Cash for Clunkers cost me WHAT ?!?!

From CNN Money:

The Cash for Clunkers program gave car buyers rebates of up to $4,500 if they traded in less fuel-efficient vehicles for new vehicles that met certain fuel economy requirements. A total of $3 billion was allotted for those rebates.

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.

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49 Responses to “Cash for Clunkers cost me WHAT ?!?!”


  1. 1 Matthew Abang October 29, 2009 at 10:32 AM

    I think the title of the article basically sums up the whole point. Cash for clunkers was a program that ended up wasting a lot of money with not a whole lot of results. I remember seeing pictures of perfectly useable cars being turned into piles of rubbish. What a waste! The government could have given them away for less money. There are probably students on this campus who could have used a car. The next question to ask ourselves is what happened to the rest of the $3 billion the government gave to the program. They should have been putting this money to better uses, not destroying cars that are perfectly useable.

  2. 2 yvonne October 30, 2009 at 8:31 AM

    I agree totally with Matthew. What a waste! There are so many people out there right now who really need decent transportation and the cars I seen traded in, seemed in perfect condition. I saw a clip on the news about how some of these repair shops were loosing out on motor parts because the cash for clunker program required to have some kind of chemical to be poured down the motors so the motors would not be used again. Lots of businesses lost out from that program and also families who can’t afford new cars. Then to add to the open wound we the people are responsible for the money involved in the program. So who really made out!!

  3. 3 Carling October 31, 2009 at 4:38 PM

    My friend’s family did this when we were coming home from a camping trip. We spend 3 hours total in a Toyota dealership while her Mother decided between a Prius and a Camry. This families “clunker” was a ’98 Suburban in great condition. The family was already planning on getting a new fuel efficient car, so this program was just a reason to do it sooner rather than later. While negotiating the “Cash for Clunkers” made some comments on how it was just a waste of money, and that we “wouldn’t believe how nice the quality of the cars were.” The idea at first seemed like a great way to spur the economy, but now seeing the numbers has vastly changed my opinion.

  4. 4 Alejandro Plascencia November 1, 2009 at 6:09 PM

    The government should be putting the money into something else than a ridiculous campaign with the name Cash for Clunkers. There are a lot of people who could use those cars and the government could make money buy re-selling the used cars. This is an example of how the government makes dumb decisions to put our money into these irrelevant programs that don’t help out the economy

  5. 5 Nick Baumann November 1, 2009 at 7:28 PM

    Cash for Clunkers was a terrible idea. The program caused thousands of cars to be sold but,as the article says, it cost billions of dollars and the cars would have been sold eventually without the program’s help. So what was the use of wasting all that money? The program didn’t even accomplish its goal of stimulating the auto industry; sales lagged in the following month and even though sales were predicted to rise again this month, the growth was lower than it would have been if the program was never implemented. This is just another example of the government trying to plug up the economy drain by dumping ridiculous amounts of money down it. A total waste.

  6. 6 Robert Rey, Econ 100 November 1, 2009 at 9:01 PM

    I assumed that the Cash for Clunkers was supposed to get as many gas guzzling cars off the road while promoting fuel efficient ones. In terms of money, it didn’t sound like something the government was going to benefit from in the first place. Remember, it was originally supposed to help the auto industry sell more cars and promote more efficient ones. They were going to sacrifice something whatever happened. Still, I think the timing for it was bad with this weak economy. It was a rushed program that just put us more in debt. That’s our money they used for this, and we’re going to have to pay for it somehow.

    I agree with some of the findings Edmunds.com came up with. After seeing the fluctuations in gas prices and the bad repercussions that has come from oil recently, I want to believe people’s taste in cars are naturally changing. Even without the rebate people would have bought the same kind of cars the program promoted anyway. Also, in terms of general quality and efficiency, the upheaval of various U.S. based car manufacturers would have also motivated people toward the same purchases.

  7. 7 dlilpanama November 2, 2009 at 10:44 AM

    at first i though cash for clunkers was a good thing. i though they were taken cars that were bad that pepole couldnt drive any more and giving them money to make a down payment on a new car. i thought they were trying to help. now it seems like they were taken good cars just cause. yeah it might be better for like the air and things but still. they didnt have good reults it seems like it was a waste of money to me.

