It has been a boxing match from Edmunds.com and the White House this week. It all started when Edmunds.com published the press release titled “Cash for Clunkers Results Finally In: Taxpayers Paid $24,000 per Vehicle Sold, Reports Edmunds.com“. The White House responded a day later on their blog with the post titled “Busy Covering Car Sales on Mars, Edmunds.com Gets It Wrong (Again) on Cash for Clunkers“. To counteract the White House blog post, Edmunds.com published another press release.
Edmunds.com analysis – The “taxpayer cost for every incremental vehicle sold was $24,000”
White House analysis – “The Edmunds’ analysis rests on the assumption that the market for cars that didn’t qualify for Cash for Clunkers was completely unaffected by this program.”
“Edmunds also ignores the beneficial impact that the program will have on 4th Quarter GDP because automakers have ramped up their production to rebuild their depleted inventories.”
Another thing to consider is even if buyers would have purchased a vehicle anyway (even without the CARS program), the amount of money they saved may have went into the economy in additional purchases – stimulating the economy further. For example, if a couple saved thousands on the price of a vehicle (that they were going to purchase anyway), did they go out and purchase a computer or TV due to that savings?
You make the call. Whose analysis is correct?