Cash for Clunkers Program Turns Out to be a Clunker … Tax Payers Pay $24,000 Per Car


The might have want to have called it “a lot of cash for clunkers.” Tax  payers paid a total of $24,000 per clunker sold. 

Turns out that the much ballyhooed Obama government cash give away program “Cash for Clunkers” was a real clunker. Under the redistribution of wealth subsidy program, a total of 690K new vehicles were sold; however, according to the automotive web site only 125K of those were vehicles that would not have been sold anyway. So not only did foreign car makers make a mint off the “Clunkers” program, tax payers paid about $24K per vehicle. What a bargain. We can hardly wait to see how the government will handle health care.


Making matters worse, a fabricated incentive car buying plan contributed heavily to the US economy’s 3red quarter expansion. Of the 3.5% increase, 1.7% came from car sales. Of course what percentage of the remaining 1.8% increase was from the government subsidy first time home buyers tax break? However, that is another post for another time.

However, here is some food for thought, what is going to happen to the auto sales in the future when some 125K individuals just pushed up the date they would have purchased a vehicle and only artificially enhanced this quarters economic numbers? Also, out of the people who bought cars, how many did so because of the $4000 rebate and may not be able to pay the car loans? Sounds a bit similar to the mortgage crisis that go us into this mess in the first place. Can we look forward in the future to a bail out of the cash for clunkers participants?

The fact of the matter is that all the Cash for Clunkers program did was make 125,000 folks buy a car earlier than they normally would have du to a cash give away. That cash was your hard earned tax dollars.

So what happened when the truth came out about the unintended consequences of Obama’s Clunkers program? The White House blew a gasket. Because this “my way or the highway” White House never shoots the messenger. The defensive White House fired back in typical fashion.

“It is unfortunate that 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.”

Is, a reputable resource in the auto industry the new Fox News? I guess they are bias against Obama as well? How about the fact that they are just strictly stating the numbers without political Obama spin.

“This analysis is valuable for two reasons,” said CEO Jeremy Anwyl. “First, it can form the basis for a complete assessment of the program’s impact and costs.  Second — and more important — it can help us to understand the true state of auto sales and the economy.” Responds to White House Comments on Cash for Clunkers Analysis

Apparently, the $24,000 figure caught many by surprise. It shouldn’t have. The truth is that consumer incentive programs are always hugely expensive when calculated by incremental sales — always in the tens of thousands of dollars. Cash for Clunkers was no exception.

The White House claims that our analysis was based on car sales on Mars and that on Earth, the marketplace is connected. We agree the marketplace is connected. In fact, that is exactly the basis of our analysis.

It is also claimed we missed the possibility that Cash for Clunkers generated excitement and consumers bought vehicles even if they didn’t qualify for the program — a claim that has been widely supported by anecdote but by little analysis. It does, after all, seem a bit odd that masses of consumers would elect to buy a vehicle because of a program for which they don’t qualify — doubly so when you add in the fact that prices shot up during Cash for Clunkers, creating a disincentive to buy.

If you liked this post, you may also like these:

  • Only 39% Approve of Cash for Clunkers Program for Appliances … What Next Cash for Trash?
  • Cash for Clunkers Administrative Nightmare, a Preview of Government Run Health Care
  • 54% of Americans Oppose “Cash for Clunkers” Plan … Next up Cash for Dunkers
  • SNL Rips Barack Obama on Excessive Spending, Debt, Jobs, Stimulus, Obamacare, Cash for Clunkers …” I Liked to be Kissed when Someone is Doing Sex to Me!!!”
  • Cash For Clunkers … Stimulating the American Economy or Foreign One’s? 54% of Americans Against It

  • Comments

    19 Responses to “Cash for Clunkers Program Turns Out to be a Clunker … Tax Payers Pay $24,000 Per Car”

    1. Rusty Bridges on October 30th, 2009 8:03 am

      Damn, if they would have given every tax payer $24,000 they would have turned that money around and each bought a car or boat or motorcycle I bet.

      But I guess I missed the point of the program.

    2. Scott on October 30th, 2009 8:37 am

      And to boot, people bought mostly made Japanese cars! And most of the cars bought were CHEAPER than $24K…UNREAL!

    3. Scott on October 30th, 2009 8:38 am

      They should start calling the Prez…O-BUNGLE!

    4. super dave on October 30th, 2009 9:01 am

      this is the obama administration’s motto.

    5. flutter1 on October 30th, 2009 9:33 am

      Add the cash for clunkers program to some others examples of government incompetence:

      Department of Defense’s $640 toilet seat
      and $436 hammer

      National Park Service’s $797,400 outhouse

      Yep that outhouse is a perfect example of this country’s flushing taxpayer’s money down the can. Why not, its not their money.

    6. rightknight on October 30th, 2009 9:49 am

      If 250K used cars are destroyed instead of ‘kept up’,
      hundreds of small businesses that repair cars and
      supply replacement parts kiss their jobs Goodbye!
      Thank you Social Planners.

    7. tuyvnsurvivor on October 30th, 2009 10:36 am

      Perhaps there should be manditory simple economics classes for successful political liars, where Obama’s cannot cheat on the exam, and just easy enough a Burris can pass it. However, let us give these courses to all legislators.

      We have legislators overseeing things all the way up to the imputant SEC; legislators voting on financial matters they have no clue of understanding. When did we last hear of a legislator digging in to study, for him or herself? Which one of them could long term trade wallstreet issues for a profit? Start a business from an old shoe and make it succeed with sweat? Ride in an old truck without campaigning? Which treasures our freedom more than their power ego? —Too many are arrogant voting moron’s. My side, the other side…individual voters — voting moron’s as well, far too often elect the wrong people and send them to office for a mirror reflection.

