# Edmunds publishes Cash-for-Clunkers analysis **URL:** \ **Category:** Great Debates\ **Created:** [November 2, 2009, 4:56pm UTC](https://boards.straightdope.com/t/edmunds-publishes-cash-for-clunkers-analysis/516065 "2009-11-02T16:56:43Z")\ **Posts on this page:** 11\ **Page:** 3
**Author:** ![Hellestal](https://avatars.discourse-cdn.com/v4/letter/h/3ab097/32.png) [@Hellestal](https://boards.straightdope.com/u/Hellestal)\ **Post date:** [November 7, 2009, 4:30am UTC](https://boards.straightdope.com/t/edmunds-publishes-cash-for-clunkers-analysis/516065/41 "2009-11-07T04:30:28Z")
> [@Sam\_Stone](#): > > First of all, no one has suggested a multiplier that high. I think Christina Romer’s estimate for a multiplier was around 1.5 And plenty of economists dispute that. Other studies have shown historical multipliers of less than one. The initial estimates were 1.6 for spending and 1.0 for tax cuts. And Romer’s own research indicates that her figures are more likely to be underestimates than overestimates because of omitted variable bias. I don’t think I’ll have time to go through any of these figures myself, but the CEA published its own evaluation of the cash-for-clunkers program, [available here](http://www.whitehouse.gov/administration/eop/cea/CarAllowanceRebateSystem/). From what I can tell, they think it was effective, but of course, they’re a part of the administration. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [November 10, 2009, 9:49pm UTC](https://boards.straightdope.com/t/edmunds-publishes-cash-for-clunkers-analysis/516065/42 "2009-11-10T21:49:31Z")
Detroit papers said in Michigan about 85 % of the cars bought in the program were the Big 3. Across the nation it was about 43 % American cars. ---
**Author:** ![athelas](https://avatars.discourse-cdn.com/v4/letter/a/5e9695/32.png) [@athelas](https://boards.straightdope.com/u/athelas)\ **Post date:** [November 11, 2009, 1:20am UTC](https://boards.straightdope.com/t/edmunds-publishes-cash-for-clunkers-analysis/516065/43 "2009-11-11T01:20:00Z")
Let’s not forget, either, that many of the “extra sales” may simply have been people replacing cars a month or two earlier than they would have otherwise. In other words we may see a slump in car sales simply because of this drag-forward effect. ---
**Author:** ![mswas](https://avatars.discourse-cdn.com/v4/letter/m/e99b99/32.png) [@mswas](https://boards.straightdope.com/u/mswas)\ **Post date:** [November 11, 2009, 2:12am UTC](https://boards.straightdope.com/t/edmunds-publishes-cash-for-clunkers-analysis/516065/44 "2009-11-11T02:12:32Z")
Heh, I think Rush Limbaugh nailed it. Moved third quarter auto sales to the first. ---
**Author:** ![smiling\_bandit](https://avatars.discourse-cdn.com/v4/letter/s/e9a140/32.png) [@smiling\_bandit](https://boards.straightdope.com/u/smiling_bandit)\ **Post date:** [November 11, 2009, 2:57am UTC](https://boards.straightdope.com/t/edmunds-publishes-cash-for-clunkers-analysis/516065/45 "2009-11-11T02:57:26Z")
> [@athelas](#): > > Let’s not forget, either, that many of the “extra sales” may simply have been people replacing cars a month or two earlier than they would have otherwise. In other words we may see a slump in car sales simply because of this drag-forward effect. In fact, the analysis shows exactly that. ---
**Author:** ![mhendo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mhendo/32/3159_2.png) [@mhendo](https://boards.straightdope.com/u/mhendo)\ **Post date:** [November 11, 2009, 3:16am UTC](https://boards.straightdope.com/t/edmunds-publishes-cash-for-clunkers-analysis/516065/46 "2009-11-11T03:16:44Z")
> [@gonzomax](#): > > Detroit papers said in Michigan about 85 % of the cars bought in the program were the Big 3. Across the nation it was about 43 % American cars. I have the complete CARS database on my computer, and i ran the numbers on this. The figures i got were close, but not quite the same. For the US, i got: \*\*260,546 Big 3 677,081 Total 39.48%\*\* For Michigan, i got: \*\*24,903 Big 3 31,256 Total 79.67%\*\* Now, it could be that, in my ignorance of every make owned by the Big 3, i’ve missed one or two makes. Below is the complete list of Makes from the CARS database, followed by the list of makes that i selected as being part of the Big 3. See if i’ve made any errors: **Makes:** Trade\_in\_make Acura Alfa Romeo AM General