Posted on 10/29/2009 10:15:55 AM PDT by Ben Mugged
There is little doubt that Cash for Clunkers gave auto sales a big boost in late July and most of August, but there has been considerable debate as to how much help taxpayers' $3 billion provided. Customers who purchased a new car or truck were rewarded in many ways, especially when you consider the U.S. government paid out a median price of about $4,000 per clunker. Those customers are also saving at the pump, as each car turned in was 4-10 mpg better than the vehicle it replaced. Dealers sold more cars. States received more tax dollars. So the program was a success, right?
If you believe the statistical analysis of Edmunds, perhaps the program wasn't so terrific after all. The industry research juggernaut claims that of the 690,000 vehicles sold under the program, only 125,000 of those sales went to people who weren't going to purchase a new car in 2009. The result, says Edmunds, is that the $3 billion spent for C4C ended up spurring only 125,000 sales at a cost of $24,000 per vehicle. Further, Edmunds claims that October's sales would have ramped up even more than what current projections indicate.
There doesn't seem to be too many industry experts who disagree with Edmunds' assessment that the Clunkers program only generated 125,000 additional sales, but C4C wasn't just about selling cars and trucks. Ford industry guru George Pipas told CNN Money that the Blue Oval feels the program was a success, adding "The whole purpose of the program was to provide some kind of catalyst to kick-start the economy, and by all accounts the extra production that was added this year was a boost to the economy."
(Excerpt) Read more at autoblog.com ...
Well, Ford’s got part of it right - it certainly did boost the economy - of Japan. The majority of those cars sold were Toytoa and Honda, if I recall correctly.
I’m curious and wonder if anyone knows - did the Feds put pressure on the car companies, dealerships and industry lenders (Ford Motor Credit, GMAC) to grant loans to those people participating in the C4C program even if they didn’t measure up to lending standards?
If so, I look for a slew of repossessions in about, say, 6 months, when these people start defaulting on their car loans.
People just don’t understand that the cash outlay for “government programs” is only a third of the cost (at best) for anything they touch. The other 66% is graft, duplicity, red tape and generally poor management practices. In short, lousy stinking, normal government intervention is inefficient by nature.
Front loading sales doesn’t help the economy and the removal of “clunkers” from the used car market hurts people at the lower end the economic scale.
Just add C4C to the long list.
So the Ford guy thinks it jump started the economy?
No it just crunched the car buying into a short window.
let’s ask Ford Guy again in dec.
Yes Japanese auto makers benefitted but the huge majority of Japanese cars sold were made here in USA so there was some benefit here.
Not enough to justify the program
Just an example of how government health care would operate.
Spent a good deal of time thumbing through the constitution, looking for the part wherein it states that the government has the right to bill citizens for the autombiles of other. Couldn’t find it. I guess it’s somewhere in the “penumbras.”
And it probably also didn't hurt all of the Americans who make those Japanese cars in American factories.
According to CNBC this AM, it was S. Korea (Hyundai) that got the biggest boost.
Don't have to wait until December, I am proof of how bad things are right now sales number wise.
I just drove off the lot with a 2010 Mustang GT.
I traded in a 2007 Mustang V6 that I was $7,300 upside down in (made a horrible decision/deal in 07) according to KBB and NADA trade-in values.
To make the sale the dealer dropped the sticker on the GT by $2000, and i got a $2000 grand rebate from Ford. They then gave me Private Sale Value on my 07.
Plus they threw in GAP insurance and extended warranty on the GT.
I drove off the lot $500 under the original sticker, out from under an upside down loan, and with $1500 in extras.
Here are the numbers on the deal I described above just to make it all clear how desperate they were to SHOW a sale.
07 Mustang (trade-in) - NADA value 12000, owed 19300, got 15800
10 Mustang GT - 29800 sticker, lowered to 27,800, rebate lowered to 25800
Gap insurance- 700, Extended warranty 800.
Final financing 29300.
this means upcoming “cash for appliances” should render us some fabulous $8000 refrigerators!
This one struck me as a great example of government leading us to water, as they say.
LMAO!
They’d have been better off just giving the taxpayer $24,000 then and letting them buy whatever new car they wanted.
My grandson works in the service dept of a local Dodge Jeep dealer and yesterday he said new cars sales stopped the day after the giveaway ended. I think he said they have only sold 24 new and used this month so it looks like future sales were pirated with fake money...
And it probably also didn't hurt all of the Americans who make those Japanese cars in American factories.
Toyota and Nissan are in business to make profits and the profits went to Japan. Americans who complacently work for foreign masters on America soil are morons. If you have to do it then I understand but you should admit what the deal is
And all those states and counties who lured Japanese automobile maker factories with huge tax breaks and land bonanza......They are pretty vile too. There should have been a Federal law against it
How can it jump start the economy? You have to believe in perpetual motion to accept that.
Foreign Masters? That seems a little silly. Are you an isolationist? Do you think ONLY American owned businesses should be allowed here? THen do you think American owned businesses should be prohibitied from having outlets in “foreign’ countries?
The world does not end at our borders.
The foreign companies that employ Americans here in America have created jobs and offered services/ products here.
The millions of people who work for “foreign masters” make money, pay taxes, spend money and create jobs for other Americans HERE.
The deals the foreign masters have here are no different than th deals american masters have in foreign countries.
You have zero idea how a great power works its game. I can say foreign investment is not welcome here while at the same time I have no problem with US corporations reaching globally and investing globally. This is how we used to have it until two decades ago.
You are weak.
You have no idea how great America used to be and could have remained that way but its people caved in and decided to party and indulge egos rather than stay strong and keep American industry and business strong
Just to show you how confused you are....At the same time that Japanese were opening automobile plants here with mega-tax breaks, American companies were barred from doing anything remotely similar in Japan. Why? Because the Nips have pride and look out for their people. We just offshore industry and people like you still have a complacent cow like smile on your face
Go try and open a factory in China. You will be forced to take a 50% partner and within 3-5 years the Chinese will have stolen your technology and make it themselves, market it themselves and force you under
Your philosophy of “free trade” is what has led us to colossal trade deficits and the present economic chaos that comes from a de-industrialized hollowed out economy that resorts to asset inflation and paper speculation on real estate and Wall Street to juice up a sick patient
sorry your philosophy didn’t work for Wilson and it won’t work now.
If it is so onerous for American companies to open in foreign markets WHY would they? Do you think they have and are opening in overseas markets to lose money?
Take a deep breath and come into the 21st century. Of course all is not tilted our way. It hasn’t stopped companies from opening in markets that are skewed not is favor of the American company has it?
btw who would hire the millions who are now hired by foreign companies if you got your way and they were barred from business here?
Your problem might be that you have limited experience. You don’t remember a time when the USA was strong and didn’t run trade deficits and Wall Street wasn’t full of crooks and pond scum that destroy an economy with credit default swaps and mortgage backed securities. When foreign investment here was not needed and not wanted
Japan and China run trade surpluses and do not go begging and borrowing around the world. They behave the way I advocate which is to keep out most foreign investment while they invest abroad
In China’s case they do allow foreign investors but China controls them, not the other way around.
If we did not have Japanese companies here the same workers would be employed by US automobile companies. Japs didn’t create jobs. They stole them. They put others out of business on US soil
How very very sad for you , to live in the past but it is not healthy.
You no matter how angry you get you can’t take the country/ world back to the way you liked it.
We can learn from history but we can’t bring it back
This is our world now and we should work to make the best possible situations we can. not waste time and energy bemoaning what once was.
FWIW Detroit sunk themselves.
Just a little friendly advice. Face reality.
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