This should not be a surprise to anyone:
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.
Remember when we used to be outraged that the government would pay $800 for a hammer? Who knew we’d look back and consider that the good ol’ days of reasonable government pork.
(Via: Freakanomics)
November 2nd, 2009 | 1:30 pm
If you read the article in question, you’ll see that this is pretty fuzzy math. Just to be clear, this has nothing to do with overhead or anything like that, it’s just that Edmunds.com determined that only a small portion of the total cars sold under Cash for Clunkers wouldn’t have been purchased otherwise.
We need more information about how they calculated the incremental number of cars sold due to CfC in order to conclude whether their numbers make any sense.