      The country’s people seeks and absolutely must have “change” instantly. But myself — for my kids and grandkid, I continue to store food, keep my field ready to plant and keep seeds, maintain flocks, build a smokehouse and root cellar, put back hard wear clothes, plant more fruit trees….because and so it will go….

    8. dotratc on October 30th, 2009 12:27 pm

      Cash for clunkers was an unqualified success and is one of the initiatives that has been identified as key to helping end the worst recession since the 1930″s (inherited from the previous administration).

    9. Mike Bates on October 30th, 2009 2:23 pm

      There where so many restrictions with this clunker deal i didn’t even bother to take advantage seems like a big fraud deal to me.

    10. rightknight on October 30th, 2009 2:32 pm

      Costing taxpayers $24,000 per car sold (mostly from Japan,
      Korea) the unmitigated failure of the Clunk Job Payout is
      responsible for more misery and lost jobs in the US. Barry
      and the Corruption Gang are on a mission to destroy our
      economy. Any increase in GDP is attributed to the increase
      in Generational Theft and Government idiocy! No ‘saved jobs’,
      no ‘new private sector jobs’, no nothin’. Abject Failure!

    11. tuyvnsurvivor on October 30th, 2009 2:54 pm

      8, I have traded stocks for a living going on 14 years…at a profit. My opinion based on that, though others quailfications might beat my own. I thought then and now, the better thing for the economy would have been to leave things to fail that should fail. Let investors pick up the pieces and make a sturdier model.

      Then and now I see no constitutional provission for the gov to step in and decide which business should get free money and which does not. Which business or industry is worth saving and which not…what kind of dictorship make’s such a descission?

      Trader friends rumage around continually trying to figure the better ways to file civil suits on some players once they are out of office. Anyone can see what was done was wrong. perhaps someone will eventually figure out a prosess by which to pelosi on someone.

    12. Carpe on October 30th, 2009 3:55 pm

      dotratc on October 30th, 2009 12:27 pm

      “Cash for clunkers was an unqualified success”


      You see in Obama’s continuation of the International New World Order

      bad is good

      “Never waste a good crisis, it is actually a golden opportunity”

      Diseases are wonderful, we should spread them globally as quickly as possible.

      WASHINGTON, Oct. 30 (AP) – (Kyodo)—U.S. President Barack Obama signed legislation Friday that finalized the cancellation of a decades-old ban on U.S. entry for those infected with the AIDS virus.

      Obama called the original ban a “decision rooted in fear rather than fact,” adding that while progress has been made in “reducing the stigma” of the disease, the United States had remained one of a dozen nations still preventing travel of HIV/AIDS patients.
      “It’s a step that will encourage people to get tested and get treatment, it’s a step that will keep families together, and it’s a step that will save lives,” Obama said at the White House.

    13. dotratc on October 30th, 2009 4:53 pm

      #11, you seem to be confused. The article is not about government bailouts, it was about the cash for clunkers program (which was universally praised as a successful stimulus to the economy on two different levels – manufacturing and retail).

    14. Cars4Charities on November 1st, 2009 12:22 pm

      Cash for clunker did not just hurt taxpayers and the poor, it also hurt car repair shops and car donation.
      SM: You are 100% correct.

      People who work on older cars jobs I guess do not matter.

      Charities that get old cars to help people out who are less fortunate do not matter either to Obama.

      What about young kids and poor folk who cannot afford new cars? Think about the amount of used cars that they can afford just taken out of the supply? But Obama does not care about thses people.

      This is what happens when governmnt meddles with private markets.

    15. Scott on November 2nd, 2009 10:36 am

      doctrac – get a clue moron…unemployment at 10%, almost 17-20% in specific areas in the country.

      The Clunkers program was NOT universally assailed for helping the economy. In fact, it hurt the economy, costing taxpayers in the long run. You have no idea how economics works if you make an UNQUALIFIED moronic typical liberal talking point such as the one your stupidly made.

      Everybody talks about how the DOW made it back to 10,000, but where were the loud mouthed liberals and Joe Biden when the DOW dropped 250 points on Friday?

      BTW, doctrac, Obama used ‘stimulus’ funds for the clunker program so in essence IT IS ABOUT THE BOGUS STIMULUS. Recess is over time to go back to class….

    16. SNL Rips Barack Obama on Excessive Spending, Debt, Jobs, Stimulus, Obamacare, Cash for Clunkers …” I Liked to be Kissed when Someone is Doing Sex to Me!!!” | Scared Monkeys on November 23rd, 2009 7:54 am

      [...] President: And this “Cash for Clunkers” program, I am to understand that you purchased many of these clunkers with our money [...]

    17. Obama- It’s the economy, stupid! « Kilburn Hall’s Weblog on November 25th, 2009 12:28 pm

      [...] President: And this “Cash for Clunkers” program, I am to understand that you purchased many of these clunkers with our money … Just so [...]

    18. Jared M. on February 2nd, 2010 9:55 am

      Cash for Clunkers has made it hard for me to find a cheap, decent used vehicle.

    19. More Executive Orders from The Imperial President Obama Creating “Council on Climate Preparedness and Resilience” to Implement “Climate Change” Agenda | Scared Monkeys on November 2nd, 2013 10:26 am

      [...] to you by the president who delivered “cash for clunkers,” the “billion dollar “stimulus” plan, promises of a job recovery and Obamacare [...]

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