Cash for Clunkers: Press Release

[KCALB SIRAY]

From edmunds.com
Contact:
Jeannine Fallon/Chintan Talati
Edmunds.com Corporate Communications
www.Edmunds.com
Media Hotline: 310-309-4900
pr@edmunds.com


Cash for Clunkers Results Finally In: Taxpayers Paid $24,000 per Vehicle Sold, Reports Edmunds.com

SANTA MONICA, Calif. — October 28, 2009 — Edmunds.com, the premier resource for online automotive information, has determined that Cash for Clunkers cost taxpayers $24,000 per vehicle sold.

Nearly 690,000 vehicles were sold during the Cash for Clunkers program, officially known as CARS, but Edmunds.com analysts calculated that only 125,000 of the sales were incremental. The rest of the sales would have happened anyway, regardless of the existence of the program.

Ironically, the average transaction price for a new vehicle in August 2009 was only $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, 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."

The chart below sets forth actual SAAR (Seasonally Adjusted Annual Rate) compared to Edmunds.com's forecasted rate if the program had never been implemented.

Actual (or Forecast) If no Cash for Clunkers Difference Sales Volume
Jan '09 9.59 9.59 n/a 654,922
Feb '09 9.14 9.14 n/a 687,182
Mar '09 9.69 9.69 n/a 855,146
April '09 9.20 9.20 n/a 817,096
May '09 9.85 9.85 n/a 923,141
Jun '09 9.67 9.80 -0.13 857,447
Jul '09 11.22 10.11 1.11 995,216
Aug '09 14.06 10.45 3.61 1,258,747
Sep '09 9.19 10.63 -1.44 744,367
Oct '09 10.40 10.89 -0.49 n/a
Nov '09 10.40 10.82 -0.42 n/a
Dec '09 10.61 10.85 -0.24 n/a

"Our research indicates that without the Cash for Clunkers program, many customers would not have traded in an old vehicle when making a new purchase," Edmunds.com Senior Analyst David Tompkins, PhD told AutoObserver.com. "That may give some credence to the environmental claims, but unfortunately the economic claims have been rendered quite weak."

To conduct the analysis, the Edmunds.com team of PhDs and statisticians examined the sales trend for luxury vehicles and others not included in Cash for Clunkers, and applied the historic relationship of those vehicles to total SAAR to make informed estimates. These estimates were independently verified through careful examination of sales patterns reflected by transaction data. Once the numbers were determined, Edmunds.com's analysts divided three billion dollars by 125,000 vehicles to arrive at the average $24,000 per vehicle.



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[Kal-El]

Just like everything the government does, it was an utter disaster.

The government just loves creating bubbles and then we have to deal with the consequences when they burst. Now, car sales are weak again. It did no good.

[Lafiro]

Im happy I got my dad to switch. His beat up old SUV, leaking oil from everywhere. Weak sounding. Crack in a cylinder or something that caused misfires.
Bad timing belt, bad gas milage. Bad suspension. Leaking oil after driving on the highway right onto the exhaust causing smoke to come out.

I was SO HAPPY when we traded that POS in for a brand new car. No more problems, and for a car that was probably $1000 or less and needed $2,000 in repairs, we got lucky and we got the $4,500 for it(or was that $4000) lol. Either way, great deal and very happy at the end.

[Altitude]

Bullshit math meant to rile the masses.

[yaris-me]

This is scary, frightening, horrible. It means our govt is at a 7% efficiency for running a program to help the economy. For every dollar boost to the economy, the govt has to spend $1500. OMG, WTF!

[Kal-El]

Originally Posted by yaris-me

This is scary, frightening, horrible. It means our govt is at a 7% efficiency for running a program to help the economy. For every dollar boost to the economy, the govt has to spend $1500. OMG, WTF!

Yet they say they'll lower the cost of health care. And people buy into it.

[Kal-El]

Originally Posted by Lafiro

Im happy I got my dad to switch. His beat up old SUV, leaking oil from everywhere. Weak sounding. Crack in a cylinder or something that caused misfires.
Bad timing belt, bad gas milage. Bad suspension. Leaking oil after driving on the highway right onto the exhaust causing smoke to come out.

