Cash For Clunkers = Epic Failure

Discussion in 'News / Current Events' started by Bro. Curtis, Aug 11, 2014.

  1. Bro. Curtis

    Bro. Curtis
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    Cash for Clunkers was a 2009 economic stimulus program aimed at increasing new vehicle spending by subsidizing the replacement of older vehicles. Using a regression discontinuity design, we show the increase in sales during the two month program was completely offset during the following seven to nine months, consistent with previous research. However, we also find the program's fuel efficiency restrictions induced households to purchase more fuel efficient but less expensive vehicles, thereby reducing industry revenues by three billion dollars over the entire nine to eleven month period. This highlights the conflict between the stimulus and environmental objectives of the policy.


    http://www.nber.org/papers/w20349


    Also…

    http://dailycaller.com/2014/08/09/o...-shows-cash-for-clunkers-was-an-epic-debacle/
     
  2. carpro

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    Epic fail is right.


    It was a totally idiotic program that badly hurt the people who had the hardest time finding affordable transportation and didn't help the economy or the environment at all.
     
    #2 carpro, Aug 11, 2014
    Last edited by a moderator: Aug 11, 2014
  3. InTheLight

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    The program was a failure. However, you cannot say on the one hand that it forced people to buy more fuel efficient vehicles and then say that did not help the environment.

    I negotiated a new car lease for my mother in December 2009. I was the ONLY customer in the dealership for the 2 1/2 hours I was there and practically stole the car from them. (Chevy Impala)
     
  4. carpro

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    I didn't say that at all.

    It didn't force anyone to buy anything that they weren't going to buy already.
     
  5. Magnetic Poles

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    No, they were not forced. But there are some who were pushed over the edge by the rebate program. It did bump up US auto sales during its run, but if it accomplished its goals, I think is still questionable. I was not a fan of this program.
     
  6. carpro

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    If one of it's goals was to force poor people to pay more for their transportation, it was a huge success. They don't buy new cars.
     
  7. Salty

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    I recently worked for a new car dealership.
    My boss said it was a horrible program.

    The rebate (I think it was called) would not be applied until the govt approved the contract. Oftne that would take a lot of time - so the customer had to wait to take possession of the vehicle. Which meant the salesman had to wait on his commission.......
     
  8. InTheLight

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    True, true. I was combining what Bro.Curtis posted, "the program's fuel efficiency restrictions induced households to purchase more fuel efficient but less expensive vehicles" with your contention that it "didn't help the economy or the environment at all."

    Burning less fuel has got to help the environment, doesn't it?
     
  9. Revmitchell

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    No such thing as a steal on a lease.
     
  10. Magnetic Poles

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    Sure there is. You lease a car, make the payments, pay for the maintenance, and it gets stolen back at the end of the term. :laugh:
     
  11. Revmitchell

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    Well there you go, on that we can agree.
     
  12. InTheLight

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    Whatever...I defer to your vast experience in leasing and/or buying vehicles.
     
  13. carpro

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    I believe that if you dig a little, you will find that most of those "clunkers" were not in regular use to begin with and they were mostly traded for the least fuel efficient new vehicles. (read that to mean SUVs and trucks)

    It was just another misguided effort by the government to control the behavior of people. It was a massive failure. People buy the vehicle they feel suits their needs regardless. But they will take advantage of the governments ignorance of what drives the car market.
     
  14. InTheLight

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    You pay for the depreciation. You pay for 5 oil changes. You don't make a huge down payment, meaning you don't tie up $10,000 or more on something that is going to lose value. You have a factory warranty for the length of the lease. You have all the latest equipment and safety items.

    It makes sense that an 88 year old woman not spend $24,000 buying a vehicle.
     
  15. carpro

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    No. But they can be a good deal if they suit your needs and you know what you're doing.
     
  16. Salty

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    On a lease - just have a good ideal of what your annual mileage will be.

    Over mileage can be expensive.
     

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