Cash for Clunkers Cost $24K Per Vehicle

[BLAZER PROPHET]

http://articles.moneycentral.msn.com/Investing/Dispatch/default.aspx?feat=1341914

Ouch.

 

[barfo]

Since they didn't release the details of their calculations, it's hard to say whether this should be believed or not (although it is certainly true that some fraction of sales would have happened anyway). From what little they did say, it looks like they are somehow assuming that the ratio of luxury to non-luxury cars is fixed and that they can thus compute the number of non-lux cars that would have sold without the CARS program. That's obviously an assumption; how good an assumption it is, I don't know.

barfo

 

[BLAZER PROPHET]

Since they didn't release the details of their calculations, it's hard to say whether this should be believed or not (although it is certainly true that some fraction of sales would have happened anyway). From what little they did say, it looks like they are somehow assuming that the ratio of luxury to non-luxury cars is fixed and that they can thus compute the number of non-lux cars that would have sold without the CARS program. That's obviously an assumption; how good an assumption it is, I don't know.

barfo

That's a good point. But if their figures are relatively good, that's a lot of money per car. Where did it all go?

 

[Shapecity]

Edmunds.com did a report stating people who purchased using Cash for Clunkers paid a 29% premium on average.

 

[yakbladder]

Only 18% of the sales were incremental...hrm...how did they know that? They could've compared to last year except that suppose because of the quickly sinking economy sales were down 60% over last year? That would make the clunker-sponsored sales 78% of the total? Or suppose people who would've bought in Oct/Nov/Dec instead bought earlier to take advantage of cash for clunkers? Let's say 7% from each month. Now you're at 39% of the total.

Really, it's impossible to say. This is just speculative journalism.

 

[barfo]

That's a good point. But if their figures are relatively good, that's a lot of money per car. Where did it all go?

If their figures are relatively good... if.

As to where it went, I don't think there is any mystery about that. It went to credits to people who bought cars under the program.

barfo

 

[barfo]

Edmunds.com did a report stating people who purchased using Cash for Clunkers paid a 29% premium on average.

That makes sense to me. People aren't going to bargain as hard when some of the cost is being borne by someone else, and naturally the dealers are going to make every effort to capture as much of the government money for themselves as they can.

barfo

 

[Buzz Killington]

unpossible.

 

[BLAZER PROPHET]

If their figures are relatively good... if.

As to where it went, I don't think there is any mystery about that. It went to credits to people who bought cars under the program.

barfo

What I mean is this.... (and again, IF the figures are accurate), at $24,000 per vehicle someone is pocketing a lot more than they are supposed to be. Buyers? Car companies? Politicians? The credits weren't THAT big, were they?

 

[Buzz Killington]

the money all goes into Obama's stash.

 

[barfo]

What I mean is this.... (and again, IF the figures are accurate), at $24,000 per vehicle someone is pocketing a lot more than they are supposed to be. Buyers? Car companies? Politicians? The credits weren't THAT big, were they?

No, you are misunderstanding. Edmond is saying that although there were 790000 cars exchanged under the program, most of them "don't count" because those buyers would have bought even without the program.

They thus spread all the coats over a smaller number of cars.
But it isn't literally true... No one got 24000.
barfo

 

[Denny Crane]

No, you are misunderstanding. Edmond is saying that although there were 790000 cars exchanged under the program, most of them "don't count" because those buyers would have bought even without the program.

They thus spread all the coats over a smaller number of cars.
But it isn't literally true... No one got 24000.
barfo

It just cost the taxpayers $24,000.

More proof the govt. can do health care more efficiently than the private sector. NOT!

 

[BLAZER PROPHET]

No, you are misunderstanding. Edmond is saying that although there were 790000 cars exchanged under the program, most of them "don't count" because those buyers would have bought even without the program.

They thus spread all the coats over a smaller number of cars.
But it isn't literally true... No one got 24000.
barfo

OK, got it. I did misunderstand.