  8. 8 Michelle Benton November 2, 2009 at 2:20 PM

    In the beginning of this class I commented on another post about the Cash for Clunkers program. I was not a fan of the program to begin with and I still don’t see the good that it has done for our economy. Yes, it spurred a hike in our GDP for a couple of months, but what does it mean for the overall GDP in the long run. GDP is explained in our book as the sum of Consumption (C), Investment (I), Government Spending (G) and Net Exports (X – M). I’m a little confused as to whether or not the cash for clunkers money that the governemnt paid out would be considered part of government spending part of the formula. If it is, no wonder the GDP is up but it still doesn’t answer where the question of where is this money going to come from to pay back the spending.

    Secondly, you all who have posted comments that mention the fact that they just destroyed perfectly good cars. It is a double edge sword. On one hand, older, less efficient cars are now off the road and kept from polluting, but on the other hand, there are people out there that could use these cars to better their lives and become more productive people for our society. I personally don’t like the fact that the government is opting to pay to have these “clunkers” destroyed and added to landfills and scrapyards. In our book it said that the selling of used goods like old cars does not add to our GDP, but the people who could use these clunkers would not have bought a brand new car anyway so why destroy them instead of reuse them. I wish someone could clearly outline how this Cash for Clunkers program benefited and hurt our economy. It can be twisted so many different ways.

  9. 9 Amanda Chow November 2, 2009 at 4:19 PM

    Yes I also think that the cash for clunkers might have been a waste, but in the long run it could be a good thing. Obviously there are many trade offs with this program. People who do not have any type of personal transportation could have put those clunkers into good use and then the government could have received those sales off those cars. The government could have also set up a program that refurbished the cars also. The flip side I see is that now the individuals who traded in their car have a new car, and this car is suggested to be more efficient. If this is the case then there will be less pollution meaning cleaning air, and the owner will not have to pay as much gas to fill up next time at the pump.

  10. 10 Cole Norton November 2, 2009 at 8:50 PM

    The Cash for Clunkers marketing scheme was really all just a marketing hoax. The cars have to be approved by dealership and deemed tradable so really, as most people have said already, the cars that are “clunkers” are often better than the ones they are trying to trade in for. The government did a very poor job of trying to create a economic increase in revenue. The cash for clunkers campaign, like many other government campaigns, was pretty much a scam that did not help many people who could have really used the help, car or not, they could have used a rebate to do what they had to with it. The government had $3 billion unused spending dollars for the whole campaign, so why couldn’t more people receive rebates? The governments idea of helping people is flawed to say the least and did very little overall in this new cash for clunkers campaign.

  11. 11 Marie Moussa November 3, 2009 at 10:00 PM

    I saw the cash for clunkers project as a good attempt but realistically a waste of time and money. So many people were turning in descent cars that shouldnt have gone to waste. A lot of people count on peoples old cars because its all they can afford. We could have put the money to better use.

  12. 12 Mike Beretta November 4, 2009 at 4:19 PM

    I think the program was a waste of time and money. It was supposed to be beneficial as far as pollution, gas guzzlers, etc. but I agree, it was just a hoax. Doesn’t this mean that we as tax payers inevitably paid for all of this anyway? Taxes are what supply the government its money, so what was the purpose? I think they were trying to get the automobile industry back on it’s feet and keep the oil flowing from the mideast. It’s difficult to understand anything the government is doing lately and what benefits the US citizen will really gain from all of this.

  13. 13 Gina November 5, 2009 at 9:01 AM

    It seems like the goverment could be using this money for something a lot more important that “cash for clunkers.” Obviously a great majority of these cars are still useful, so why not sell them at a lower price, and gain money that way. It just seems like that 3 million dollars could have gotten a lot more use out of it somewhere else.

  14. 14 Gina November 5, 2009 at 9:02 AM

    It seems like the goverment could be using this money for something a lot more important that “cash for clunkers.” Obviously a great majority of these cars are still useful, so why not sell them at a lower price, and gain money that way. It just seems like that 3 million dollars could have gotten a lot more use out of it somewhere else..

  15. 15 Alex Stauffer November 5, 2009 at 12:48 PM

    According to this Edmund.com we would have made more in October if Cash for Clunkers had never happened. That’s great, but unfortunately it did and let’s take the money element out of it and think about all the others. Cash for clunkers was a beneficial way for people with very unfuel efficient cars and get ones that were. It saves them money on gas, not to mention the toxins that were being let out by that clunker that was hurting our earth. And it did kick start the economy in a way, it was a positive solution and I think it filled its purpose and helped people in the long run… what so wrong with that Edmund?

