10-29-2009, 07:42 AM
Join Date: Nov 2004
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Cash For Clunkers Final Report Card
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)