Cash for Clunkers Final Numbers

[Balt]

Originally posted by: moparacer
"Basically, this program created a situation much like a mini housing crisis.
What happens when people can't make they're payments? "

Auto Loan bubble! Yay!

And all you guys touting the "get us off foreign oil" and "clean and green" crap might want to dig up the statistics on just how many old cars are on American roads and subtract the CFC cars from it and tell me how much of a difference it made.

{According to the US Bureau of Transit Statistics for 2006 there are 250,851,833 registered passenger vehicles in the US. Out of these roughly 251 million vehicles, 135,399,945 were classified as automobiles, while 99,124,775 were classified as "Other 2 axle, 4 tire vehicles," presumably SUVs and pick-up trucks. Yet another 6,649,337 were classified as vehicles with 2 axles and 6 tires and 2,169,670 were classified as "Truck, combination." There were approximately 6,686,147 motorcycles in the US in 2006.}

The Arabs are a shakin in their shoes now aint they!

And I though the air smell better the last few weeks! Hmmmmmm.....

LOL

No single measure alone is going to make a substantial dent in our dependence on foreign oil. It's going to take a lot of different things.

If we refuse to try any of them with the argument that each one by itself "won't be enough", however, we'll never make any dent at all.

 

[spidey07]

Originally posted by: Balt


No single measure alone is going to make a substantial dent in our dependence on foreign oil. It's going to take a lot of different things.

If we refuse to try any of them with the argument that each one by itself "won't be enough", however, we'll never make any dent at all.

Except for drilling/processing our own oil.

 

[desy]

Sucessful in that they spent the money
Gas tax would have done the same thing and make revenue and not suckering people into taking on more dept, its still credit which is what dumped the economy in the first place.

The most sold car was not a Toyota, it was Chev trucks which is why they are number two on the list for total sales and have zero individual cars.
In order to make the list look like people were buying really efficient econoboxes when they were in fact buying trucks and suv's they split drivetrains engines and similar brands, a chev truck is a gmc with different badges, an escape is still an escape if its two wheel or four wheel etc
I certainly don't begrude the Toyondas on the list as they were really hurting too in the NA economy and where the money goes debate seems inconsequential compared to the folly of the C4C program in the first place

 

[LumbergTech]

kinda funny how american companies announced that they were increasing production significantly as a result of this program and bogus posts like this continue to roll in

 

[spidey07]

Originally posted by: LumbergTech
kinda funny how american companies announced that they were increasing production significantly as a result of this program and bogus posts like this continue to roll in

Every manufacturer saw a big increase in sales from this program. Like I always said - you can incent behavior. It was a good idea and had the intended effect, but it will be short lived.

Now propose my idea of making every new car purchase fully tax deductible for 2 years and watch this economy be saved in one stroke of the pen.

 

[desy]

http://www.nytimes.com/2009/08....html?_r=1&ref=opinion

On average, cars are driven 12,000 miles per year, according to government statistics. Considering that the traded-in clunkers had an average fuel economy of 15.8 m.p.g. while the new ones deliver 24.9 m.p.g., a swap saved some 278 gallons of gas per year ? which would have released almost 2.8 tons of carbon dioxide when burned. Assuming the clunkers would have been driven four more years, the $4,200 average rebate removed 11.2 tons of carbon from the atmosphere, at a cost of some $375 per ton. If they would have been driven five years, the carbon savings cost $300 per ton. And if drivers drive their sleek new wheels more than they drove their old clunkers, the cost of removing carbon from the atmosphere will be even higher.? So how does that compare with the Times? new red-headed, planet-cooling stepchild?


To put this in perspective, an allowance to emit a ton of CO2 costs about $20 on the European Climate Exchange. The Congressional Budget Office estimated that a ton of carbon would be valued at $28 under the cap-and-trade program in the clean energy bill passed by the House in June.

TTAC?s tackled this issue before (coincidentally enough), but it?s news to the Times. And rather than crunch some more numbers, the paper calls for a national gas tax?again, still?and calls it good.

The best tool to induce Americans to drive more fuel-efficient cars would be a gas tax that provided rebates for low-income drivers. Another, though inferior, alternative ? if Congress couldn?t face the political risks of a gas tax ? would be a program that provided a rebate for drivers of clean cars while imposing a fee on drivers of gas hogs.

In any case, as environmental policy, it?s just too expensive to buy clunkers to take them off the road.

