PHOTO -- A 1987 Excalibur Autos Phaeton that was 'junked' for $4,500.
There are several different ways of analyzing the $3 billion Cash For Clunkers rebate program so popular this Summer. To date, no analysis has looked at the economic cost of junking perfectly functioning vehicles before their expiration date. Let's face it, this was an SUV and truck trade-in program for the most part, considering the 18 mpg requirement (or less). There were a lot of 2003 Yukons being scrapped for 2009 models with just slightly higher average gas mileage numbers. Considering all the energy that goes into the creation of one of these mega-ton beasts, I suspect there might be some inefficiency there.
Automotive website Edmunds.com issued a report Thursday that lit up headlines everywhere and drew an angry response from the White House. We also have a link to a Jalopnik slideshow of the 10 most exotic cars destroyed by Clunkers. Plus a few words from Angry Bob.
From CNN
- A total of 690,000 new vehicles were sold under the Cash for Clunkers program last summer, but only 125,000 of those were vehicles that would not have been sold anyway.
- The Cash for Clunkers program gave car buyers rebates of up to $4,500 if they traded in less fuel-efficient vehicles for new vehicles that met certain fuel economy requirements. A total of $3 billion was allotted for those rebates.
- The average rebate was $4,000. But the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009. That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales.
Read the original report from Edmunds
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Update
- Late Thursday the White House fought back with strong words but a weak argument.
- And even later Thursday, Edmunds issued a rebuttal to the White House.
Finally, you might want to check out this slideshow on the Clunkers program. It is a collection of the 10 most exotic cars handed over as part of the program. A Bentley and Excalibur are among the ten. No joke. For $4,500.
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Video: Cash For Clunkers (Angry Bob)
See also:
Dylan Ratigan And Nassim Taleb On The Mistakes Of Cash For Clunkers
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