American Motor ASC Incorporat Aston Martin Audi Aurora Cars Lt Austin Rover BMW Buick Cadillac CCC Engineerin Chevrolet Chrysler Dodge Eagle Excalibur Auto Federal Coach Ford General Motors GMC Honda Hyundai Import Trade S Infiniti Isuzu J.K. Motors Jaguar Jeep Kia Laforza Automo Lambda Control Land Rover Lexus Lincoln Maserati Mazda Mercedes-Benz Mercury Merkur Mitsubishi Nissan Oldsmobile PAS, Inc/GMC Peugeot Plymouth Pontiac Porsche Roush Performa Saab Saturn Sterling Subaru Suzuki Toyota TVR Engineerin Volkswagen Volvo Wallace Enviro **Big 3:** Buick Cadillac Chevrolet GMC Pontiac Saturn Ford Lincoln Mercury Chrysler Dodge Jeep Oldsmobile Eagle General Motors Plymouth I left out Volvo, even though Ford owns it. Maybe it should go in, but Volvos accounted for fewer that 1,000 CARS transactions, so it wouldn’t make much of a difference. I’m not including Mazda, because Ford only has a 13% share. ---
**Author:** ![Rick](https://avatars.discourse-cdn.com/v4/letter/r/9f8e36/32.png) [@Rick](https://boards.straightdope.com/u/Rick)\ **Post date:** [November 11, 2009, 5:36am UTC](https://boards.straightdope.com/t/edmunds-publishes-cash-for-clunkers-analysis/516065/47 "2009-11-11T05:36:46Z")
OK would you guys like a little first hand info on C4C? I am a service manager at a car dealership. I was responsible for the destruction of the clunkers that were turned in, and I drove all of them at my dealership. Furthermore as a member of management I aware of car sales both new and used on a monthly basis. From January til C4C my dealership sold about 50 new and used cars per month. Pretty much like clockwork. About 65% used 35% new. C4C came along. The first month we sold 75 cars total. The second month we sold 100 cars total. (round numbers, I think the second month might have been 103, but I don’t recall) We held just about the same percentage of new to used. We did a total of eight, count them eight clunker deals. the month after C4C we were back to 50 cars. So for the cost of 8 rebates we sold 175 cars where historically we would have sold 100. By my math that is a 75% sales increase. But the average fuel mileage was 16MPG! you say. Nope sorry, trust me there has never been a more aptly named government program that cash for **clunkers**. The only way it could have been more aptly named would be if they called it cash for shitboxes. You can’t compare the emissions or MPG of these cars when they were new, they aren’t new and were probably gross polluters. From an environmental point of view this was a home run from what I saw. Out of the 8 clunkers I had, I think that 6 of them would be totally unable to achieve 16 mpg in the condition they were in. I would be amazed if three of them could hit 6 MPG. These cars were in TERRIBLE condition. IIRC I posted in a thread about C4C when the program was going on that I probably had enough money in my pocket to cover the actual total cash value of the first 4 cars that were traded in. Example 90 something Ford Exploder. Not a straight panel on the car. 186,000 miles. Can ran on maybe 6 cylinders, too bad it was a V8. Interior falling apart, check engine light on, AC inop, bad transmission, bald tires, and the radio didn’t work. What is this fine auto worth? $50? the next three were no better. There was a downside, my service business when down in September as a number of people that would have normally brought their car into my shop in September traded them in during July and Aug, so my service business was off. ---
**Author:** ![mhendo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mhendo/32/3159_2.png) [@mhendo](https://boards.straightdope.com/u/mhendo)\ **Post date:** [November 11, 2009, 5:48am UTC](https://boards.straightdope.com/t/edmunds-publishes-cash-for-clunkers-analysis/516065/48 "2009-11-11T05:48:58Z")
What sort of cars does your dealership sell, **Rick**? I was under the impression that you were a Volvo guy. Is that still correct? ---
