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Cash 4 Clunkers: $24K per car by taxpayers

Ockham

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Fox News said:
The American taxpayer doled out $24,000 per vehicle sold under the government's "Cash for Clunkers" auto program, according to a study released Wednesday.

The report, conducted by the automotive information firm Edmunds.com in Santa Monica, Calif., found that of the nearly 690,000 vehicles sold under the program only 125,000 of the sales were incremental.

The rest of the sales would have happened anyway, despite the government program, the report said -- raising questions over its effectiveness.

LINK

Whew! Thank god it was only $24,000 of taxpayer money per car sold... what a success huh? And some of those dealerships are still waiting for their rebate checks. Thank goodness the United States will repeat this abortion by offering Cash for Appliances this fall with another $300 Million in taxpayer money.

Good times ... Gooood times....
 
It's similar for that housing thing where people were offered what like 8K or something for new home buyers. Most of those people were going to buy houses anyway. The incremental increase (i.e. renters turning owners whom wouldn't have) was rather low. All this stuff really does is make a government program which can be abused.
 
That's what I call typical government efficiency. Can't wait till they control my health care as well. /sarcasm
 
Does the article mention the statistical methodology used in this "study"?
 
LINK

Whew! Thank god it was only $24,000 of taxpayer money per car sold... what a success huh? And some of those dealerships are still waiting for their rebate checks. Thank goodness the United States will repeat this abortion by offering Cash for Appliances this fall with another $300 Million in taxpayer money.

Good times ... Gooood times....

Did it push sales forward, and stave off a 'falling off the cliff' scenario? Did it encourage higher mileage cars to be purchased? Did it get lower mileage cars off the road?

Some questions I have.


It's similar for that housing thing where people were offered what like 8K or something for new home buyers. Most of those people were going to buy houses anyway. The incremental increase (i.e. renters turning owners whom wouldn't have) was rather low. All this stuff really does is make a government program which can be abused.


I was reading about this earlier. It's made me begin to question if extending the credit is a good idea.
 
BS "report".

690,000 vehicles were sold under the program, so:

3 billion divided by 690,000 = $4,347 per car.

The rest is pure conjecture. They have no way of knowing how many people would have bought a vehicle "anyway".

Cars were flying off the lots, and I'll bet everyone here knows someone who bought a car because ofthis deal.
 
Does the article mention the statistical methodology used in this "study"?

This isn't a statistical study...lol

Yes it is ...lol

No, it's not. It's a mathematical breakdown of the cost of the program.

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.


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


Statistics Definition | Definition of Statistics at Dictionary.com



ps - to answer Goldenboy's question, I couldn't find it.
 
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BS "report".

690,000 vehicles were sold under the program, so:

3 billion divided by 690,000 = $4,347 per car.

That assumes that none of those people would have purchased a car without the program, which is obviously false. The relevant question is how many people purchased a car who otherwise wouldn't have, which is exactly what this study looked at.

The rest is pure conjecture. They have no way of knowing how many people would have bought a vehicle "anyway".

Cars were flying off the lots, and I'll bet everyone here knows someone who bought a car because ofthis deal.

You're missing the point. It's really not that difficult to come up with fairly accurate predictions for what would have happened without the program. From there, it's simple math.

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.

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



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


I question the comparison 'to the historical relationship of those vehicles to total SAAR' for two reasons. One, what was happening in the industry bore no relationship to historical data, the industry was in crisis. Two, the environmental qualifications for what vehicles qualified could have (likely did?) effect what cars were purchased.
 
BS "report".

690,000 vehicles were sold under the program, so:

3 billion divided by 690,000 = $4,347 per car.

The rest is pure conjecture. They have no way of knowing how many people would have bought a vehicle "anyway".

Cars were flying off the lots, and I'll bet everyone here knows someone who bought a car because ofthis deal.

What you're not taking into consideration, is that we had to pay hundreds, possibly thousands of government trough-heads to process the paperwork, above the actual money given away to the car dealers.
 
I question the comparison 'to the historical relationship of those vehicles to total SAAR' for two reasons. One, what was happening in the industry bore no relationship to historical data, the industry was in crisis. Two, the environmental qualifications for what vehicles qualified could have (likely did?) effect what cars were purchased.

These are both valid points, and I don't know how significantly they would change the analysis. I'd wager that they might bear on the magnitude of the multiplier, though not by too much. I would say it's safe to conclude that the cost to the taxpayer was significantly more than the $4000/car that was actually given out.
 
These are both valid points, and I don't know how significantly they would change the analysis. I'd wager that they might bear on the magnitude of the multiplier, though not by too much. I would say it's safe to conclude that the cost to the taxpayer was significantly more than the $4000/car that was actually given out.

