| Cash for Clunkers True Cost = 24,000 Per Vehicle.
Posted: 11/2/2009 9:45:55 AM | For those who questioned the effectiveness of the program, according to Edmunds, the true cost of the cash for clunkers program was $24,000 per vehicle.
http://content.usatoday.com/communities/driveon/post/2009/10/620000657/1
Another fine example of govt waste in action.
Comments? | |
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| Cash for Clunkers True Cost = 24,000 Per Vehicle.
Posted: 11/2/2009 10:58:09 AM | "True Cost" is a misleading label. How about "Adjusted Cost"? That is a fairer term for those who are truly seeking the truth.
So, a whole mess of people would have bought cars anyway, eh? In this depressed economy? Or is the economy on the road to recovery after all?
So the people who would have bought cars anyway got a $4500 discount on a new car. Admittedly, the price of new cars went up slightly as a result. So... (largely foreign) car sellers were able to raise prices... and car buyers got a deep discount... sounds like economic stimulus to me...
Wasn't that part of the whole reason behind this?
That foreign car makers reaped much of the benefit just echoes why the gubmint had to take over much of that industry here. | |
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| Cash for Clunkers True Cost = $4,347.88 Per Vehicle.
Posted: 11/2/2009 11:10:36 AM | What a horrible analysis.
The program cost was $3 billion and 690,000 vehicles were turned in. That works out to $4,347.88 per vehicle including all administration expenses.
But the guy from Edmonds claims that only 125,000 vehicles were purchased because of the program, and the rest would have been purchased without the program. With this number it would be $24,000 per vehicle.
Two major issues with how the Edmonds guy came to his figure.
First, you should never assign loss on one sale and apply it to another, that would go completely against GAAP.
So if we use the Edmonds number we could say that 125,000 vehicles were sold because of "Cash for Clunkers" costing $4,347.88 each for a total of $543,485,000, and $2,456,515,000 was wasted on people who would have purchased a vehicle anyways.
But that's not the only problem with Edmonds.
To get the 125,000 figure, the Edmonds guy looked at the sales of vehicles that do not qualify for the program. These vehicles include luxury and commercial.
For some this may seem like a reasonable way to look at how many sales were because of the program. but it is not.
Generally rich people are the slowest to tighten their belts in bad economic times. So this would mean luxury cars should be outpacing cheap cars.
Most companies with large fleets order their vehicles well in advance, and usually have no choice but to purchase the vehicles when needed. So commercial vehicles should see much less of an effect at the start of an economic downturn.
I have to ask why the Edmonds guy made no attempt to compare the sales histories for qualifying vehicles in the months before and after the program compared to monthly sales from years past.
Actually I think I know the answer. It would destroy his very weak argument.
You might not like the program, but Cash for Clunkers was a very successful program that gave American dealerships one of the best months ever in sales and took a lot of old beaters off the roads. | |
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| Cash for Clunkers True Cost = $4,347.88 Per Vehicle.
Posted: 11/2/2009 11:34:10 AM |
You might not like the program, but Cash for Clunkers was a very successful program that gave American dealerships one of the best months ever in sales and took a lot of old beaters off the roads.
One of the precepts of economics that I adhere to is that you have to examine the effects over a period of time. What may be seen as a short term gain, often becomes a long term loss. | |
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| Cash for Clunkers True Cost = $4,347.88 Per Vehicle.
Posted: 11/2/2009 11:41:03 AM | From Edmunds: as reported by: http://www.npr.org/blogs/thetwo-way/2009/10/edmundscom_cash_for_clunkers_a.html
"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. Cash for Clunkers was no exception.
The White House claims that our analysis was based on car sales on Mars and that on Earth, the marketplace is connected. We agree the marketplace is connected. In fact, that is exactly the basis of our analysis.
