The real cost of Cash for Clunkers
Nov 1st 2009 9:00AM
Updated Nov 4th 2009 1:32AM
Whether you cashed in on last summer's Cash for Clunkers program or not, you paid for a new car.
According to research from Edmunds.com, taxpayers paid an average $24,000 per clunker in buying a new car. And they did so on sales Edmunds.com says would have occurred even if the $3 billion clunker program never existed.
The program, which gave buyers up to $4,500 in incentives to trade in their gas guzzlers for less thirsty vehicles, was supposed to spur sales and boost the economy.
But analysts say most of the sales resulting from Cash for Clunkers would have happened anyway. Edmunds.com says the program can only take create for sparking about 125,000 of the roughly 690,00 new car purchases. The other 565,000 buyers probably would have bought a new car anyway and just got lucky taking advantage of the government's kicked in cash.
The program, which cost taxpayers $3 billion, gave car buyers up to $4,500 in incentives to trade in their gas-guzzling clunkers to buy new fuel thrifty cars. It was intended primarily to spur sales, and the economy.
If you spread the cost of the program out over those 125,000 sales, it equals $24,000 per vehicle. Just $2,000 shy or what the average sticker on a new car was in August.