1. According to this report from Edmunds, sales of new vehicles in September 2009 fell off a cliff, dropping 41% from August 2009 and down 23% from September 2008. This shows that the primary sales effect of the “Cash for Clunkers” program was to harvest sales that would otherwise have occurred later in the year and compress them into an earlier time period. Gosh, what a boon to car dealers. I hope their glorious August was worth the September hangover.
2. An economic analysis by Citigroup concluded that buyers received little or no financial benefit from the Cash for Clunkers programs because the $4500 government credit essentially replaced discounts and incentives that buyers would have received from the dealers themselves.
3. Foreign car companies did better than GM, Ford or Chrysler in sales of new cars under the clunkers program. Brilliant. The taxpayers own most of GM but our government feeds the competition.
4. The dramatic drop in sales in September also supports an argument that many economists have about Cash for Clunkers: The buyers were wealthier folks who would have purchased new cars anyway. We the taxpayers just helped them out. The less wealthy are still driving their clunkers because they couldn’t qualify for a car loan. That’s probably a good thing.
Don't forget that the clunkers turned in would have filtered down replacing even bigger junkers on the auto food chain. Unfortunately, with the lack of used car inventory people with those huge gas hogs will get to keep them for a little while longer.
Read the whole thing here.....