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Automotive News & Views Cash for Clunkers - Good or Bad Idea?
4110 messages, Last post on Nov 23, 2009 at 11:42 AM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
For questions about how the program works or to discuss program details, please visit our discussion titled, "Cash for Clunkers - Does it Work for You?"
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Replying to: steve_ (Oct 31, 2009 5:55 pm) Yes some of these might be 'pull aheads' but not the volume that he estimates. It's also too early to guess what the volume of 'pull aheads' was. Next Tuesday will give us our first hint.... Here's the key number: -34% csmonitor reports on the 'study' Edmunds’ used a team of statisticians, who examined sales trends for luxury vehicles and others not included in the clunker program. They used those trends to gauge where sales would have been for the industry, absent any stimulus program. These “informed estimates” were independently verified, Edmunds says, by examining transaction data. |
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Replying to: kernick (Oct 31, 2009 7:20 am) Next in line? But the point you miss is that this program was never intended to solve the problems of the recession for the auto industry. It was only intended to give the auto industry a 10% boost in this their darkest year. It did that...but it did it too well and too fast so it was ended. And it did that at no cost to society. In fact in time it will be shown to have had a positive effect on our nation. This sticks in the craw of the negativista's so it's ignored. In addition most people are threatened by numbers so the actual data is ignored because it's all in numerical form.
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Replying to: nbdeuce (Oct 31, 2009 12:24 pm) But then the Feds and the States get to collect increased withholding taxes individuals and increased income taxes from businesses that benefitted from the boost in sales. This is a BIG number. Now the cost is well under $1.5 Billion, maybe even as low as $1 Billion!!! Then there's all the money that won't be spent on fuel on these dead clunks over the next 3 to 7 years. That's money that stays here in the US, in the pockets of the smart folks that are now driving 690,000 new more fuel efficient vehicles. It doesn't go to ExxonMobil and eventually to help support Saudi and it's extremists nor does it help support Iran and its delegates trying to kill our soldiers. Do you like the idea of helping to support the nuclear dreams of Iran by helping to support the international price of oil?
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Replying to: kdhspyder (Oct 31, 2009 6:12 pm) -------------------------------------------------------------- The money D.C. is spending so recklessly will be coming due very soon. Much of it is short term debt. The piper must be paid and the economy must stand on it's own two feet very, very soon. In 2010, few new C4C type programs will be offered - we simply cannot afford it.
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Quoted from Edmunds article - with commets added. The chart below sets forth actual SAAR (Seasonally Adjusted Annual Rate) compared to Edmunds.com's forecasted rate if the program had never been implemented. Actual (or Forecast) If no Cash for Clunkers Difference Sales Volume Jan '09 ................. 9.59 .. 9.59 .. n/a .... 654,922 Feb '09 ................ 9.14 .. 9.14 .. n/a .... 687,182 Mar '09 ................ 9.69 .. 9.69 .. n/a .... 855,146 April '09 ............... 9.20 .. 9.20 .. n/a .... 817,096 May '09 ............... 9.85 .. 9.85 .. n/a .... 923,141 Jun '09 ................ 9.67 .. 9.80 ..-0.13 ... 857,447 Auto sales thru June were already determined before C4C began; they were down 34% Y/Y Jul '09 ............... 11.22 ..10.11 ..1.11 ....995,216 Aug '09 ............. 14.06 ..10.45 ..3.61 .. 1,258,747 Sep '09 ...............9.19 .. 10.63 ..-1.44 .. 744,367 As of the end of 3rd Qtr the auto market was down only 27% Y/Y Oct '09 ..............10.40 .. 10.89 ..-0.49 ......n/a ( unknown ) Nov '09 ............. 10.40 .. 10.82 ..-0.42 ......n/a ( unknown ) Dec '09 ............ 10.61 .. 10.85 ..