 

[tk149]

Originally posted by: dullard

Originally posted by: marincounty
Hey, I was against this program, because it only allowed people with cars that get lousy mileage to get the credits. Looks like most of the stimulus went to foreign automakers.
On the bright side, it did get a lot of unsafe older cars off the road.

It was a small, underfunded program. They had to limit sales somehow. This will help reduce our use of foreign oil, help polute less, stimulated our struggling economy, and of course people still complain.

Think about it. The goverment spent $3 billion. If GM got 17.6% of 690,114 cars, then they sold 121,460 cars. Assuming an average sale price of $25,000, then GM got $3.04 billion dollars from a $3 billion goverment investment. Ford got another $2.48 billion. Crysler wasn't on the list, but it'll be another good chunk of cash to an American company. Right there, the goverment doubled its return and people complain.

That $6B+ of American compay money ultimately goes towards income (companies, or employees) at the auto manufacturers, dealers, and part suppliers. Assuming a 25% average tax rate, the US government will get roughly $1.5 billion right back. And people complain.

What other program that you know of spends government money, gets double the return, and then the government gets a good chunk of that money right back?

Normally, Dullard, I have a lot of respect for your numbers, but the government didn't "double it's return." By your own estimates, it's only getting half of it back.

The government simply time-shifted sales. You can claim that most people who used the Clunkers program can afford their new car, but nobody really knows that for a fact. Only time will tell. The one thing that we do know is that the American public loves to buy things on credit.

 

[tk149]

Originally posted by: b0mbrman

Originally posted by: woodie1
Besides stealing future sales I wonder how many people will default on their loans. Time will tell.

Are people more likely to default on a $15,000 loan or a $19,500 loan?

Are people more likely to take out a $15,000 loan or a $19,500 loan?

 

[rchiu]

Originally posted by: dullard

Originally posted by: marincounty
Hey, I was against this program, because it only allowed people with cars that get lousy mileage to get the credits. Looks like most of the stimulus went to foreign automakers.
On the bright side, it did get a lot of unsafe older cars off the road.

It was a small, underfunded program. They had to limit sales somehow. This will help reduce our use of foreign oil, help polute less, stimulated our struggling economy, and of course people still complain.

Think about it. The goverment spent $3 billion. If GM got 17.6% of 690,114 cars, then they sold 121,460 cars. Assuming an average sale price of $25,000, then GM got $3.04 billion dollars from a $3 billion goverment investment. Ford got another $2.48 billion. Crysler wasn't on the list, but it'll be another good chunk of cash to an American company. Right there, the goverment doubled its return and people complain.

That $6B+ of American compay money ultimately goes towards income (companies, or employees) at the auto manufacturers, dealers, and part suppliers. Assuming a 25% average tax rate, the US government will get roughly $1.5 billion right back. And people complain.

What other program that you know of spends government money, gets double the return, and then the government gets a good chunk of that money right back?

Really, are you sure all these 690k cars wouldn't be purchased if not for this program? All the program did was to give people incentive to buy cars right now. It is not new demand, it is just an artificial spike in demand right now in the expense of future demand.

But hey, what does politicians and their backers care. As long as they can claim something now, who cares about the future.

 

[Engineer]

Originally posted by: spidey07

Originally posted by: LumbergTech
kinda funny how american companies announced that they were increasing production significantly as a result of this program and bogus posts like this continue to roll in

Every manufacturer saw a big increase in sales from this program. Like I always said - you can incent behavior. It was a good idea and had the intended effect, but it will be short lived.

Now propose my idea of making every new car purchase fully tax deductible for 2 years and watch this economy be saved in one stroke of the pen.

That would have been a far better idea than spending the money directly on GM or Chrysler...by far.

:thumbsup:

but alas, it's too late for that now.

 

[Engineer]

Originally posted by: rchiu


Really, are you sure all these 690k cars wouldn't be purchased if not for this program? All the program did was to give people incentive to buy cars right now. It is not new demand, it is just an artificial spike in demand right now in the expense of future demand.

But hey, what does politicians and their backers care. As long as they can claim something now, who cares about the future.

You ask dullard if he was sure, but are you sure? Going from 17 million cars per year to 9 million cars per year is quite a drop. Pent up demand at some point will drive sales to a more normalized rate of 'probably' 12 to 13 million units (within the next 1 to 2 years, IMO).

 

[smashp]

Originally posted by: dullard

Originally posted by: spidey07
That doesn't matter. The profit/money is still leaving the country. Buy American.

