Edmunds.com, the much respected guide to car prices, reviews and auto-geek forums recently wrote on it’s blog; “…that Cash for Clunkers paid out $24,000 for every car that was brought to market under the program, which issued rebates between $3,500 and $4,500 towards the purchase of an energy efficient car.” Edmunds writers Jeannine Fallon and Chintan Talati went on to determine that only 125,000 of the 690,000 cars sold during the Clunkers/Junkers program were deals that would NOT otherwise have been made. THANK THE REBATES because the other 565,000 cars would have eventually been replaced anyway.
The reality is American’s have been trained by the Big 3 to wait for bargain offers, rebates, low interest rates and incentivize leases before buying a car, in much the same way families cut coupons from the Sunday paper before heading to the grocery store. Double coupons, coupon trading and online search engines are an industry based on our desire to “get a bargain”.
However, if you aren’t freaked by the $24,000 per car cost to buy 125k worth of iron, consider the bigger issue here is the response from the WHITE HOUSE about the article. Edmunds is most often recognized for it’s CAR info, not daily news. The WHITE HOUSE social media guru blasting them on the WHITE HOUSE blog elevates the story to TWITTER
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status, and makes one wonder if this is an effort to take the public’s focus off the Health-care showdown, H1N1 Vaccine-debacle or the Troops in Afghanistan. all CURRENT EVENTS, not three month old history. Now don’t get me wrong, I love history, especially when we LEARN FROM IT, otherwise we are destined to repeat it.
When you consider the C4C (cash for clunkers)as another version of economic stimulus to the auto industry, then the total return is about a wash. Count in the dollars spent recirculating through the country’s economic engine via sales tax, registration, employees earning and spending, parts remarketing and the float on the interest the government earned on the backs of the dealers waiting to be paid on those rebates while borrowing from their banks and manufacturers to keep inventory on the lot, which ultimately resulted in a wash because the program paid for itself by moving money. This EXPLANATION would have been the better argument for the WHITE HOUSE to make, rather than the comment about a MARS????
FORGET the claim of people buying cars because they went to the dealership thanks to the hubbub, most of my clients found sticker prices, no selection and mass-confusion. Dealers declared the program a headache to administrate and if there was any ether left in the tank, a complete lack of factory production follow-up left those with money burning a hole in their pocket… no 2010 cars in inventory.
But really folks… the money is spent. Those American’s that had the cash or credit to buy a new car got a SCREAMING DEAL on the Trade Value of their JUNKER while the rest of America, once again paid for it.
The most important thing to consider in all this barking is…the Head Blogger at the WHITE HOUSE needs to have an editorial review before posting, if only for his own image, HOWEVER, more important than his image is that of the President, as stuff like this makes the public aware and ultimately more concerned about “Who is steering the BUS in WASHINGTON?”
WE SHOULD BE ASKING …
Shouldn’t all TAXPAYING AMERICANS, be issued stock in GM and Chrysler, which we can take as a loss on our federal income tax, as these companies are unlikely to repay the $70 Billion in loans?
Are we as American’s going to continue bailing out GM, allow the dismantling of Chrysler by FIAT and or show/fail to register our support/not for the latest automaker showdown: FORD vs. UAW? (I hope the government can keep itself out of this debate.)
Learn more about post-cash 4 clunkers here:
http://www.mycarlady.com/2009/08/03/cash-for-junke…its-the-brakes
http://www.mycarlady.com/2009/08/12/sales-tax-credit-updatesales-tax-credit-update/
http://www.mycarlady.com/2009/08/24/clunkers-ends-so-whats-next
Sarah Lee is an automotive executive with 20+ years of experience. She writes about Cars, and is a staunch consumer advocate on car related subjects. Her company: MY CARLADY is a car buyer’s service committed to getting you the best deal on your next new or pre-owned vehicle. You can reach her at www.mycarlady.com
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