-0.24 ......n/a ( unknown ) The Edmunds 'guesses' of the SAAR for the latter 6 months of the year are simply that guesses. Based on the first half of the year ( -34% ) it would be wildly optimistic to guess that by the end of the year the auto market would recover to be down only 18% vs 2008, ( 10.85 MM vs 13.20 MM units ). The expectation all during the first half of the year when C4C was being created was that this horrible year would end up at 9.5 to 10.0 million units. Note the SAAR's for the period Jan to Jun in Edmunds own table. What did change as of July 1st was the initiation of the C4C program. This absolutely did kickstart sales during 3rd Qtr such that as of Sept annual LV sales were off by only 27%. This data is incontrovertible. It's clearly shown in Edmunds own stats above. Edmunds whole theory is based on some nebulous magical effect taking place ( coincidentally on July 1 ) that suddenly boosts SAAR from 9.8 MM units to 10.85 MM units by the end of the year. I call BS. |
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Replying to: dodgeman07 (Oct 31, 2009 8:01 pm) The $3 Billion taken from the $787 Billion Stimulus package costs the Treasury about 3% pa. However at least half of that $3 Billion went from one government pocket to another government pocket. It actually never got 'spent'. The rest, maybe as much as $2 Billion or more will come back to the IRS and the state taxing authorities by the end of the year by means of higher withholdings and higher corporate tax payments. This isn't just in the auto industry. It's throughout the entire economy. Vendors to the auto dealer, truckers, steel suppliers to the auto makers, increased withholdings at the auto plants, and last but not least BANKS. The lending that did happen during the program was to premium buyers with impeccable credit. These are the prime clients for any lender. These loans are solidly profitable ( DING !! ) meaning that the banks and lenders will end up paying taxes on the profits from these loans in the coming years. These taxes over the next several years go to the IRS and state taxing agencies. Then ... there are the drivers of these 690,000 vehicles - which are no longer on the road - thus they are NOT going to be spending the extra money on fuel that they would have since they're now driving vehicles significantly more fuel efficient. You worry about how we're going to pay for this. How about worrying about how many of these guzzlers are still being driven on our highways at the rate of 10-15 mpg. There are still tens of millions of these clunkers sucking up extra fuel every day at pumps all over the country and sucking the life out of our economy. If even 10 million of these suckers could be retired and replaced by a newer more efficient whatever then we as a nation wouldn NOT be spending $10-$15 Billion per year on extra fuel. That $10-$15 Billion would stay here in our pockets to self-stimulate our economy. That $10-$15 Billion also would NOT end up supporting Iran, Saudi, Venezuela and others that would do us harm. Wanna bet that gas isn't $3.00 soon? Getting these 700,000 vehicle off the roads is just the first step. Just getting this first step moving will save us $1-2 Billion every year now in $$$ for fuel not used over the next 3 or 5 or 7 years. |
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Replying to: kdhspyder (Oct 31, 2009 8:52 pm)
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Replying to: kdhspyder (Oct 31, 2009 8:52 pm) Another issue you have no clue about. The Feds do not want US to use less fuel. That costs them money. If they did they would not put roadblocks in the law to block fuel efficient vehicles from being sold. That little blip from C4C will not make a nickels difference in our trade deficit.
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Replying to: gagrice (Oct 31, 2009 8:58 pm) Hellooo, yes you're absolutely right. It worked exactly as it was planned to work., i.e. stimulate the auto industry and whatever we in the larger auto industry touch downstream as well. You agree with my argument. Thank you. But the extra benefits are even more far-reaching.
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Replying to: gagrice (Oct 31, 2009 9:01 pm) These 'interests' got their wish when Congress passed the bill in Dec 2007. You might want to take your blinders off to see the wider picture. I understand what you're saying about fuel efficient vehicles generating less gasoline taxes since they use less gallonage....you know what that solution soon will be...increased fuel taxes to make up for the shortfall. But nevertheless we as a nation will end up spending less to support the international price of oil. We keep that money here, yes it may go to higher taxes but it doesn't support enemies. |
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