The numbers just don’t seem to add up.
The “Cash for Clunkers” program gives roughly a $4,000 subsidy when a person trades in a clunker for a new car that gets better gas mileage.
Congress set aside $1 billion to fund the program. If all of that money was going to pay these subsidies, there would be enough money to pay for 250,000 clunkers.
The program went into place on July 24th. One week later, the program was said to be out of money.
In 2006, before the current ills of the automakers, the average number of new cars sold in a week in the United States was 125,000.
So if you believe the numbers, sales involving clunkers as trade-ins last week represented more than two times the weekly sales of new vehicles when the industry was healthy.
Maybe that is possible, but something just does not smell right to me, especially because at the start of the week no one seemed to be worried that the Clunkers program would run out of money (especially not me!), so there was no reason to rush out and take advantage of it.
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Wasn’t it retroactive back to July 1st? Who has the data on the number of cars received in junkyards … they should hiring at junkyards to crush those 250,000 cars.
Dealers have been taking orders since the law went into effect, on July 1st…… So it is actually 4 weeks.
Supposedly dealers have been writing up the paperwork for months and holding it untill the anticipated program went in to effect. So we are seing two months of sales in one week.
Just a bad program all round. Sending perfectly good cars to their early grave to save the environment. How much pollution to make all the new cars?
A number of dealerships in my area (Seattle) started taking cars for this program on 01 JULY, when it opened. It is the compensation part that’s only just opened up.
I was just thinking this on Friday… good to know I’m not alone! It would be great to know that the program worked this well, but the numbers just sound a bit silly…
Yes, but about 1/3 of the people who would have purchased a vehicle in the last year didn’t move ahead with purchase (due to credit issues, uncertainty over the economy, etc.). That’s some pretty significant pent-up demand, just waiting for the right release valve!
On Friday a JD Power analyst in an NPR radio interview estimated that the $1 billion dollar program resulted in 40,000 net unit sales. That works out to $25,000/unit the taxpayer helped subsidized….what a deal!
You aren’t factoring in the 100 million dollar bureaucracy.