**Author:** ![mhendo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mhendo/32/3159_2.png) [@mhendo](https://boards.straightdope.com/u/mhendo)\ **Post date:** [November 11, 2009, 7:14am UTC](https://boards.straightdope.com/t/edmunds-publishes-cash-for-clunkers-analysis/516065/49 "2009-11-11T07:14:42Z")
While i don’t doubt your numbers, **Rick** , my first response is to scream the rallying cry of statisticians: Small sample size!!! By your own admission, you did a total of 8 C4C deals. Probably doesn’t make your dealership a representative sample for the program. Furthermore, you say that the program netted you 75 extra sales. Leaving aside the whole “correlation doesn’t equal causation” issue for a moment, and assuming that all 8 of your C4C deals received the maximum allowance of $4500, this means that you netted 75 extra sales for a total cost to the taxpayer of $36,000, or a cost of just over $500 per incremental sale. If the program as a whole had indeed achieved this level of efficiency, there’s a good chance i’d be cheering it right now. If your figures had carried over to the whole industry, the program would have resulted in almost 6 million (!!) extra car sales over the life of the program. But your figures are atypical. Even the National Automobile Dealers Association economist, who argues that the program was a success, claims a cost of $4,587 per extra vehicle sale, and the President’s Council of Economic Advisers’ most optimistic estimate is that the program increased overall 2009 sales by about 560,000 cars. I’m not going to argue with you about the fuel economy of the clunkers. I’m sure you’re right that plenty of the cars brought in under the program were poorly-maintained shitheaps that belched smoke, burned oil, and probably got about 14mpg in real-life driving. It’s good to get cars like this off the roads. I still maintain my objection, however, to a program like this subsidizing V8 trucks and SUVs that barely manage 20mpg on the highway. I also think that the upper limit on the price of the new vehicles was too high, at $45000. With the full credit, such a vehicle still costs the buyer over $40,000. I don’t think, in a time of economic belt-tightening, that we should be handing out thousands of bucks to people who can afford to drop 40 grand on a new car. We had a Doper who was searching BMW dealers trying to find one who would do a C4C on a new [335d](http://www.caranddriver.com/reviews/car/09q2/2009_bmw_335d-road_test). As it turned out, this Doper’s local dealers weren’t very interested in participating in CARS, but according to the database over 100 335d’s were sold under the program. That’s an expensive luxury sports sedan, and anyone who can afford one shouldn’t be getting 10 percent of the purchase price subsidized by the taxpayer. And all this doesn’t even touch on the effect that the program had on the used car market, driving up prices for the very people who can least afford to pay them. ---
**Author:** ![Grumman](https://avatars.discourse-cdn.com/v4/letter/g/43a26b/32.png) [@Grumman](https://boards.straightdope.com/u/Grumman)\ **Post date:** [November 11, 2009, 7:38am UTC](https://boards.straightdope.com/t/edmunds-publishes-cash-for-clunkers-analysis/516065/50 "2009-11-11T07:38:33Z")
> [@mhendo](#): > > That’s an expensive luxury sports sedan, and anyone who can afford one shouldn’t be getting 10 percent of the purchase price subsidized by the taxpayer. Anyone who can afford one is going to be paying at least 10% more of the purchase price in taxes anyway, so you’re not subsidising anything. Even ignoring everything except federal income tax, if they’re in a 35% tax bracket all this means is that you’re charging them 145% instead of 155% of the purchase price. ---
**Author:** ![mhendo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mhendo/32/3159_2.png) [@mhendo](https://boards.straightdope.com/u/mhendo)\ **Post date:** [November 11, 2009, 7:43am UTC](https://boards.straightdope.com/t/edmunds-publishes-cash-for-clunkers-analysis/516065/51 "2009-11-11T07:43:48Z")
> [@Grumman](#): > > Anyone who can afford one is going to be paying at least 10% more of the purchase price in taxes anyway, so you’re not subsidising anything. Even ignoring everything except federal income tax, if they’re in a 35% tax bracket all this means is that you’re charging them 145% instead of 155% of the purchase price. Irrelevant. The income tax and other tax burdens were already in place. These people were already paying $X in taxes anyway. The only thing that changes with the CARS program is that they get $4500 that they would not otherwise have received. [Previous page](https://boards.straightdope.com/t/edmunds-publishes-cash-for-clunkers-analysis/516065.md?page=2)