IA, I think the cost was higher, not sure how much. I trust this study less than a similar housing one that also is in the news today.
 
These are both valid points, and I don't know how significantly they would change the analysis. I'd wager that they might bear on the magnitude of the multiplier, though not by too much. I would say it's safe to conclude that the cost to the taxpayer was significantly more than the $4000/car that was actually given out.

We don't know how much, but we do know a news headline of "Taxpayers Paid $24,000 per Vehicle Sold" is disingenuous at best.

690k vehicles were sold under the program, not 125k.

And as anyone in business knows, there are many side benefits to a sales program: new customers, free advertising, future sales, future maintence etc.

This "statistical analysis" was worthless without much more additional data being added in.
 
We don't know how much, but we do know a news headline of "Taxpayers Paid $24,000 per Vehicle Sold" is disingenuous at best.

690k vehicles were sold under the program, not 125k.

And you still don't seem to understand that the 690k number is irrelevant unless no cars would have been sold without this program.

And as anyone in business knows, there are many side benefits to a sales program: new customers, free advertising, future sales, future maintence etc.

This "statistical analysis" was worthless without much more additional data being added in.

Those are additional benefits that the car dealers received. How does that have anything to do with the cost to the taxpayer?

This is very basic stuff:

(Total cost to the taxpayer) / ((Number of cars that were sold with the program) - (number of cars that would have been sold without the program)) = The cost to the taxpayer for each incremental sale.
 
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I was reading about this earlier. It's made me begin to question if extending the credit is a good idea.

I don't think so. Some of this is just band-aid sort of crap to make it seem like the government is doing something. With cars, the fact of the matter was that the average age of a car people had was near 10 years. There's about to be a lot of turnaround on that front because people will soon be buying a lot of cars. Though the economic downturn probably stifled that temporarily a bit. Housing is a bit more static, and the purchase a lot more long term. That too would turn around. The idea though is to convert renters to owners, and not just people who were going to buy a new house anyway. It's the same sort of thing as the cars. There were people going to buy a car anyway, that's not really touting anything for the program. It's to encourage change on top of that number, that's spurring something.

In the end, with all the government give away to companies and banks they had to make it seem as if they were at least throwing the People a bone. But I doubt that either program had significant impact.
 
And you still don't seem to understand that the 690k number is irrelevant unless no cars would have been sold without this program.

I understand what they did, I just don't agree with their methodology.

Those are additional benefits that the car dealers received. How does that have anything to do with the cost to the taxpayer?

The taxpayer benefits by a stonger economy, more jobs, consumer confindence, etc, etc, etc.

Trying to assign a static number today to an investment that may not pay off for a decade is ridiculous.
 
The taxpayer benefits by a stonger economy, more jobs, consumer confindence, etc, etc, etc.

Trying to assign a static number today to an investment that may not pay off for a decade is ridiculous.

Using this logic, it's impossible to measure the impact of anything on the economy.
 
Trying to assign a static number today to an investment that may not pay off for a decade is ridiculous.


Any investment that takes that long to show a return, is a very bad investment.

However, that school of thought blows Left wing opposition to oil exploration out of the water.
 
Using this logic, it's impossible to measure the impact of anything on the economy.

No, I think you can reasonably add in factors to try and guage the long term affects, but this "study" wasn't it.

Any investment that takes that long to show a return, is a very bad investment.

lol, wut?
 
I remember seeing videos of dealers purposely burning their engines out. Because the car was worth more quickly junked than selling for cheap to someone who could eventually use it.
 
What this really did was remove a link from the used car business. This program gave money to people who could already qualify to buy a new car. It did not help people with less disposable income buy new cars, it did not help poor people with real smog belching older cars that should have been junked buy a car. What is did do was remove 690,000 relatively new vehicles that would have been good used cars from the market. The poor people who would normally have purchased these cars as an upgrade from their truly worn out, pollution belching cars now have no path to stepping into a better car for a reasonable cost.

I will give an example. A man I know has a 1997 Toyota Tacoma that has 300,000 miles on it. The engine was worn out and it would not pass smog test in CA. He went looking for a replacement truck (he uses it for his work) but found that all of the trucks he could afford had been turned in as clunkers. Anything that was still licenseable in CA was now $6500 and higher. Looking back at ads from just 6 months ago, there were literally dozens of trucks in his price range. Now the starting price was thousands more than just months before. He ended up rebuilding the motor at a cost of $3800 because he had to have a truck in order to work.


Junking all these cars that were traded in was a stupid idea from an economic and an environmental perspective. If you wanted to give a subsidy to the auto makers, you should have just done so. It would have been cheaper and done more good as almost half of the money went to foreign car manufacturers anyway.
 
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