Alas, we thought it might be too good to be true: The Cash for Clunkers program wasn't the runaway success elected officials claimed it was. Who knew?
Edmunds.com estimates that only 125,000 of the 690,000 cars bought during the program were actually tied to the program. Based on trend analysis by makes and models, the other cars would have been bought anyway. Many of those cars were really justed advanced sales of future cars, a stimulus version of robbing Peter (October) to pay Paul (July). That works out to $24,000 per car for taxpayers according to CNNMoney.com:
"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."
What was the response from the White House (the one that promised evidence-based policy decisions)? According to CNNMoney.com:
"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."