller number to make the cost per vehicle even higher?
Bloomberg Consumers “are certainly interested” in the program, said Jeremy Anwyl, chief executive officer of research firm Edmunds.com in Santa Monica, California. “But they haven’t read the fine print yet.”
The program isn’t “much of a big deal” for automakers because the $1 billion will only fund about 250,000 in sales, “a drop in the bucket” for an industry that used to sell 16 million a year, Anwyl said in an interview.
.
Message edited by: HumDoHamaraDo on 2009-10-29 10:20:47 CDT
Perhaps all the marketing surrounding the rebate got others to think about trading in as well, prompting them to do so even though their vehicle didnt qualify for the rebate. That would mean that the rebate resulted in 1-million cars being traded in, making the cost only $3k per vehicle......
If you look at annual vehicle sales, it's not an unreasonable projection of the difference between cars that would have been sold w/o the incentive versus sold with the incentive. So I don't really think the calculation is bad - but it doesn't change the $3 billion bill that my kids got - it's still $3 billion.
I don't buy the "without Cash for Clunkers, October's sales increase would be even higher." - how can an incentive be a disincentive?
Regardless, I don't need any sort of tailored statistics need to be given to me to think any less of the pile of garbage this program was.
nycll said:Xnarg said:That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales... No kidding. why 125,000? Why not assume an even smaller number to make the cost per vehicle even higher?
I know we should just take goverments word, and not do any anyalsis of their spending programs.
michal1980 said:nycll said:Xnarg said:That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales... No kidding. why 125,000? Why not assume an even smaller number to make the cost per vehicle even higher?
I know we should just take goverments word, and not do any anyalsis of their spending programs.
Who would dare question such kenysain princples.I was just questioning where the 125,000 number came from. Is that allowed?
nycll said:I was just questioning where the 125,000 number came from. Is that allowed?
It's a number that someone came up with after playing around with historical data most likely.
The fail happens when the report erroneously divides $3 billion by 125,000. This leads the average reader (average) to think that the government actually spent $24,000 per car sold in cash for clunkers. Bad journalism.
It seems like the author might be using historical data for sales - which can't be used since this recession was unlike anything the majority of the people have lived through. Can we assume that the historical sales from the past 5, 10, 20 be reliable for 2009? When cars sales are down to historic levels?
michal1980 said:SUCKISSTAPLES said:another case of media playing with #s to mak it seem more SENSATIONAL
They estimated only 1/6 of the purchases wouldnt have been purchased anyway to come up woth the $24,000 per car madeup figure.
I can estimate only 1/20 of the purchases wouldnt have happened anyway and say it cost taxpayers $90,000 per car. BS
Ahh so now Edmunds is BS, before it was seeking alpha now its Edmunds.
I geuss the only true source for costs and benefits is what the Goverment tells us.
Because everyone outside of goverment is BSing.Its not where the conclusions comes from. Its that the conclusions are based solely on biased assumptions of what "might" have happened, yet presented as fact. As the responses in this thread show, estimations can vary wildly but be just as 'valid'.
I trust the analysis by Edumunds_ more than I value the significance of the current GDP growth figures, which are primarily related to increases in government spending rather than any actual economic growth in terms of consumer and business spending or investment.
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