Cash for Clunkers = Bad Math $$
Median new car price: $25500
Average 1st year depreciation on a a $25500 car: $3825 Cash for clunker credit $3500 or $4500. Total cost to taxpayers: $1B.So, a net expense of $325 or savings of $675 over a one year old vehicle, depending on the mileage of the car--not including any possible trade-in or scrap value that the car would be worth. And this from BusinessWeek:Edmunds.com, which is benefitting from all the extra site traffic generated by CARS nonetheless issued a report Monday saying that each car bought under the progream would actually cost the U.S. tax-payer $20,000 per vehicle sold, not the $3.500-$4,500 actually paid out.
Edmunds figures that CARS will only help 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.