It is also claimed we missed the possibility that Cash for Clunkers generated excitement and consumers bought vehicles even if they didn't qualify for the program -- a claim that has been widely supported by anecdote but by little analysis. It does, after all, seem a bit odd that masses of consumers would elect to buy a vehicle because of a program for which they don't qualify -- doubly so when you add in the fact that prices shot up during Cash for Clunkers, creating a disincentive to buy.
Finally, the White House claims that the increase in fourth-quarter production reported by the car manufacturers can be attributed to Cash for Clunkers. But here is a better reason: the economy is recovering accompanied by improved car sales. 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.
With all respect to the White House, Edmunds.com thinks that 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.
Isn't this a piece of good news we can all cheer?"
LOL.
What exactly is Edmunds.com's motivation?????
Here come the Obamabots in 3...2..... | |
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| Cash for Clunkers True Cost = $4,347.88 Per Vehicle.
Posted: 11/2/2009 11:48:10 AM |
What may be seen as a short term gain, often becomes a long term loss.
This sums up Reaganomics fairly well. We are living in the long term of decisions made decades ago.
Btw, moving toward better fuel mileage is long term gain. | |
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| Cash for Clunkers True Cost = $4,347.88 Per Vehicle.
Posted: 11/2/2009 11:59:06 AM | | ^^^ My Dodge Dakota with a V8 engine which gets 13mpg according to the epa qualified under the clunkers program. It qualifies to get me a new 2009 Dodge Ram (according to dodge.com) with a engine ranging is size to a 3.7 V6 to a 5.7 V8 4x4 and 4x2 models which get anywhere from 15 to 16 miles per gallon. According to dodge.com. Big increase and a big long term gain. | |
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| Cash for Clunkers True Cost = 24,000 Per Vehicle.
Posted: 11/2/2009 11:59:13 AM | Dang that as much as my mustang cost brand new.
I wonder how many cars that was.
Sounds like it would have been chaeaper if the government would have just given away cards.
Then to top it off, the jobs created cost $250,000 a job. Yep 1/4 of a million dollars per job.
So how can this be helping us when we will paying for all of this for years to come. | |
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| Cash for Clunkers True Cost = 24,000 Per Vehicle.
Posted: 11/2/2009 1:42:19 PM |
What a horrible analysis.
The program cost was $3 billion and 690,000 vehicles were turned in. That works out to $4,347.88 per vehicle including all administration expenses.
But the guy from Edmonds claims that only 125,000 vehicles were purchased because of the program, and the rest would have been purchased without the program. With this number it would be $24,000 per vehicle.
How about we apply this analysis to a couple of Military spending programs.........
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| Cash for Clunkers True Cost = 24,000 Per Vehicle.
Posted: 11/2/2009 2:10:40 PM |
Dang that as much as my mustang cost brand new.
I wonder how many cars that was.
Sounds like it would have been chaeaper if the government would have just given away cards.
Ford seems to think that the clunker program worked
The automaker said Monday earnings were fueled by U.S. market share gains, cost cuts and the Cash for Clunkers program, which drew flocks of buyers to showrooms this summer. Ford's shares rose 53 cents, or 7.6 percent, to $7.53 in afternoon trading.
Then to top it off, the jobs created cost $250,000 a job. Yep 1/4 of a million dollars per job.
Both of your statements contain nothing to prove or disprove the sources, the sources provide no statistical information to show how they arrived at the conclusions.
Enjoy your Mustang | |
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| Cash for Clunkers True Cost = 24,000 Per Vehicle.
Posted: 11/2/2009 8:45:28 PM |
So how can this be helping us when we will paying for all of this for years to come.
What the CARS program did was take a bunch of people and put them (deeper) into debt. I'm sure the bankers and automotive CEOs are happy about this new bailout. | |
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| Cash for Clunkers True Cost = 24,000 Per Vehicle.
Posted: 11/3/2009 3:02:51 AM | Of course, just talking about $$$$ per vehicle ignores the fuel saved to the tune of 9.1 mpg per vehicle, and better air quality due to newer emissions systems.