The income/money of hundreds of thousands of American workers doesn't matter?

The profit goes to the stock holders

 

[umbrella39]

Originally posted by: soccerballtux
Good. Poor resale value is proof of poor worksmanship. People catch on, if it won't resell, there's probably a reason. GM/Ford were left in the dust.

Protectionism never helps. Claim otherwise, and history has already done the work to show you're wrong.

So I, for one, am glad the sales went to foreign automakers. This is how our standard of living improves-- the wasteful are weeded out and capital is freed for other more worthwhile endeavors (like buying a Toyota). Toyota and Honda wouldn't be having any sales problems if GM were dead.

By propping up GM (or limiting cash/clunkers to "American" cars) we'd be directly getting in the way of an economic recovery.

Not to mention GM's going to shut down all their plants and move them to Mexico anyhow. Toyota still does all the assembly in America.

cough cough try again

 

[BoberFett]

Originally posted by: classy

Originally posted by: BoberFett
Given car purchases prior to the announcement of the C4C program, what would car sales have been anyway? How many people held off on purchases because there was several months worth of rumors that the program was going to be coming later in the year? How many people pushed their planned purchases ahead of schedule due to the program?

Until someone does that kind of analysis, don't jump for joy about the success of the program.

It was a successful program. God you can be such a tool.

And you're a complete failure in basic logic. Congratulations on your success at being a moron.

 

[Engineer]

Originally posted by: soccerballtux
Good. Poor resale value is proof of poor worksmanship. People catch on, if it won't resell, there's probably a reason. GM/Ford were left in the dust.

Protectionism never helps. Claim otherwise, and history has already done the work to show you're wrong.

So I, for one, am glad the sales went to foreign automakers. This is how our standard of living improves-- the wasteful are weeded out and capital is freed for other more worthwhile endeavors (like buying a Toyota). Toyota and Honda wouldn't be having any sales problems if GM were dead.

By propping up GM (or limiting cash/clunkers to "American" cars) we'd be directly getting in the way of an economic recovery.

Not to mention GM's going to shut down all their plants and move them to Mexico anyhow. Toyota still does all the assembly in America.

LOL @ this entire post.

Buying American cars built by Americans isn't protectionism, it's nationalism (something the Chinese do very well).

Ford isn't being left in anyones dust currently. Ford has been the company kicking ass and taking names lately.

As for GM moving to Mexico, that very well may happen as Ford/GM/Chrysler are moving production there.

Toyota doesn't make ALL the assembly in America. There are Canadian plants as well as imports from Japan. Not sure if they have plants in Mexico (yet).

 

[RyanPaulShaffer]

Originally posted by: Engineer

Originally posted by: spidey07

Originally posted by: b0mbrman
For what it's worth, six of the top ten vehicles were made in the U.S. and a seventh was made somewhere else in North America.

That doesn't matter. The profit/money is still leaving the country. Buy American.

BS. Toyota and the others are investing far more money in the US than the so called domestic brands. They (domestics) are building factories in other countries, not here. They (domestics) are closing them down here.

This.

GM to form China venture, invest $293 million

So glad we spent billions bailing out GM to "save the US economy." Hear that? That's the sound of hundreds of millions of tax payer dollars going straight to China. :roll:

I saw an article a bit ago about how GM is going to greatly increase the number of imported Chinese cars they will sell in the US by like 2012 or something. Don't have the link handy...it was a few months ago.

If you really want to "Buy American" nowadays, you'd better seriously think about going with a Toyota or a Honda. The "Big 3" are increasingly off-shoring their work to Mexico and China, while Toyota and Honda keep on building plants here in America. Non-union ones too, from what I've heard. :thumbsup:

You can tell what country your car was built in by the first digits of the VIN.

VIN

My car is a 1996 GM, and it was built in Mexico. So over a decade ago, GM was already off-shoring its labor.

 

[waggy]

Originally posted by: soccerballtux
Good. Poor resale value is proof of poor worksmanship. People catch on, if it won't resell, there's probably a reason. GM/Ford were left in the dust.

Protectionism never helps. Claim otherwise, and history has already done the work to show you're wrong.

So I, for one, am glad the sales went to foreign automakers. This is how our standard of living improves-- the wasteful are weeded out and capital is freed for other more worthwhile endeavors (like buying a Toyota). Toyota and Honda wouldn't be having any sales problems if GM were dead.

By propping up GM (or limiting cash/clunkers to "American" cars) we'd be directly getting in the way of an economic recovery.

