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Old 10-29-2009, 07:42 AM   #1
AVANTI R5
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Default Cash For Clunkers Final Report Card

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This summer's so-called Cash for Clunkers program cost taxpayers $24,000 per vehicle sold,



according to an analysis by Edmunds.com.

Nearly 690,000 vehicles were sold during the Cash for Clunkers program, officially known as the Car Allowance Rebate System (CARS), but Edmunds.com analysts indicate that only 125,000 of the sales were incremental. The rest of the sales would have happened anyway.

Analysts divided three billion dollars by 125,000 vehicles to arrive at the average $24,000 per vehicle sold. The average transaction price in August was $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, Anwyl pointed out, 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," he said.

Edmunds.com's research further indicates that without Cash for Clunkers, many customers would not have traded in their old vehicles.

"That may give some credence to the environmental claims, but unfortunately the economic claims have been rendered quite weak," said Edmunds.com Senior Analyst David Tompkins, PhD.

The below chart sets forth actual SAAR (Seasonally Adjusted Annual Rate) compared to the forecasted rate if the program had never been put into practice.

Sales Impact of Cash for Clunkers
(GRAPH HERE, Go to link)
http://www.autoobserver.com/2009/10/...ayer-cash.html
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Old 10-29-2009, 08:35 AM   #2
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i really wish they would explain beyond just the SAAR table they provided to show us how they got to the 125k number. it seems more like 167k to me.

SAAR difference / 12 = impact of cash for clunkers.
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Old 10-29-2009, 08:49 PM   #3
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Thats BS math if i've ever seen it...
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Old 10-29-2009, 09:45 PM   #4
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It's not just fuzzy math, it's fuzzy logic too.

I'd really love to see the actual questions they asked. Nobody would argue that 'not buying' is never blamed on the program. But there are many reasons people bought cars. Also, just buying or not buying isn't the only purpose here. If there was momentum created, or even just making people buy early could save jobs, prevent plants from idling, etc.

People said they would have bought one anyway. "Okay, when?" should be the next question, because an answer of "Probably soon" should disqualify them.

If you only count the people who said I wouldn't have bought without the incentive, you completely bias the survey because you've thrown out all the 'yes. soon...i think...oh, in the next few months...maybe...' people.

Since cars aren't an impulse decision and we're money-strapped as a Country, it's inevitable that most people who bought were already in the probably category. But that doesn't mean they wouldn't give credit to the program. Maybe they would have been turned down for financing on a higher amount. Maybe they would have gotten to the dealership and gotten sticker shock.

This article is a non-statement. 30% off my favorite hamburger joint would probably make me go out for dinner instead of cook like i planned. Realizing a coupon had expired would make me turn around and go home. I don't shop for cars like that. Where's the surprise in that?
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Old 10-30-2009, 05:05 AM   #5
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Any economist worth his salt will tell you that selling 565,000 cars in the summer is much different that selling those same half-million cars over the course of the following year (or whatever timeline you want to project). The 125,000 'extra' sales is really only part of the story.
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Old 10-30-2009, 12:51 PM   #6
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Default White House, Edmunds in war of words over 'clunkers

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he White House said the influential automotive news Web site Edmunds.com's harsh analysis of the impact of "cash for clunkers" was "faulty" and "implausible." Edmunds CEO Jeremy Anwyl shot back that the White House was "shooting the messenger."

Edmunds said cash for clunkers cost taxpayers $24,000 per vehicle sold.

Nearly 690,000 vehicles were sold during the $3 billion cash for clunkers program that offered up to $4,500 rebates, officially known as the Car Allowance Rebate System, but Edmunds.com analysts calculated that only 125,000 of the sales occurred as a result of the program.

Edmunds is clearly among the more pessimistic about the program's impact.

The White House, in a report in September, said it believed 440,000 were incremental sales -- though it could be as high as 560,000 under its most optimistic scenario.

Ford Motor Co. said in August it believed 30 to 40 percent of clunkers sales were "truly incremental" -- which would translate to an industry increase of 210,000 to 280,000.
Moody's said 60 percent were incremental, while General Motors estimated it about was 500,000. As observers pointed out, Edmunds has been skeptical of the program since the summer. In June, Edmunds called it a "non-event" and said cash for clunkers "will struggle to produce the estimated 250,000 vehicle sales."

In fact the program sold nearly that many vehicles in the program's first week.