  16. 16 jonathan walden November 5, 2009 at 8:31 PM

    It seems like the cash for clunkers program was a great attempt to help cover the costs of our debt, but in reality it was not very efficient. The edmunds.com report about the fact that the majority of the sales would have taken place in the second half of 2009 seems inaccurate to me. I know many people that saw cash for clunkers as an opportunity to better themselves in the future and purchased new cars that they might not have purchased without the gov’t incentive. Its just a shame that so many perfectly running cars went to waste.

  17. 17 Evan Schlinkert November 11, 2009 at 6:37 PM

    My first impression of cash for clunkers was that people would give their old rundown vehicles and trade them in for a a down payment on a new car, but seeing that some people turned in cars that i would call “nice” makes the whole thing seem like a waste of money because if these “nice” cars are being traded in then to me it didn’t make sense.

  18. 18 Karla Martinez November 22, 2009 at 8:17 PM

    I completely agree that this project was a wasted effort. Although this attempt was meant to boost the economy, I feel that it may have also done the public a dis service by tempting people to trade in perfectly functioning cars for even better ones, a luxury that not many can afford nowadays. The government could have been a lot more productive if they had allocated that money to another project.

  19. 19 Jennifer Tarbell November 23, 2009 at 3:48 PM

    to even qualify for cash for clunkers program was already a joke in itself, my boyfriend tried and in the end said forget it and kept his car. half of the money has disapeared and it seems it was more costly than helpful to our economy. yeah they sold cars that month, but now…. its even worse than where it was to begin with, all the people who NEEDED cars got them for somewhat of a deal and now that its over people are trying to fix and make due with the cars they have. so cash for clunkers was a quick fix with no long term results.

  20. 20 Ciara Pedroncelli November 26, 2009 at 1:20 PM

    Even after this article, I think that Cash for Clunkers was a good thing. Maybe it did cost the country more money. But it’s plan was to get the economy to start moving which is what it did. It was an immediate success and the country actually needed to put more money into it because it was so successful. Is that not a good sign? Secondly, although sales were rough in September that was to be expected because so many cars were sold during the summer and the fact that sales increased or went back to normal in October was a really good sign. Finally, we need to look at this optimistically. Even if Cash for Clunkers made the country no money, it got gas guzzlers and cars that cause more pollution of the road which is good for the whole world. Global warming is something that we must always keep in mind and this will hopefully be another step towards fixing it.

  21. 21 Anna Hernandez November 28, 2009 at 10:50 PM

    nor surprised. someone had to pay for the transportation of the vehicles, pr for the program, marketing for program, employees who worked specifically for the program, and other expenses included in the stimulus. the idea of free money was what drew people in but unfortunately, some of their taxes also paid for the program they participated in. the benefits, however, are still grand. fewer “clunkers” will be on the road which leads to cleaner air. the downside, a new car is more expensive, insurance is higher as well, but a new car is usually more gas-efficient so gas allowances decrease. my question is…what about the modern clunkers such as SUVs and V8 vehicles? if the goal is to lessen the amount of “clunkers” on the road, then the government should try to enforce a policy that reduces the amount of, or prohibits, these vehicles from being available to consumers.

  22. 22 Genine Lobo November 30, 2009 at 7:41 PM

    Although some car manufactueres gained buisness during this time, this does not seem beneficial to these manufactuers in the long run. This program was not all helpful to the thousands of jobless citizens who contributed to this fund and did not purchase a vehicle. As Matthew previously stated, it is ridiculous that these cars were demolished when traded in. Many of these cars were in great condition and could have been sold at a discounted rate. The government seriously needs to figure out better solutions to help our country as a whole. Cash for clunkers worked out great for those who bought a new car, but what about the people who are in desperate need of help to get by?

  23. 23 Nubia Cazares December 2, 2009 at 8:05 PM

    I think cash for clunkers had a good intention, and had many people going to trade in their cars but at the end of the day more money was spent then was made. And they ran out of funds to continue to help more people. These cars were going to be sold eventually anyways, a fact that the government didnt inform the public about. There are people out there that would benefit having better transportation and if there was a program out there that would actually make a better impact then it should be done. But cash for clunkers just wasted more money than was needed, the governemtn made a poor decision and wasn’t even able to give an explanation for its faults.

  24. 24 nicholas joy December 2, 2009 at 8:28 PM

    this article shows us that the us car industry needs extreme reform. with their supply so high and demand so low the amount of money squandered on cars that are never bought or just sit in vacant lots for years is extremely high.The cash for clunkers program did deal with the issue of car makers needing money and many Americans needed more cars. just what was the government thinking if they were going to take a hit has big as 24 thousand per car.

