Cash for Clunkers costing 45k per vehicle.

Edmunds.com broke it down pretty well and they have no reason to lie about the numbers. The math is pretty complicated but it all works out.

I wonder what kind of math they were using? Klingon Kalculus?

I wonder how many North Korean nukes proudly tout the label, "Made In China" on them ...

The "math" works according to figures they used, but the actuality of it is incorrect.

Remember, they are estimating only so many cars took advantage of this; they have no solid figures.

I am sure that more than 22,000 people took advantage of this deal.

Just my opinion, as always, right or wrong.

I don't know. I've been drinking and I suck at math and it made sense to me...lol

One dealership (AutoNation) that has showrooms in 15 states sold 3,000 vehicles under this program...that really makes me think the 22,000 figure used is WAY low,

Marc Cannon, a spokesman for AutoNation, said the program had showrooms hopping at the company's 239 dealership locations in 15 states. AutoNation dealerships have sold 3,000 cars under the program and showroom traffic is up 36 percent.

http://www.miamiherald.com/news/politics/AP/story/1166593.html

*that should have been one company, not dealership

They probably throw all of this complicated mathematics around to cover up for people pocketing some of that money.

See response #5 here. It explains what was done in this article - intentional or not? Only the original author of the article knows for sure.

What the author is saying is that only 22,000 cars sold OVER AND ABOVE what would have sold anyway without government help.

Like I told Lamb, it makes sense to me and I've been drinking and I suck at math...lol

uath13, you are right see response # 5, it explains what was done here.

What the author is saying is that only 22,000 cars sold OVER AND ABOVE what would have sold anyway without government help.

That's a pure speculation then. I seriously doubt they could use the standard numbers that USED to get traded in during this economy. Right now sales ( & the subsequent trade ins ) are waaaayyyyy down. Having a clunker that would get me the extra money would be about the only thing that would convince me to even look at buying a new car.

It's not untoward to use past sales to make projections on future sales. It's actually how every business does business. You can't count the sales that would have happened even without government handouts..in order to calculate how well the program is doing you have to subtract the sales that would have happened in the normal course.

Temporarily artificially inflating car sales through welfare handouts really is a really shortsighted fix anyway and only prolongs the inevitable.

They'd still have to take present economic factors into account. Present sales have been absolutely pathetic so they couldn't use past numbers.

Yes it is a quick fix but at the moment there needs to be a lot of encouragement to get the economy going.

Okay, but what happens when all these "quick fixes" come back to bite us in the asss later? We're spending money we don't have; how is that going to help the economy? What happens when all these bills come due? Are you familiar with the CRA? It's what CAUSED this mess in the first place and it was a "quick fix". It helped the economy in the short term but we are now living with the consequences. This is just another version of the CRA.

Check this out:

http://www.businessinsider.com/whoops-cash-for-clunker-participants-dont-realize-their-rebates-get-taxed-2009-8 Those rebates are taxable.

What isn't taxable?

Lots of things. Those 8000 housing credits weren't taxable.

This is just another example of the government screwing over the "little guy" to help out the automakers.

LMAO...you think they'll pay me to shuffle papers? I'm an expert paper shuffler...

You never know. All you need to do is find the right person to ask. Uh - now who can THAT be?

Check this out:

http://kdka.com/local/Cash.clunkers.program.2.1103645.html

This guy shows up with a POS worth 150 bucks: thanks to the government he got 4500 bucks for it.

Isn't that nice?

Your right...there it is. I knew something was screwy. With that correction that puts the cost at 4,535k per vehicle. Only a $35 management cost. That's pretty good by government standards.

here's another article that says,

Yesterday, the National Automobile Dealers Association (NADA) released a survey of its dealers indicating more than 200,000 sales had been made since the program began. Based on initial data from the National Highway Traffic Safety Administration (NHTSA), which runs the program, the average credit consumers have received for their old clunkers so far is $4,215. Based on that amount, the government may already have spent $843 million of the $950 million allotted for the program. ($50 million of the $1 billion was allocated for administrative purposes.)

http://blogs.consumerreports.org/cars/2009/07/clunkers-money-new-cars-running-low.html

Here is a comment on that article that explains it:

You guys need to learn economics. You either didn't read the article or can't understand the concept being discussed.

The math is absolutely correct. The idea is that a certain number of cars/trucks would have been sold anyway - Edmunds says 200,000 clunkers are traded in for fuel efficient vehicles EVEN WITHOUT GOVERNMENT SUBSIDIES!

The cost to the government of a "stimulus" is NOT $3,500 - $4,500 per car, because many buyers are getting the money even though they WOULD HAVE BOUGHT ANYWAY, without the program.

At $4,500 per extra car, the program costs the government $45,354 for each extra sale, above those that are normally sold anyway, exactly as the article states.

What the author is saying is that only 22,000 cars sold OVER AND ABOVE what would have sold anyway without government help.

I found this too, and it's no less damning...

http://www.businessweek.com/autos/autobeat/archives/2009/07/cash_for_clunke_2.html

Edmunds figures that CARS will only help drive about 50,000 incremental new car sales. How is this possible? Edmunds.com’s research shows that typically 200,000 vehicles worth less than $4,500 are traded in for new vehicles every three months. At best the current Cash for Clunkers program will fund 250,000 such transactions in the same time period—a gain of only 50,000 vehicles, says the company. Given that this program is budgeted to cost $1,000,000,000, this increase will come at the cost of $20,000 per extra sale.

so basically, according to business week, the government spent 2 billion to sell 50,000 cars....

sorry I meant 1 billion

Sure...In an economy where nobody has any cash to spend people would still be trading in their old clunkers at the old rate. I see that happening!

