Clunkers math: Taxpayers paid $24,000 per car

[bcarroll]

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 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.

http://money.cnn.com/2009/10/28/auto...ion=2009102816

[ivankaramazov]

Loud noises!

[UltraShy]

Gee, I seem to recall somebody who strongly opposed this program when it was first proposed and complained very loudly about how stupid it was on SAS. This guy was so mad that he wrote his US senators & US Rep to tell them to oppose it.

This guy's name was Karl -- you might know him as UltraShy.

[Jnmcda0]

I know a guy who was looking to buy a new car, but his current car didn't qualify and would only get $1500 or so on a regular trade in, so he went out and bought an old car that met the cash for clunkers criteria for about $500 and immediately turned around and traded it in for $4500.

[stylicho]

Originally Posted by Jnmcda0

I know a guy who was looking to buy a new car, but his current car didn't qualify and would only get $1500 or so on a regular trade in, so he went out and bought an old car that met the cash for clunkers criteria for about $500 and immediately turned around and traded it in for $4500.

I smell b*#'+ s¤'-. You had to have the car in your name for a minimum of one year to participate.

[stylicho]

Originally Posted by bcarroll

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 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.

http://money.cnn.com/2009/10/28/auto...ion=2009102816

What's the point of the article? I don't understand what they are getting to. I never knew the purpose of the program was to sell cars that were never going to be sold. I thought the purpose of the program was to put more fuel effecient vehicles on the road.

[stylicho]

Originally Posted by UltraShy

Gee, I seem to recall somebody who strongly opposed this program when it was first proposed and complained very loudly about how stupid it was on SAS. This guy was so mad that he wrote his US senators & US Rep to tell them to oppose it.

This guy's name was Karl -- you might know him as UltraShy.

I constantly perused the wisconsin times and milwaukees best for editorials from you complaining about the bank bailout but I never found it. Did you write the editorial in another paper?

[Jnmcda0]

Originally Posted by stylicho

I smell b*#'+ s¤'-. You had to have the car in your name for a minimum of one year to participate.

That's the story I was told (or at least how I remember it). If it is the case that you had to have the car for a year, then either he was full of it or I misunderstood what he was saying.

[drealm]

Obamanomics at it's best.

[pokeherpro]

Originally Posted by drealm

Obamanomics at it's best.

...according to this websites analysis. Does that make it right? Where did they get their numbers? And like another person said, I'm pretty sure Obama wasn't doing this to make or save money short term, it's a long term thing that helps people with old vehicles afford newer ones.

[WineKitty]

Originally Posted by pokeherpro

...according to this websites analysis. Does that make it right? Where did they get their numbers? And like another person said, I'm pretty sure Obama wasn't doing this to make or save money short term, it's a long term thing that helps people with old vehicles afford newer ones.

My thoughts exactly. I dont hold this article as the gospel truth as far as their "stats" are concerned. Sadly, people are going to read that headline and take it as gospel.

Here is the chart:
http://www.edmunds.com/help/about/pr...6/article.html

From that chart,
Jan-Jun average monthly volume = 799,279 units
Jul-Sep average monthly volume = 999,443 units

200K units incremental per month x 3 months = 600K units incremental

$3B/600K = $5k/vehicle

[drealm]

Originally Posted by pokeherpro

...according to this websites analysis. Does that make it right? Where did they get their numbers? And like another person said, I'm pretty sure Obama wasn't doing this to make or save money short term, it's a long term thing that helps people with old vehicles afford newer ones.

Well the program was only a couple months long, so I'd say it was fairly short term. And I don't think encouraging people to buy cars they can't afford in the first place, which will be repossessed in a year's time, due to defaulting payments, is helping anyone get new cars.

But I don't agree with the program to begin with, so it's pretty irrelevant to me whether the program is a success or not in mr lip flapper's eyes.

[UltraShy]

Originally Posted by stylicho

I constantly perused the wisconsin times and milwaukees best for editorials from you complaining about the bank bailout but I never found it. Did you write the editorial in another paper?

I've never submitted any editorials to the Wisconsin Times nor Milwaukee's Best, largely because till just now I'd never even heard of those papers. I will be sure to keep them in mind for future editorials and I thank you for providing me with ideas on other options for where I can submit my views for publication.

Just because I fail to write an editorial on a subject does not mean that I approve of it. I have a whole laundry list of subjects to address in editorials and, unfortunately, I'm only human and unable to cover every issue that I'd like to. And not every editorial I submit gets published, and even when they are, papers put limits on how often one can be published. It's ever 2 months for the Milwaukee Journal, that rejects a majority of my submissions (presumably in part because they must get a lot being the largest paper in the state). The Capital Times (in Madison) seems to publish virtually everything I submit, though they limit writers to one editorial every two weeks.

