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Cash for Clunkers Cost $24K per Car

In a previous post I estimated, under optimistic assumptions, that the $3 Billion cash for clunkers would cost the American taxpayer $7-12k per additional car sold.   According to Edmunds, a company that is highly authoritative on car prices and sales, the true cost of the cash for clunkers program was $24,000 per incremental car sold.

The truly amusing aspect of this analysis is that the White House immediately released a rebuttal saying that Edmund’s was looking at sales on Mars rather than on Earth.  I think the White House would only have been happy if every single sale during the  program was attributed to the cash for clunkers vouchers, but wouldn’t that be the analysis from Mars?

Luckily the CEO of Edmunds stuck to his guns and fought back with his own counter-punch:

“Apparently, the $24,000 figure caught many by surprise. It shouldn’t have. The truth is that consumer incentive programs are always hugely expensive when calculated by incremental sales – always in the tens of thousands of dollars. Cash for Clunkers was no exception.” -Jeremy Anwyl, CEO

Posted in Economics, Media, Politics.

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