  25. 25 eldiel December 2, 2009 at 10:25 PM

    I agree this program was a waste. Pointless even. The idea was good, but the execution, even the planning was a failure. Even though it stirred business into the car dealerships, the government lost money, the taxpayers lost money, and cars got destroyed. I agree with the comment above that the car industry needs a giant reform. There has to be easier more efficient ways to save money and retire cars that pollute the environment.

  26. 26 Britany Linton December 3, 2009 at 9:48 PM

    I agree with the first two responses for sure. This seems like a complete waste. WHen i saw billboards for cash for clunkers i thought the cars were going to be donated to families in need or used for something to help out people. When i learned that the cars were being turned into piles of rubbish i got mad. THis was just another stupid idea from our government.

  27. 27 Samantha Fagundes December 4, 2009 at 4:20 PM

    When I first heard about Cash for Clunkers, I really thought it would be a good thing. But I agree with what most people are saying, it was basically a waste. The government lost way too much money than it needed to. The intentions I think were good but in the end it turned out to be a disaster.

  28. 28 Samantha Vavricka December 4, 2009 at 4:28 PM

    What’s going to happen when the people that bought these cars that necessarily couldn’t afford them can’t make there car payments anymore. Back to square one.

  29. 29 Jacqueline Guerrero December 5, 2009 at 10:29 AM

    I’ll be honest, I did not know all the details about the clash for clunkers program. I thought that it was to benefit families in need and those hit hardest by the economy. Now that I have read this article it has changed my point of view on the subject. In the short run it did boost the automobile industry but in the long run i just think that it was a waste of time and money.

  30. 30 Francine Zumbo December 5, 2009 at 4:49 PM

    I think case for clunkers is a waste. I also thought the cars would help those that needed it or benefit families. This program is a waste of money.

  31. 31 Kali Hardcastle December 6, 2009 at 2:03 PM

    this is the first time that i have actually heard of this project. it seems like a good idea in theory but it seems to me that its just a waste of money and decent cars. they want to make cars more fuel efficient but to what end? destroying and wasting other decent cars? they could have used the money for rebates to clean up the traded in cars so that they run a little better with what they have now. it seems a little silly to be wanting to give rebates to increase car sales of more environmental friendly cars but what happens to the waste of destroying all the other cars? waste of resources if u ask me.

  32. 32 Vince Kaehler December 6, 2009 at 4:29 PM

    I do not think cash for clunkers helped at all. it may have helped the automotive industry, but it hurt other industries such as car repair shops. it also took tax dollars that could have been spent on other more important things.

  33. 33 Sarah Reddell December 6, 2009 at 11:19 PM

    This does not surprise me. From the start of the Cash for Clunkers i felt it was too good to be true. I wondered where the money for buying these clunkers came from, our pockets! It upsets me that even our government isnt able to fully research such a large program. This program was a bad idea from the start, doing more harm than good.

  34. 34 Lukas Bradvica December 6, 2009 at 11:49 PM

    I agree with Vince on this article. It helped the automotive industry as they sold more cars and more cars were insured. But Cash for Clunkers was an opportunity cost as the money was spent on car sales instead of on other things. Cash for Clunkers helped the sales part of the automotive industry, but hurt the repair side of the industry as the all the old cars that needed fixing are now gone and replaced with newer more efficient cars.

  35. 35 amos mccray-goldsmith December 7, 2009 at 12:07 AM

    the whole cash for clunkers program seems like it was completley counter intuitive. not only did the rebates cost less than the actual cost of doing the whole thing, the amount of fuel efficiency and carbon emmisions saved is such a minute number that the whole thing can be seen as almost a setback. plus the amount of garbage all the cars traded in could not be great for the environment either.

  36. 36 Yolly T. December 7, 2009 at 7:57 AM

    I agree with Matthew, this Cash for Clunkers did not help at all. In the end, it just wasted more money. And it’s the governments money which means that it comes from our tax money. So we are actually getting our money back. But this plan was just not in anyways effective!

  37. 37 Josh Highness December 7, 2009 at 3:07 PM

    From what I understand the concept behind the Cash for Clunkers program was to take the less environmentally efficient cars off the road while also boosting car sales since prior the industry had been in a slump. I agree there could have been a better output of government funds to achieve this but the Cash for Clunker plan did work to an extent. I have to add though putting the traded in cars right back on the road for the needy would have entirely defeated a large part of the purpose of the program.

