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.....
5 comments:
The worst part is those who need "beater" cars as second or student transportation. This will raise the price on what's left in the chain.
I agree with Norma that the worst part is the destruction of 700,000 running cars, many in good shape. Not on;y will cause the price of used cars to go up, it already has cost auto repair shops and car donation charities a lot of money.
What a nice blog you have..thanks for all this information
1. The program had significant positive effects for the economy:
a. Dealers were able to move inventory, in some cases 2007 and 2008 models.
b. Car Manufacturing was reactivated: thousands of workers came back to their jobs. Millions of dollars were paid in salaries again and this money eventually came back to their local economies.
c. Different Taxes were generated (local, state and federal)
d. Dealerships hired thousands of people. The income that they received eventually helped support families and was spent or saved, something that Americans are not so used to do.
2. Buyer received the $4500 over car dealerships rebates. The incentive was real and over the rebates. You might not had made your research correctly but none of the brand did what you claim happened. I purchased a vehicle the last day of August and I didn’t have to use a clunker to get $10K rebate on the car I purchase. I could have used an extra $4,500 but I did not have a car to trade.
3. The program was created thinking about the thousands of entrepreneurs that had risked their personal assets investing in business such as car dealerships and had strongly contributed to the US economy for dozens of years. But also a lot of peripheral industries were benefit from such incentives. If you support capitalism, which I think you do because your calling Obama names, you can’t forbid open competition and allow only the American brands to receive a benefit. But you could contribute more by buying American made only. Now, be honest with all your bloggers: are any of the cloths you are wearing at this precise moment had been made in America or are they made in an Asian Country? Made in China right? I thought so……How about your appliances, or … what kind of car do you drive? Don’t you think is fair that you take action and do as you preach?
You call yourself conservative and make fun of your president and call him a socialist? You are an educated person with a CPA. I’m also a CPA and I certainly can understand we could have differences of opinion over an economic issue but calling your own President socialist?, You should be ashamed of yourself. You should know better that this unlucky President is trying to help and clean the big mess that your state representatives and Bush did to this great Country. Are you also ashamed of calling yourself Republican too? What kind of example are you setting for your kids?
Go to China. Stay there. Americans don’t need more people like you
In typical liberal fashion, you commented on something I didn't even say on this post.
First, nearly the entire post was an excerpt from Edmonds.com who knows more about the auto business than you or I.
Second, before Obama the US owned no auto businesses. After Obama, they own two. If that isn't socialism, what is it?
Third, China's policies are closer to your beliefs than mine. You should live there.
Fourth, I don't know how you passed the CPA exam if you're too much of a dumb ass to figure out 1, 2 & 3.
I think you're lying.
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