Not to mention GM's going to shut down all their plants and move them to Mexico anyhow. Toyota still does all the assembly in America.

so wrong on so many levels.

Ford has always been a good seller. Not to mention recently they have been doing great.

Ford and hyundia are putting far more pressure of Toyota/honda in terms of quality and price. Where toyota/honda have been declining. The main reason toyota/honda (mainly honda) have been doing good is name brand. Honda has a great reputation.

Yes Ford/GM have been outsourcing far to much to Mexico. But don't think Toyota and honda are fine. Toyota is set to shut down a plant in 2010 because of falling sales.

 

[dullard]

Originally posted by: tk149
Normally, Dullard, I have a lot of respect for your numbers, but the government didn't "double it's return." By your own estimates, it's only getting half of it back.

The government simply time-shifted sales. You can claim that most people who used the Clunkers program can afford their new car, but nobody really knows that for a fact. Only time will tell. The one thing that we do know is that the American public loves to buy things on credit.

Originally posted by: Genx87
First off the focus sells for about 14-16K. The escape is a little closer to 25K. But the govt didnt double its return at all. The govt paid 4500 per car. Did it recieve 9000 in taxes back on each purchase?

And where are you getting this mythical 25% tax return? Are the car companies magically turning a profit or something?

Both of you sure like to nitpick fine details and ignore the forest. I clearly stated that the government didn't get all of its money back, then you claim that I said the goverment got double its money back. Please, try a bit harder to think next time.

The government spent X. US companies directly got more than 2X. Call that what you want. So "double the return" was a bad choice of words, but you completely missed my point. In one case the goverment was finally highly EFFICIENT (ie the US got more benefit than the money the government spent) and you complain. If the government was highly inefficient, you'd have a right to complain.

tk149, As for affording the car, either (a) they paid for it outright or (b) both the buyers and a bank thought that they could afford the car. Sure, some will default. But history has shown that most people that buy cars do pay it off. With the recent extreme vigilance of bankers, I have no reason to expect that history will change. That is why I claimed that most will probably pay it off. Do you have any shred of evidence otherwise? Or are you just going to blindly claim that the buyers and the bankers were overwhelmingly wrong and that history won't repeat itself?

Genx87, Only a small percentage of the money goes to car manufacturers. The fact that they don't make a profit is therefore nearly meaningless. It isn't quite meaningless, but it nearly is. Most of the money goes to labor (taxed at an average rate of ~25% for their income levels), services (taxed at an average rate of ~25%), and parts. The money for parts goes to other companies - which is split into profit (if any is probably taxed above 25%), labor (taxed at an average rate of ~25%), services (taxed at an average rate of ~25%), and materials. The money for materials goes to even more companies and that money goes to profit (probably taxed above 25%), labor (taxed at an average rate of ~25%), and services (taxed at an average rate of ~25%). So I just rounded to 25% and called it good. If I'm off by a couple of percent, it really doesn't matter. Care to provide a more detailed and accurate number? If so, I'll revise my posts.

 

[dullard]

Originally posted by: smashp
The profit goes to the stock holders

The profit (which at the moment is basically non-existant, so nothing is going to stock holders) is only a small percentage of the car price. Nothing prevents US citizens from holding stocks in foreign companies. And foreign entities hold a lot of US stocks. It isn't nearly as simple as your statement tries to make it.

 

[dullard]

Originally posted by: rchiu
Really, are you sure all these 690k cars wouldn't be purchased if not for this program? All the program did was to give people incentive to buy cars right now. It is not new demand, it is just an artificial spike in demand right now in the expense of future demand.

Same false argument that I rebutted earlier. All purchases are at the expense of future demand. What are we to do? Stop buying altogether, throw us into a massive depression, just so that we can save this "future demand". What future is that if no one buys, no one has a job, and no one has any money for this future demand?

Did I ever say that all 690k cars wouldn't be purchased? We had an aritificial DROP in demand (sales were off nearly 50% in a year). One of the four government goals was to prop up the drop back to normal levels. Propping something back to normal does not create an artificial spike. What it really did was create sales in a time that they should have been selling but weren't selling. Of course, it was skewed to a unusual population since the government program had limitations.

 

[b0mbrman]

Originally posted by: rchiu

Originally posted by: dullard

Originally posted by: marincounty
Hey, I was against this program, because it only allowed people with cars that get lousy mileage to get the credits. Looks like most of the stimulus went to foreign automakers.
On the bright side, it did get a lot of unsafe older cars off the road.

