Cash for clunkers a short term failure:

[Captain_Klink]

September’s light-vehicle sales rate will fall to 8.8 million units, consumer auto site Edmunds.com said. That would be the lowest rate in nearly 28 years, tying the worst demand on record.
After the cash-for-clunkers program boosted August sales to their first year-over-year increase since October 2007, demand has plunged. In at least the last 33 years, the U.S. seasonally adjusted annual rate has only dropped as low as 8.8 million units once -- in December 1981 -- with records stretching back to January 1976.
...
"Many people regard February as the darkest month of the recession, but even then the SAAR was higher, at 9.1 million units," Edmunds.com senior statistician Zhenwei Zhou said in a statement.

for what: lots of fine cars destroyed, gas-guzzling purchasers rewarded - exactly the opposite of what a wise and prudent governor would plan for. And of course, you and I pay for it.
What else is new?

 

[01rangerxl]

Short term thinking has always worked so well for automakers.

 

[Gary Allan]

And Wall St. too. Don't leave them out.

 

[Shannow]

Yep, that was the most predictable of all outcomes.

This stimulus stuff is simply paying peoplr to dig holes, and paying someone else to fill them in...nothing's fixed.

 

[tomcat27]

And if the goal was to help the US Auto makers, it did not do that either - considering the top 10 sold due to C4C were all asian brands - some of them not even produced in N America. So, what was the goal of the program? other than to increase the national debt and increase the tax load on you and me.

 

[TallPaul]

With all the road constuction going on under the stimulus plan, those fuel efficient cars that people got when they traded in their guzzlers are wasting fuel sitting in traffic jams. Likely result is no net gain in fuel savings.

 

[Dieseldoctor]

As someone who works for toyota it has saved our bussiness enough time to regroup and handle the reduced volume. U have no idea how hard it hit

 

[Billy_D]

Close to 700,000 clunkers were taken out of the roads. On average, the new vehicles get 25.4 miles per gallon, compared to 15.8 mpg for the clunkers consumers have traded in. The taxpayers will be benefiting from the cash for clunkers program by the reduced demand for gas. The reduced demand usually helps stabilize prices. The program was a success and not a short term failure.

 

[Quattro Pete]

Let's keep things in perspective. There is about 250 million registered vehicles in the US. 700k is not even 1% of it - it's 0.3%. So, you think that a slightly reduced fuel consumption of 0.3% of vehicles is going to have any meaningful effect on overall fuel demand?

Besides, reduced demand doesn't always translate to lower prices when it comes to fuel. When the oil cartels see reduced demand, they just curtail the supply to ensure the prices stay where they want them to.

 

[CivicFan]

 

[ZZman]

Cash for Clunkers


A vehicle at 15 mpg and 12,000 miles per year uses 800 gallons a year of gasoline.

A vehicle at 25 mpg and 12,000 miles per year uses 480 gallons a year.

So, the average "Cash for Clunkers" transaction will reduce US gasoline consumption by 320 gallons per year.

They claim 700,000 vehicles - so that's 224 million gallons / year.

That equates to a bit over 5 million barrels of oil.

5 million barrels of oil is about ¼ of one day's US consumption.

And, 5 million barrels of oil costs about $350 million dollars at $70/bbl.

So, we all contributed to spending $3 billion to save $350 million.

How good a deal was that ???

 

[Gary Allan]

Quote:
So, we all contributed to spending $3 billion to save $350 million.

How good a deal was that ???


Not good at all if oil will only climb to $70/bbl.

..but I don't think it really matters. I still insist CAFE has/had nothing to do with fuel economy and had more to do with keeping assembly lines full due to mandating that more units be produced to seek profits. If Ford wanted to make money (Crown Vics, Explorers, Lincolns, etc.) it had to produce so many more units to allow it. More drivers consuming fuel, getting service ..more sub assemblies ..more engines ..radiators ..tires ...

 

[jmac]

I expected to be able to say 'I told them so', just not so soon. Even though I may not have expressed the prediction in this venue, it was expressed elsewhere by yours truly.

 

[brianl703]

The repossession business should be booming in a while.

New government program to fix that:

Car
Repossession
Avoidance
Assistance
Program

CRAAP.

 

[rshaw125]

This was predicted by many. As usual the government ignores this and proceeds with the ridiculous program. Apparently there were a lot of good cars crushed that would normally be available as good used cars for people on a very tight budget.
And the government wants to run your health care.

 

[CivicFan]

The government does run about 60% of our health care but that's beyond the point.

The clunker program is over and while it cleaned out the inventories sitting on the dealer lots, it was clear that once it went away, the car sales would go down. If there was no clunker program then there would not have been a spike in sales and the dealers and makers would probably be in a worse shape than they are now.

But it took away 700,000 gas guzzlers off the road so it was a good program as far as I am concerned.

 

[hr1940]

Locked due to the fact it is becoming political