I was SO HAPPY when we traded that POS in for a brand new car. No more problems, and for a car that was probably $1000 or less and needed $2,000 in repairs, we got lucky and we got the $4,500 for it(or was that $4000) lol. Either way, great deal and very happy at the end.

Perfect example of a situation where a new (or newer used) car was needed anyway and a purchase was inevitable. Yet, the tax payers (through wealth redistribution) had to pay $4,500 for a trade in that was worth maybe $500.

Nice.

[2+2]

But the "Press Release" reads like an infomercial. lol "Edmunds.com Senior Analyst David Tompkins, PhD told AutoObserver.com..." and "To conduct the analysis, the Edmunds.com team of PhDs and statisticians" should have tipped you off! A respected source wouldn't have to tell you how awesomely awesome they are.

So ya think Edmunds.com has seen an uptick in traffic since "reporting" this?

I think I'll start a website later today and claim that clunkers cost $4501 per car. My credentials are that I drive a car and therefore I am an expert in cars.

[2+2]

Btw, this is just anecdotal and therefore not worth much but I drive for a living and I've had many occasions sitting at red lights or parked somewhere to check out the various vehicles sitting in auto dealers CforC lots. It's easy to spot them because the dealers write clunkers or CforC or something on the windshields to distinguish them. Of course I can't tell you the % but my guess is that at least half came from households that were probably not in the market for a new car. By that I mean that it's probably rare for someone to go from a beat up old clunker to a new vehicle. Just my guess, but I see that person driving the beater til it dies and buying their next beater used, extremely used.

[yaris-me]

Originally Posted by Kal-El

Yet they say they'll lower the cost of health care. And people buy into it.

[UTVitz]

Yeah, I've had fun walking through the rows of C4C cars looking at what was turned in. Most of them really were clunkers. It's only been a few months, I'm waiting to see the flood of repos on the new cars when these people can't all make there payments on time and the bank wants it back.

[Kal-El]

Originally Posted by UTVitz

Yeah, I've had fun walking through the rows of C4C cars looking at what was turned in. Most of them really were clunkers. It's only been a few months, I'm waiting to see the flood of repos on the new cars when these people can't all make there payments on time and the bank wants it back.

Which is exactly how the housing and financial market and ultimately the economy came crumbling down. The Clinton administration pushed forward an Act (which started in part by Carter) forcing banks to make risky loans and mortgages to lower income people to expand home ownership. Well, we saw what happened with that. Yet another example of good intentions gone wrong. It just doesn't work in the end. Not everyone has the means to a nice home and nice new car. The government cannot create a false economy and yet they continue to try with policy, programs, and stimulus packages. It's all phony and doesn't last.

Is it so hard to understand that people must work and earn their own money to legitimately purchase goods?

The only entity that should offer incentives is the one selling a good or service. Not a 3rd party. If GM or Ford or whoever wants to slash $4500 off a new car, fine. But the government taking money from one sector of the population and redistributing it to another sector in order to purchase something they couldn't otherwise afford is so wrong in so many ways.

[Goose]

Soon after Edmunds released this report, the White House started attacking Edmunds.

[KCALB SIRAY]

Originally Posted by UTVitz

Yeah, I've had fun walking through the rows of C4C cars looking at what was turned in. Most of them really were clunkers. It's only been a few months, I'm waiting to see the flood of repos on the new cars when these people can't all make there payments on time and the bank wants it back.

I posted on someone elses thread about the same senario a few months back. The "eyes bigger than the paycheck" issue surrounding it. Good point to bring up again as it's already started to happen around the country. I'll see if I can find anything to read on it.

[supmet]

Originally Posted by edmunds.com

The rest of the sales would have happened anyway, regardless of the existence of the program.

I find it odd, that every person I know, both in real life and on the internet who participated in cash for clunkers, would not have bought a car without it, but they find only 125k out of 700k bought because of it.

Statisticians are a joke, and nothing they say should ever be taken seriously. 60% of the time, they are right every time.

[tomato]

Originally Posted by Altitude

Bullshit math meant to rile the masses.

I would agree with that.

[JBougie]

The government sucks at everything they do.