Edmunds.com's "faulty analysis suggesting that the cash for clunkers program had no meaningful impact on our economy or on overall auto sales. This is the latest of several critical 'analyses' of the cash for clunkers program from Edmunds.com, which appear designed to grab headlines and get coverage on cable TV," the White House said on its blog Thursday afternoon. "Like many of their previous attempts, this latest claim doesn't withstand even basic scrutiny."
The White House said Edmunds based its analysis on the "implausible" assumption that "the market for cars that didn't qualify for cash for clunkers was completely unaffected by this program. In other words, all the other cars were being sold on Mars, while the rest of the country was caught up in the excitement of the cash for clunkers program."

The administration also said Edmunds didn't account for the "beneficial impact" the program will have on fourth-quarter Gross National Product because automakers have ramped up their production to rebuild their depleted inventories.

"Most importantly, this program is helping boost our economy and create jobs now when we need it most. In a comprehensive report, the Council of Economic Advisers estimated that cash for clunkers will create 70,000 jobs in the second half of 2009," the White House said.

"Edmunds.com, on the other hand, is promoting a bombastic press release without any public access to their underlying analysis."

Edmunds stands by its analysis.

"Instead of shooting the messenger, government officials should take heart from the core message of the analysis: The fundamentals of the auto marketplace are improving faster than the current sales numbers suggest," Anwyl wrote.

The central issue, Anwyl said, "is how many of these sales would have occurred anyway. Apparently, the $24,000 figure caught many by surprise. It shouldn't have. The truth is that consumer incentive programs are always hugely expensive when calculated by incremental sales -- always in the tens of thousands of dollars."

Edmunds rejected the White House suggestion that people got caught up in the excitement of the program and bought cars, even if they didn't qualify. And it discarded the notion that automakers boosted production solely because of the program.

"No manufacturer increases production, a decision with long-term consequences, based on the 30-day sales blip triggered by an event like cash for clunkers," Edmunds wrote.
The White House got a boost from Mike Jackson, chairman and CEO of AutoNation.

While Edmunds is usually highly respected within the automotive industry for its accuracy and reliability, he said, its analysis of the cash for clunkers program is "shoddy."
"Simply put, they've misrepresented the facts, and the White House is completely justified in calling them out on it," Jackson said, adding that it appears "Edmunds' political views have tainted their usual rigorous approach to research."

"I know from our sales at AutoNation just how significant the impact of the cash for clunkers promotion was in our dealerships, and our own internal figures indicate that the rate of increase was consistent with what other retailers, manufacturers and governmental agencies have been estimating," he said.

"We believe that the incremental sales are over 500,000 new vehicles. Edmunds may not want to believe Ford or General Motors or Moody's or the White House or any of the dozens of other reliable parties who saw significant sales increases as a direct and indirect result of the program, but that doesn't make the increases any less real."
http://www.detnews.com/article/20091...491/1148/rss25
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Old 10-30-2009, 01:18 PM   #7
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Based on this costing the average taxpayer $3 billion to give $2billion for a clunkers what do you think Govt health care will cost?
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Old 04-07-2010, 10:45 AM   #8
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So did it work?

http://www.whitehouse.gov/blog/2010/...-work-intended

Quote:
On June 24, 2009, President Obama signed into law the Car Allowance Rebate System (CARS, commonly known as 'Cash-For-Clunkers'), one of several stimulus programs whose purpose was to shift expenditures by households, businesses, and governments from future periods when the economy is likely to be stronger, to the present when the economy has an abundance of unemployed resources that can be put to work at low net economic cost.

Critics of the CARS program argued that it would have little ultimate effect because most of the purchases under the program would have happened soon anyway - they were merely 'pulled forward' from the following few months. In contrast, the CEA's September 10 economic analysis of the program argued that a substantial proportion of the CARS sales were pulled forward from a far more distant future, and thus represented an important increment to aggregate demand at just the time when such demand was sorely needed.

With seven months of post-Clunkers sales data in hand (September 2009 through March 2010; see dark blue line in figure), now seems a good time for a reckoning.

...

According to a survey conducted by the Department of Transportation as part of the program, the average timeframe over which new car purchasers said they would have otherwise sold, traded in, or disposed of their old vehicle was 2.87 years - far longer than the timeframe of a few months that the program's critics hypothesized. A plausible interpretation of the available data, in fact, is that many of the CARS sales were to the kinds of thrifty people who can afford to buy a new car but normally wait until the old one is thoroughly worn out. Stimulating spending by such people is very nearly the best possible countercylical fiscal policy in an economy suffering from temporarily low aggregate demand.


