Back to Mobile View

The real cost of Cash for Clunkers

Posted 9:00AM 11/01/09 Economizer, Travel
1 Comments Print Text Size A A A

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.

Add a Comment

*0 / 3000 Character Maximum
Newswire

Compare Mortgage Rates

Mortgage Rates by Zillow
Follow Us

Headlines From DailyFinance Partners

CNN Money
CNBC
Smart Money
Consumer Reports
Huffington Post
AOL Energy
AOL Jobs
Business News Personal Finance Investing Our Partners

DailyFinance Sitemap | Terms of Service | Privacy Policy | Trademarks | HELP | Advertise With Us

© Copyright 2012 AOL Inc. All Rights Reserved