Report: Cash for Clunkers a Huge Waste
Tuesday, November 3, 2009 11:22 AM
By: Julie Crawshaw
Cash for Clunkers clearly distorted the U.S. economic figures in an unsustainable way, according to The Business Insider, which cites a report from the Bureau of Economic Analysis that indicates GDP growth in the third quarter would have been 1.89 percent, not 3.5 percent as claimed, without government money.
Moreover, the $3 billion program cost an average of $24,000 per additional car sold, according to an analysis by automotive consumer researcher Edmunds.com.
Nearly 690,000 vehicles were sold during the 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.
“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.”
Ironically, Anwyl notes, the average transaction price for a new vehicle in August 2009 was only $26,915 minus an average cash rebate of $1,667.
For $3 billion, “the federal government could have purchased the 125,000 cars outright at manufacturer suggested retail prices … and then handed each of the recipients an additional bonus check averaging the Cash-for-Clunkers subsidy of $4,000,” writes Thomas Eddlem at The New American.
“Or they could have bought every one of those 125,000 people a Smart car and then given them a check for $6,000.”
© 2009 Newsmax. All rights reserved.
Click here to read the original article: http://moneynews.newsmax.com/streettalk/cash_for_clunkers_waste/2009/11/03/280931.html
Tags: cash 4 clunkers, cash clunkers, cash for clunker, cash for clunkers, clunkers, clunkers cash
November 30th, 2009 at 4:15 am
Insurance for car is always being tricky and confusing to Me. On top of that now the government also..
.-= James@Double Din Navigation´s last blog ..Car PC Software =-.
December 3rd, 2009 at 10:31 pm
yeah i agree with what your saying. it really is important to make sure you know exactly what you are covered for. otherwise in the long run it may turn out very expensive
December 18th, 2009 at 7:17 am
While things are changing people who are less financially stable are struggling. Cash for clunkers is making people feel that to help the environment they should get rid of there vehicle. Although some people have been left the vehicle by loved ones are given as a present. I myself have just purchased a new car which is environmentally friendly but if I was left a gift I couldn’t see myself simply getting rid of it.
February 11th, 2010 at 6:13 pm
Always use an independent insurance agent when ever you can. They will have the resources to quote you multiple lines of insurance, with multiple insurance carriers. And yes, sometimes, it is better to buy your home policy from one company, and you auto policy from another. At least with an independent agent, you know you have somebody that’s working for you.
July 20th, 2010 at 3:24 pm
For instance, if your neighbor rarely uses his car and you drive every day, chances are your monthly premium will be higher compared with his. Why? This is because in theory, a person’s chances of getting into a car accident are in direct proportion to how often he drives.