Did Cash for Clunkers Cost Taxpayers $24,000 per Real Sale?

A study by Edmonds, an industry analyst, illustrates how the government spent $24,000 to generate each sale of a new car.  The study states the following:

What happened?

Well, it’s in how Edmunds crunched the numbers. A valid way to evaluate the program economically, it says, is to look at how many people purchased cars that otherwise wouldn’t have been bought. The firm says that number is about 125,000 cars. By that measure, the government spent $24,000 to generate each sale of a new car.

For comparison, the average price for a new vehicle in August 2009 was $26,915, minus an average cash rebate of $1,667.

In all, the government spent $3 billion on a program that provided cash toward 690,000 car purchases – about $4,348 per car. That makes 565,000 people who got as much as $4,500 to buy a car they would have bought anyway, according to the Edmunds analysis.

The study concluded that 80 percent of the those cars sold under the program would have been purchased anyway.

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About Will Hucks

I am a systems analyst and do java development here in Jacksonville Florida.
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