I don't know about you, but I could use my share of $24k as year end taxes and the holiday shopping season approaches...
Thursday, October 29, 2009
Cash for Clunkers - A Real Bust
The Wall Street Journal is reporting this morning that CARS was a complete bust costing taxpayers as much as $24k per vehicle sold. They site an Edmunds.com study indicating that only 125k out of the 690k cars sold in the program actually added to SAAR. The rest would have sold anyway.
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Most folks have seen Dr. Paul Taylor's calulcations which he feels refutes Edmunds' figures. Of course, Dr. Taylor is NADA's economist and NADA lobbied for C4C, Taylor asserts that the incremental cost was about $4600., a far cry from Edmunds' $24000. number. My own opinion is that Edmunds number is overstated but a lot closer to the truth than Taylor's. Having said this, I still think it was a beneficial move as it was a "pump primer." It cleaned out old inventory, provided dealers a much needed injection of cash once they finally got paid, and allowed assembly plants to start up to replace inventory at a time that was desperately needed. I chalk it up as another measure to try to reinvigorate the U.S. auto industry including beleagured dealers. There are times when it is better to something even when it;s not perfect.
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