I agree 100% that claims of an additional 700K cars sold are total bull as well. The American Thinker analysis is a much better analysis, that falls off the tracks when they cite the $24k number.

If the point is that people drained out the current vehicle inventory and reduced demand coming up to and going away from the program then there are probably plenty of articles to make that point. We spent $3 billion and what did we get? Auto inventory reduction, supposedly reduction in carbon emissions. Things that are not government responsibility in the first place, we have no business giving people money to buy a new car.

The government spent $3 billion (total cost of the program) and in return, the car industry sold 125,000 more cars than it would have without the government incentive.

They claimed the program was a huge success and at the end, the headlines everywhere were similar to <a href="http://www.google.com/search?q=Cash+for+Clunkers+generates+700%2C000+new+car+sales&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a&quot; target="_blank" rel="nofollow">Cash for Clunkers generates 700,000 new car sales. (The link simply provides search results for the phrase.) Those headlines implied those cars would not have been sold without the program, which is incorrect.

Up until the Edmunds press release, many knew many sales had been "shifted" but there was no analysis about the shift to determine how many cars would have been sold without the incentive. Edmunds' research (as well as the analysis over at American Thinker) provides us with some numbers.

One could mention that all of the cars traded in would have eventually been replaced over time, but how can we measure the return on investment in this case? Was the program really a success? (Note I don't think it should have been implemented in the first place.) We spent $3 billion – what did we get?

Are you seriously insulted? I apologize for actually thinking this through and doing the proper math. I will try to think less from now on.

-Erik

The way I look at it, Edmunds says the increase in sales was 125,000 units and the government spent $3 billion on the program. That's the math. What about the American Thinker piece?

So maybe the headline should read Taxpayers Paid $24,000 per EXTRA Vehicle Sold or something like that?

If the only problem is the Edmunds.com article TITLE I will agree it is misleading; but stipulate the article, and this post, clearly explain.

By the way, insulting me is getting you nowhere.

If you want to understand what the cost per car is then you divide the total cost by the number of vehicles. This is a very simple calculation.  $3mm divided by 690k. You come up with about $4,300 per car.

If you want to calculate what the program costs to stimulate buying of cars that otherwise would not have been bought, then you take that number 125,000 and you multiply it by the cost per car that we have already calculated, you do not divide it from the $3 billion. Dividing it by $3 billion does not make any sense whatsoever. The number that you get $24,000 is NOT in any way a cost per car of anything as it relates to this matter. The caller is correct, this report is totally illogical and total junk.

When you fabricate things like this it calls into question all of the other things that you post here.  Most people will never try to figure it out and just take your word for it, but anyone that really thinks about it realizes that the number is total BS.

-Erik