Regardless, it's a temporary fix that does nothing to help the economy in the long term and in fact only hurts it. It's like anything else you buy on credit; it's great in the NOW but eventually that bill will come due and you can't guarantee that you're going to even have the money to pay for it. This ridiculous program is just more of the same crap that got us in this mess in the first place.

Actually, there are a lot of things that edmunds is not taking into consideration here.

1) During a recession fewer people are trading in cars; they are keeping them longer.

2) Only cars that have low gas mileage qualify in the first place - I have a 1987 "clunker" and a 1997 "clunker"; but, neither one of them "qualify" because they get good gas mileage. A lot of other people who trade in cars are trading have been trading in non-qualifying cars - so, out of that "200,000" trade-ins edmonds is talking about - how many REALLY would qualify for the program.

3) The program does get a bunch of the gas guzzling polluting cars off the road - every car that qualifies for the program MUST be certified as being destroyed - the engines have acid poured in and then they are CRUSHED. Most trade-ins were just being cleaned up and resold to go back on the road; with this program only the ones with good gas mileage are being resold and put back on the road.

4) While trading in these cars is not doing a lot more than helping some people in the auto industry keep their jobs; it is a booming business for the recyclers. They are having to hire more workers to handle the increase in volume.

5) The recycling volume generated by these cars is driving the price of recycled steel down (before this the value of the average crushed car was $500 - now it is only $100) because so many are available. This means more work for US refineries who will be smelting and reselling the steel to manufacturers. (more jobs and lower costs)

6) With lower steel prices, manufacturers will be using more steel to produce and build things. Not just cars, steel is used in everything from kitchen knives to high rise construction projects.

Several other countries already were using this type program very sucessfully, this was not a NEW idea that Obama came up with; he "borrowed" it.

Considering the TRILLIONS of dollars Obama has "pissed away" giving big business money to throw away on "bonuses" and "executive retreats" - the low cost of this program in comparision to it's benefits makes it a real bargain.

I have a hard time believing that this program will make any kind of long term appreciable difference in the economy. Though you make some good points, it still amounts to the government artificially inflating and manipulating the economy much like it did with the CRA. The CRA was a HUGE boon to construction and housing industry and led to a bubble that when it burst has done trillions in damage and decimated property values and our economy.

This is just another example of how government involvement helps in the short term but will only cause long term damage. At what point do we wake up realize the government is responsible for our economic problems?

"Cash for Clunkers" was never meant to "make any kind of long term appreciable difference in the economy".

This program was meant to be a limited, short-term program. It was an incentive to get people to turn in inefficient gas guzzlers for fuel efficient vehicles and get those vehicles off the road permanently. It was meant to make purchasing a new fuel efficient car more affordable. It was meant to show automakers that Americans are willing to buy fuel efficient vehicles and give up the gas guzzlers the companies have been producing and give the companies an incentive to build more. It was meant to give small dealerships a little boost to help them ride out the recession.

The fact that they ran out of money so fast and are now adding more money shows how popular it is with the American public.

I do not deny that Obama has been making a lot of mistakes with our economy and has been wasting trillions of dollars. But, this program is not one of the mistakes - of course, since he "borrowed" the idea from other countries where it had already worked may account for its success.

I don't blame people for taking advantage; their taxes will get raised to pay for it so they're trying to get what they can.

The government is rewarding irresponsibility and spending money it doesn't have. Also, remember it owns a hug chunk of GM and has a vested interest in seeing it succeed.

http://www.businessinside... Those rebates are taxable, so I was right about peoples' taxes getting raised...

Since the rebate is taxable, the only people paying extra taxes are the people who get the rebate. If you don't get the rebate; you don't pay more taxes because of it.

If they receive the maximum rebate - $4,500. That is $4,500 they did not have to work for and earn. Even, if their tax rate is 25% (and, for many of them it is less than that) they will only pay back $1,125 in taxes. That still gives them a clear profit of $3,375.

but do you think people would have went out and bought a new car if they knew those rebates were taxable? How many people can afford to pay extra taxes right now?

I do have to admit that the fact that this was taxable was not well publicized. Many of them would have still taken advantage of it; because, for many of them it will just mean a smaller tax refund next year.

"How many people can afford to pay extra taxes right now?" I have no idea; but, the taxes are not due "right now"; the taxes are not due until Apr 15, 2010. Even then, they can get an extension or make payments. (I had to do that one year myself; it is not the end of the world.)

Actually, if you think this is not "fair"; you should look into what happens when you fall behind on loan payments and you make a deal to reduce or have the debt "forgiven" because you really cannot afford to pay it. Every dollar that is reduced or forgiven becomes taxable income. (The only exception is when it is accomplished through bankruptcy.) So, a person who could not afford to pay off the debt suddenly has to pay income taxes on that debt. Example, if a person owed $5,000 and could not pay it; so, the company was willing to settle for $2,000 - now the individual owes the government taxes on the $3,000 that was written off by the company.

It's already gone through sweetie....and they are pumping even more money into it....

I wish this nightmare would end....

I am beginning to lose hope that it will never end until Nobama is out of office. I just hope something will be left of our once beautiful and proud country. The way it is going Nobama will continue apologizing for our country, spend our tax dollars on wild ideas, get rid of the old by euthanasia and aborting babies until there is nothing left but ashes and memories of what once was.

Exactly. Spending money we don't have to artificially inflate the economy is a baaaad idea.....

Wow. I hadn't thought of it that way. Excellent point. You were responsible and because of it you don't get in on the good deal.

What a bunch of crap.

The article is saying that you can't count the cars that would have been traded in without government intervention, which is about 200,000 cars. Even business week said that the program would only result in an additional 50,000 cars sold.