  38. 38 Chris Griffiths December 7, 2009 at 6:41 PM

    While clunkers may have been a waste it did help boost auto sales at a time when several of our largest car manufactures were sitting on the edge of oblivion. However, the program could have been much more efficent and could have used some of the so called clunkers in a better fashion then destroying them for scrap metal.

  39. 39 Justin Castro December 7, 2009 at 9:03 PM

    There are clearly both good and bad things about the cash for clunkers program. It did help increase auto sales at a time where the main American car manufacturers were either going under, or nearing that stage. But at the time it just ended up losing a lot of money for an already struggling economy.

  40. 40 Nicole Hernandez December 8, 2009 at 9:19 AM

    At first I thought it was a good idea, but after reading this article, it changed how I felt. It was a waste of money, and we ended up having to pay from our tax money.

  41. 41 Stephen Cassinelli December 8, 2009 at 7:59 PM

    I do agree with what people are saying about how there are both good and bad things that are involved with the cash for clunkers program. I feel like the economy to a big blow because of the deals that were being made on cars. Although many dealerships were jump started, a lot of money was lost in trying to get this program up and running. Ultimately it is a trade off with the way the economy is affected and the way the dealerships were saved.

  42. 42 Jamie B December 8, 2009 at 9:21 PM

    I thought this program was really positive untill i read this article. I can not beleive the amount of money and cars that were wasted. it seems like the government was trying to rush a process that was already going to take place.

  43. 43 Kyle Ray December 9, 2009 at 12:57 AM

    I would like to point out that I bet California has wasted a lot more money on a lot of worse ideas. At least the idea behind the cash for clunkers program was in the right place. Fuel efficiency and climate change are probably the most important issues that we face today.

  44. 44 Broderick Nickelberry Jr. December 11, 2009 at 2:44 PM

    I think lot of money was wasted here just giving the taxpayers money up and it could have went to better places. and I also believe that you could have got for 2k or 4k off the price of the car with out giving them your car with a little negotiating.

  45. 45 Heinrick Devera December 12, 2009 at 11:37 AM

    When I first heard about the Cash for Clunkers program going on, I thought it might actually help out a little. Now I see the whole picture with the government spending a lot more than saving. It doesn’t seem like the economy can be fixed this way. At first it seemed like a good way to get people to buy more cars. Then later on it turns out to be another bad program. There has to be another way to get people to buy without the government spending excess money, which we have a limited amount of right now. Plus the country is in debt. Cash for Clunkers turned out to be more hurtful than helpful.

  46. 46 Charles McNeil December 12, 2009 at 9:02 PM

    Big numbers. But I guess that you just have to hope that it ends up paying environmental dividends in the future. I don’t think that the whole cash for clunkers thing will make too much of a dent. But I find it encouraging that we are finding ways to invest in the environment, every which way we can. I prefer grandiose green investments to say, grandiose investments in war.

  47. 47 Taylor Latt December 14, 2009 at 1:46 PM

    This article is a perfect example of how the media plays a roll in our understanding of situations. it seems like everyone is saying “it looked like a good idea.” thats just it. it LOOKED like something to help out our economy because the news and everything broadcasted about this was put out there for consumers to BUY BUY BUY! they dont tell you all the details, they just want our money and we are handing it to them. like feeding paper to a shredder.

  48. 48 Hayden Scott December 14, 2009 at 5:17 PM

    I think this is fairly amusing, the snickers and comments of “the government should have just bought people cars” was something I heard quite a bit when these numbers were coming out. The fact that the program quickly ran out of funds tells me that they weren’t quite ready for the level of commitment monetarily that they would have to give when they decided on pursuing the program. I was listening to a Planet Money podcast a couple weeks ago where they interviewed one of the guys who were really pushing the idea initially and his big take was that his proposal was for a program that would have had a much greater time horizon. This would have allowed not only those who were going to pick up new cars in the short run, which was not the point, but to grab others over about a year or more time and provide incentives to adjust THEIR behavior.

  49. 49 Kelsey Zeller May 17, 2010 at 10:13 PM

    After reading this article my opinion compeltly changed. I at first thought that this was a great idea. Save people money and gas, but after reading this and looking at the numbers it was a crazy idea that the government thought they could pull off. What was suppossed to be a helpful idea turned out to be more harmful to the economy.


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