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http://money.cnn.com/2009/10/28/autos/clunkers_analysis/index.htm
Auto sales analysts at Edmunds.com say the pricey program resulted in relatively few additional car sales.
Auto sales analysts at Edmunds.com say the pricey program resulted in relatively few additional car sales.
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, according to Edmunds.com. That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales.
"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. "There can be no doubt that CARS drummed up more business for car dealers at a time when they needed help the most."
In order to determine whether these sales would have happened anyway,
Edmunds.com analysts looked at sales of luxury cars and other vehicles not included under the Clunkers program.
Using traditional relationships between sales volumes of those vehicles and the types of vehicles sold under Cash for Clunkers, Edmunds.com projected what sales would normally have been during the Cash for Clunkers period and in the weeks after.