Automotive website Edmunds.com injected fuel into the combustible debate over the Cash for Clunkers program today, saying its analysts found most of the 690,000 vehicles sold under the program would have been bought anyway. The result: the government and U.S. taxpayers paid dearly for the 125,000 extra car purchases believed to have been triggered by the program.
A total of $3 billion was allotted for the program, which offered owners of gas-guzzling cars and trucks up to $4,500 in rebates for purchasing a more fuel efficient vehicle. The Edmunds.com study looked at sales of luxury cars and other vehicles not covered by the Clunkers program, comparing the usual relationship between those sales figures and what happened in the weeks during and just after the Clunkers promotion. Just 20% of the cars bought in the program came from the "stimulus" effort, the analysts concluded.
The relatively small incremental increase over the number of car sales that would have happened anyway during this time means that the effective cost of these vehicles to taxpayers was $24,000 each.
"Our research
indicates that without the Cash for Clunkers program, many customers
would not have traded in an old vehicle when making a new purchase,"
Edmunds.com Senior Analyst David Tompkins, PhD told AutoObserver.com.
"That may give some credence to the environmental claims, but
unfortunately the economic claims have been rendered quite weak."
Dealers faced inventory pressures in September due to the Clunkers program, hurting sales. October sales figures are expected to be better, though Edmunds projected that sales would have been even higher this month without the program.
The Obama administration challenged the premise of the study, noting that the program contributed to a rise in the nation's gross domestic product for the third quarter.
"It is unfortunate that Edmunds.com has had nothing but negative things to say about a wildly successful program that sold nearly 250,000 cars in its first four days alone," said Bill Adams, spokesman for the Department of Transportation.
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