I encourage you (or anyone else) to search for SAS posts in which I advocate bank bailouts. You won't find any, but I will not be insulted if you do such a search instead of simply taking my word for it. As a skeptic, I fully understand the need to verify, so have fun looking.

[UltraShy]

Originally Posted by Jnmcda0

he went out and bought an old car that met the cash for clunkers criteria for about $500 and immediately turned around and traded it in for $4500.

Before this program began I made the obvious point that the only people who'd take advantage of it were those driving hunks of junk that had a fair market value of less than $4,500.

After all, if your car could be sold for $8,000 on the private market there is no way you'd sell it to the government for a lesser amount. The government ending up paying $4,500 for trade-ins that could have been worth as little as $50 (or whatever a scrap car is worth to a junk yard now). I believe the only standard was the junker actually had to run, which sets the bar pretty low. My brother scrapped a car (years ago) that could do only 40 mph on the highway with the pedal to the metal, so it technically ran.

Most folks driving such a total hunk of junk couldn't afford a new car so this program would mean nothing to them. My brother was an extreme oddity in being a millionaire who drove a car that was worth nothing more than salvage value to a junk yard.

[pokeherpro]

Originally Posted by drealm

Well the program was only a couple months long, so I'd say it was fairly short term. And I don't think encouraging people to buy cars they can't afford in the first place, which will be repossessed in a year's time, due to defaulting payments, is helping anyone get new cars.

But I don't agree with the program to begin with, so it's pretty irrelevant to me whether the program is a success or not in mr lip flapper's eyes.

You just completely generalized a group of how many hundreds of thousands of people? They're all going to do that? Lol. Don't be a sensationalist.

[stylicho]

Originally Posted by UltraShy

Most folks driving such a total hunk of junk couldn't afford a new car so this program would mean nothing to them. My brother was an extreme oddity in being a millionaire who drove a car that was worth nothing more than salvage value to a junk yard.

I dont know if that's true. I have a 97 dodge intrepid and I can afford to go buy a better car right now. But what's the point. I change the oil regularly and tune it up on a timely basis so Im hoping to get 200,000 miles out of it. Sam Walton drove a beat up pick up truck and he was a billionaire. Another thing, when you take 4500 dollars off the cost of the vehicle the price you pay per month drops. Especially if the car wasnt too expensive to begin with. So perhaps they couldnt afford the vehicle at initial cost but can now.

[stylicho]

Originally Posted by UltraShy

I've never submitted any editorials to the Wisconsin Times nor Milwaukee's Best, largely because till just now I'd never even heard of those papers. I will be sure to keep them in mind for future editorials and I thank you for providing me with ideas on other options for where I can submit my views for publication.

Just because I fail to write an editorial on a subject does not mean that I approve of it. I have a whole laundry list of subjects to address in editorials and, unfortunately, I'm only human and unable to cover every issue that I'd like to. And not every editorial I submit gets published, and even when they are, papers put limits on how often one can be published. It's ever 2 months for the Milwaukee Journal, that rejects a majority of my submissions (presumably in part because they must get a lot being the largest paper in the state). The Capital Times (in Madison) seems to publish virtually everything I submit, though they limit writers to one editorial every two weeks.

I encourage you (or anyone else) to search for SAS posts in which I advocate bank bailouts. You won't find any, but I will not be insulted if you do such a search instead of simply taking my word for it. As a skeptic, I fully understand the need to verify, so have fun looking.

I quite remember you saying on sas that economists had stated the bailout of the banks was necessary and you were for such a policy.

[drealm]

Originally Posted by pokeherpro

You just completely generalized a group of how many hundreds of thousands of people? They're all going to do that? Lol. Don't be a sensationalist.

If they needed a government credit and didn't pay in cash then obviously they don't have the money. This scenario isn't an anomaly, it's a recent pattern. We only need to look to the past to find similar symptoms.

But like I said, it's success isn't relevant to me. I think it inherently did more harm to everyone, including car buyers, than good.

[WineKitty]

Originally Posted by stylicho

I quite remember you saying on sas that economists had stated the bailout of the banks was necessary and you were for such a policy.

Are you sure Karl said that?? That doesnt sound like the Karl I know and love.

[stylicho]

Originally Posted by WineKitty

Are you sure Karl said that?? That doesnt sound like the Karl I know and love.

Quite sure. This was when the Dow was hovering between 6 and 7 thousand.