I've seen estimates that range from the hundreds of millions to just over a billion gallons of gas per year saved. Plus, deadlines got those vehicles on the road quicker than if one just let the market play out. Less fuel used = lower fuel costs in the short term which can also spawn economic development. | |
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| Cash for Clunkers True Cost = 24,000 Per Vehicle.
Posted: 11/3/2009 4:24:16 AM | ^^^But how much fossil fuels were burned up and how much CO2 is sent up into the atmosphere into the production of these more environmentally friendly cars and trucks? We'd have been better off just driving the older "clunkers" and not even building the newer cars and trucks because factories pollute so much.(factories are very bad for air quality) Yes gas will be saved (Which is great). And lets not forget that in this "environmental equation" we have to add in the extra amount of CO2 that was sent into the atmosphere and fossil fuels that were used in the production process of the new cars/trucks and the destruction of the old clunkers. I wonder what that will do to the "estimates that range from the hundreds of millions to just over a billion gallons of gas per year saved" that you read or saw?
The new car/truck had to get better then 2 miles per gallon more then your current car/truck to qualify. How does that exactly stop global warming? Many supporters of this program never want to address a key question and that is---
How much pollution does it take to build that truck or new car? How many miles will a person have to drive in their newer environmentally friendly car/truck to offset the pollution that was made in the production of the new environmentally friendly car/truck when compared to just driving their clunker? And how many miles will a person have to drive in their new car to offset the pollution that was created by the destruction of their old clunker? (Remember the clunkers were destroyed so a lot of fossil fuels were used in the destruction process as well.) And just think of all the plastics and other non biodegradable "toxic" junk that is going into landfills from those clunkers. Plus fossil fuels are also burned in the mining process for metals and they are also burned in the shipping process. So the new car/truck has to offset those CO2 and pollution emissions as well.
Now will a person ever offset the pollution (that was created by building the new more environmentally friendly trucks/cars, and the pollution that was created by destroying the older clunkers (trade in) by driving one of these new cars or trucks? Probably not.Unless you drive it many many miles(but maybe if you bought a high gas mileage hybrid though. But not everyone did that). It takes a lot of energy to produce a new car/truck and it might have been better for the environment to keep driving these "clunkers" and not let the factories pollute the environment by building these new cars and trucks. (since it takes a lot of energy and pollution to make them) but that would have a negative effect for the auto industry. But if your gonna claim that this is better for the environment then these are valid questions to answer.
Is encouraging people to buy new stuff and throwing away old usable stuff good from an environmental point of view? We should try to maximise the usage of our things.
Why destroy those old clunkers anyways? Give them to the poor or to charity. Many poor people could use a older usable car. That older car might help that poor family get ahead in life. | |
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| Cash for Clunkers True Cost = 24,000 Per Vehicle.
Posted: 11/3/2009 7:15:58 AM |
The new car/truck had to get better then 2 miles per gallon more then your current car/truck to qualify.
But I already stated the actual improvement was 9.1 mpg per vehicle. That is not small potatoes.
How much pollution does it take to build that truck or new car?
Roughly 20%-30% of a vehicle's lifetime CO2 is from manufacturing (obviously better mpg plays a big factor here). Steel, copper, etc. get recycled. Obviously there are other pollutants. That said, manufacturer's pollutants are regulated, while most states put few auto pollutant regulations on consumers. | |
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| Cash for Clunkers True Cost = 24,000 Per Vehicle.
Posted: 11/3/2009 7:27:10 AM | .
Why destroy those old clunkers anyways? Give them to the poor or to charity. Many poor people could use a older usable car. That older car might help that poor family get ahead in life.
...........You mean like redistribute the Wealth?
..........Mao did that just after the Long March.... calling it the Great Leap....
It failed and ended up killing the Packard Brand...
Mao was forced to Purge Packard >>>>Studebaker | |
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| Cash for Clunkers True Cost = 24,000 Per Vehicle.
Posted: 11/3/2009 10:47:55 PM | It seems like a kooky program to me on all counts.
