The federal Cash for Clunkers program that officially launched today will cost taxpayers $20,000 apiece, according to auto website Edmunds.com.
That is in order to drive about 50,000 incremental new car sales.
"How is this possible? Edmunds.com's research shows that typically 200,000 vehicles worth less than $4,500 are traded in for new vehicles every three months. At best the current Cash for Clunkers program will fund 250,000 such transactions in the same time period--a gain of only 50,000 vehicles. Given that this program is budgeted to cost $1,000,000,000, this increase will come at the cost of $20,000 per extra sale."
Yes, but the goal of this program isn't just to encourage a trade-in towards the sale of a new vehicle but to remove those old vehicles from ever being driven again.
Either way this program spends money our government did not have in the first place. Therefore ..., should never have seen the light of day.