Study: 'Clunkers' had weak impact
Cars traded in as part of the Cash for Clunkers program are parked at the Team Ford dealership in Las Vegas, Nev.
TEXT OF INTERVIEW
Bill Radke: The Cash for Clunkers incentive programs rang up 690,000 new vehicle sales. But the auto Web site Edmunds.com is raining on that party with a new study. Here to tell us about it is Marketplace's Ashley Milne-Tyte joining us live. Hi Ashley.
Ashley Milne-Tyte: Hi.
Radke: What does this study say?
Milne-Tyte: Well Edmunds.com looked at the numbers, they sort of looked at car sales trends. And they calculate that most of the cars sold during Cash for Clunkers would've been sold anyway, at some point during the last half of this year. So they say that out of 690,000 car sold, only 125,000 were really added by the Cash for Clunkers program.
Radke: And why is that important?
Milne-Tyte: Well they say because of the price tag. I mean the average rebate for a vehicle traded in during Cash for Clunkers was $4,000. But Edmunds.com says if you look at it in this new light, and consider that most of those cars would've sold anyway, the government was paying more like $24,000 each for the 125,000 cars they say the program really, genuinely brought in. And as you can imagine, the Department of Transportation isn't too delighted with this study, and they've made clear think it's picking up holes in a perfectly good program. And they've pointed out that the program sold 250,000 cars just in the first four days, and it handed a lot of much-needed business to car dealers. And that it really helped give the economy a boost.
Radke: Marketplace's Ashley Milne-Tyte reporting live. Thank you Ashley.
Milne-Tyte: You're welcome.