Someone needs to send this link to Congress:
Economics in One Lesson -
http://jim.com/econ/
The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.
If this idea was a good one, they should legislate that every car over 5 years old has to go into the crushers and that the only new cars that can be purchased have to get 40 miles to the gallon. That way we'd really get those auto plants humming, increase employment, save the planet, and move onto other things. | |
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| Cash for Clunkers True Cost = 24,000 Per Vehicle.
Posted: 11/4/2009 5:51:14 AM | .
If this idea was a good one, they should legislate that every car over 5 years old has to go into the crushers and that the only new cars that can be purchased have to get 40 miles to the gallon. That way we'd really get those auto plants humming, increase employment, save the planet, and move onto other things.
Isn't that how Japan does it?
You know the Safety inspection that can fail your vehicle for being ugly or having rust...... By the way that inspection costs a Bunch...
By default the MPG would go up....
Are you suggesting a national safety Inspection?
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| Cash for Clunkers True Cost = 24,000 Per Vehicle.
Posted: 11/4/2009 11:52:14 AM |
Isn't that how Japan does it?
You know the Safety inspection that can fail your vehicle for being ugly or having rust...... By the way that inspection costs a Bunch...
By default the MPG would go up....
Are you suggesting a national safety Inspection?
NOOOOOOOOOOOOOO. We need less govt not more.
I was just making the point that the cash for clunkers program threw tax dollars down a rat hole. The only result was a temporary increase in sales. This will be followed by a drought.
It amazes me that so few understand Economics, that is why I provided the link. | |
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| Cash for Clunkers True Cost = 24,000 Per Vehicle.
Posted: 11/4/2009 1:46:18 PM | AP IMPACT: Clunker pickups traded for new pickups
By TED BRIDIS, Associated Press Writer
http://news.yahoo.com/s/ap/20091104/ap_on_bi_ge/us_cash_for_clunkers
The single most common swap — which occurred more than 8,200 times — involved Ford 150 pickup owners who took advantage of a government rebate to trade their old trucks for new Ford 150s. They were 17 times more likely to buy a new F150 than, say, a Toyota Prius. The fuel economy for the new trucks ranged from 15 mpg to 17 mpg based on engine size and other factors, an improvement of just 1 mpg to 3 mpg over the clunkers. | |
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| Cash for Clunkers True Cost = 24,000 Per Vehicle.
Posted: 11/5/2009 2:21:13 PM | ^^^^^^^
Yes they will support anything that has a liberal or socialist slant.
The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.
Simply put, we took billions of dollars of TAX money and gave it to only car buyers and to car companies. We destroyed wealth by crushing the turned in cars.
The effect is that while it pushed sales forward for car companies, it is creating a drought in sales now. | |
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| Cash for Clunkers True Cost = 24,000 Per Vehicle.
Posted: 11/5/2009 3:54:52 PM |
We destroyed wealth by crushing the turned in cars.
Curious---whose 'wealth' did we destroy?
The oil corporations?
...(Ray) LaHood said some 80 percent of the traded-in vehicles are pickups or SUVs, meaning many gas-guzzlers are being taken off the road. The Ford Focus is a leading replacement vehicle. General Motors Co., Chrysler Group LLC and Ford accounted for 47 percent of the new vehicles purchased.
A 9 mpg gain translates into annual savings of 3.8 million barrels of oil per year and nearly $1,000 for consumers at the pump -– not to mention that it will reduce carbon dioxide emissions by 660,000 metric tons a year. Okay, not a cost-effective emission reducer, but still, given the multiple benefits of the program, pretty darn good...http://climateprogress.org/2009/08/04/cash-for-clunkers-benefits/ | |
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| Cash for Clunkers True Cost = 24,000 Per Vehicle.
Posted: 11/5/2009 3:57:52 PM | Curious---whose 'wealth' did we destroy?
The oil corporations?
We essentially destroyed govt property. Those cars could have been sold either in the country or outside of it. | |
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