CN: Yes, it worked.
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Old 04-07-2010, 11:29 AM   #9
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of course the whitehouse is going to say it worked lol
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Old 04-07-2010, 01:27 PM   #10
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Wait till you see how much you will pay for free health care insurance.
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Old 04-07-2010, 04:40 PM   #11
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From the graph, it does look like it worked really well.
The real question is did it have any long term positive effect on the economy. There was no doubt that the initiative did lift the auto industry during the dark ages of 2009. But was the bang for the buck good enough, or would we have been just fine by doing nothing.
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Old 04-07-2010, 05:57 PM   #12
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Quote:
Originally Posted by antifozy View Post
From the graph, it does look like it worked really well.
The real question is did it have any long term positive effect on the economy. There was no doubt that the initiative did lift the auto industry during the dark ages of 2009. But was the bang for the buck good enough, or would we have been just fine by doing nothing.
That is exactly the right question to ask. Combined with long term savings in gas purchases.
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Old 04-07-2010, 06:15 PM   #13
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Wait till you see how much you will pay for free health care insurance.
That's right. With Obama running this country straight to hell and turning us into the USSR we'll start seeing massive lines at hospitals and you can kiss grandma goodbye. Just look at cash for clunkers, it's a massive fail and it's the same as what's going to happen with the new nuclear policy and socialized medicine with doctors going on strike.

I WANT MY FREEDOM. Damn socialist commies have won the war after all.
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Old 04-07-2010, 06:23 PM   #14
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I'm surprised that the whitehouse would actually take the time to try and rebut Edmunds.
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Old 04-07-2010, 10:58 PM   #15
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Originally Posted by industrial View Post
That's right. With Obama running this country straight to hell and turning us into the USSR we'll start seeing massive lines at hospitals and you can kiss grandma goodbye. Just look at cash for clunkers, it's a massive fail and it's the same as what's going to happen with the new nuclear policy and socialized medicine with doctors going on strike.

I WANT MY FREEDOM. Damn socialist commies have won the war after all.
The sad thing about these times is that I can't tell whether or not this author is being facetious.
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Old 04-07-2010, 11:03 PM   #16
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Originally Posted by Masterauto View Post
Wait till you see how much you will pay for free health care insurance.
Quote:
Originally Posted by industrial View Post
That's right. With Obama running this country straight to hell and turning us into the USSR we'll start seeing massive lines at hospitals and you can kiss grandma goodbye. Just look at cash for clunkers, it's a massive fail and it's the same as what's going to happen with the new nuclear policy and socialized medicine with doctors going on strike.

I WANT MY FREEDOM. Damn socialist commies have won the war after all.
couldn't agree more
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Old 04-07-2010, 11:20 PM   #17
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I heard Obama's next plan will be called "Cash for Geezers", where he pays old people to voluntarily kill themselves as not to be a burden to the Medicare and Social Security system.
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Old 04-07-2010, 11:42 PM   #18
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Originally Posted by Eyeflyistheeye View Post
I heard Obama's next plan will be called "Cash for Geezers", where he pays old people to voluntarily kill themselves as not to be a burden to the Medicare and Social Security system.
Soylent Green is made of PEOPLE!!
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Old 04-07-2010, 11:50 PM   #19
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lol @ eyefly and industrial. Fish on the line!
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Old 04-07-2010, 11:55 PM   #20
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Originally Posted by Eyeflyistheeye View Post
I heard Obama's next plan will be called "Cash for Geezers", where he pays old people to voluntarily kill themselves as not to be a burden to the Medicare and Social Security system.
http://memory-alpha.org/en/wiki/Resolution
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Old 04-08-2010, 02:30 AM   #21
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Soylent Green is made of PEOPLE!!
But it's aged to perfection!
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Old 04-08-2010, 11:00 AM   #22
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But it's aged to perfection!
I don't want to eat your goddamn hippy organtic cafe food. Give me a goddamn good old american burger, with american cheese, wrapped in applewood bacon, covered in chocolate, dipped in bourbon batter, deep fried in lard and brushed with BBQ sauce.
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Old 04-08-2010, 11:11 AM   #23
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"Cash for Geezers" ...... OMG i'm freakin dying here!
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Old 04-08-2010, 01:20 PM   #24
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Originally Posted by industrial View Post
I don't want to eat your goddamn hippy organtic cafe food. Give me a goddamn good old american burger, with american cheese, wrapped in applewood bacon, covered in chocolate, dipped in bourbon batter, deep fried in lard and brushed with BBQ sauce.
You forgot to roll it in Wonder Bread crumbs and drizzle Velveeta over the top.
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Old 04-08-2010, 01:48 PM   #25
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Originally Posted by industrial View Post
I don't want to eat your goddamn hippy organtic cafe food. Give me a goddamn good old american burger, with american cheese, wrapped in applewood bacon, covered in chocolate, dipped in bourbon batter, deep fried in lard and brushed with BBQ sauce.
and a diet coke
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