It was a small, underfunded program. They had to limit sales somehow. This will help reduce our use of foreign oil, help polute less, stimulated our struggling economy, and of course people still complain.

Think about it. The goverment spent $3 billion. If GM got 17.6% of 690,114 cars, then they sold 121,460 cars. Assuming an average sale price of $25,000, then GM got $3.04 billion dollars from a $3 billion goverment investment. Ford got another $2.48 billion. Crysler wasn't on the list, but it'll be another good chunk of cash to an American company. Right there, the goverment doubled its return and people complain.

That $6B+ of American compay money ultimately goes towards income (companies, or employees) at the auto manufacturers, dealers, and part suppliers. Assuming a 25% average tax rate, the US government will get roughly $1.5 billion right back. And people complain.

What other program that you know of spends government money, gets double the return, and then the government gets a good chunk of that money right back?

Really, are you sure all these 690k cars wouldn't be purchased if not for this program? All the program did was to give people incentive to buy cars right now. It is not new demand, it is just an artificial spike in demand right now in the expense of future demand.

But hey, what does politicians and their backers care. As long as they can claim something now, who cares about the future.

How many of the 690k were pulled forward? How many months were they pulled forward?

 

[PottedMeat]

Originally posted by: waggy

Yes Ford/GM have been outsourcing far to much to Mexico. But don't think Toyota and honda are fine. Toyota is set to shut down a plant in 2010 because of falling sales.

Are you talking about NUMMI - 60% Toyota/ 40% GM? I don't think Toyota can suddenly suck up the 40% of costs that GM was taking up at a giant plant in a crap economy.

 

[rudder]

Originally posted by: dullard

Originally posted by: marincounty
Hey, I was against this program, because it only allowed people with cars that get lousy mileage to get the credits. Looks like most of the stimulus went to foreign automakers.
On the bright side, it did get a lot of unsafe older cars off the road.

It was a small, underfunded program. They had to limit sales somehow. This will help reduce our use of foreign oil, help polute less, stimulated our struggling economy, and of course people still complain.

Think about it. The goverment spent $3 billion. If GM got 17.6% of 690,114 cars, then they sold 121,460 cars. Assuming an average sale price of $25,000, then GM got $3.04 billion dollars from a $3 billion goverment investment. Ford got another $2.48 billion. Crysler wasn't on the list, but it'll be another good chunk of cash to an American company. Right there, the goverment's expenditures resulted in double that amount going to American companies and people complain.

That $6B+ of American compay money ultimately goes towards income (companies, or employees) at the auto manufacturers, dealers, and part suppliers. Assuming a 25% average tax rate, the US government will get roughly $1.5 billion right back. And people complain.

What other program that you know of spends government money, gets double the return, and then the government gets a good chunk of that money right back?

Remember after 9/11 when car sales tanked especially domestic brands? The big three came up with 0% financing annd other gimmicks? All that it caused was a compression of sorts in car buying. Sales happened faster than they normally would have. Afterwards when the glow wore off.. car sales fell back to the levels that called for the incentives. And to further pour salt in the wound... resale values for the big 3 autos tanked.

you use some sort of fuzzy math but in the end increasing the tax flow will not stimulate the economy. Sure there is nice little boost, obama is happy, phokus is happy, etc. Lets all move on to the dollars for dishwashers program.

 

[b0mbrman]

Originally posted by: tk149

Originally posted by: b0mbrman

Originally posted by: woodie1
Besides stealing future sales I wonder how many people will default on their loans. Time will tell.

Are people more likely to default on a $15,000 loan or a $19,500 loan?

Are people more likely to take out a $15,000 loan or a $19,500 loan?

Would $15,000 loans be available without Cash For Clunkers?

More importantly, would $15,001 to $19,499 loans be available without Cash For Clunkers?

 

[blackangst1]

Originally posted by: b0mbrman

Originally posted by: tk149

Originally posted by: b0mbrman

Originally posted by: woodie1
Besides stealing future sales I wonder how many people will default on their loans. Time will tell.

Are people more likely to default on a $15,000 loan or a $19,500 loan?

Are people more likely to take out a $15,000 loan or a $19,500 loan?

Would $15,000 loans be available without Cash For Clunkers?

More importantly, would $15,001 to $19,499 loans be available without Cash For Clunkers?

Yes. This program did not lower financing requirements, nor did it create any new financing opportunities.