Cash for Clunkers results
I guess I must be on the wrong page:
A vehicle at 15 mpg and 12,000 miles per year uses 800 gallons a year of gasoline.
A vehicle at 25 mpg and 12,000 miles per year uses 480 gallons a year.
So, the average clunker transaction will reduce US gasoline consumption by 320 gallons per year.
They claim 700,000 vehicles so that's 224 million gallons / year.
That equates to a bit over 5 million barrels of oil.
5 million barrels of oil is about ¼ of one day's US consumption.
And, 5 million barrels of oil costs about $3 50 million dollars at $75/bbl.
So, we all contributed to spending $3 billion to save $350 million.
How good a deal was that ???
They'll probably do a great job with health care though!!
Yeah, right!!
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And saving $350 million over the life of those cars...let's say an average of 7 years gets you a total savings of:
ReplyDelete$2.45 billion
Add to that the reduction in greenhouse gasses, a reduction in air pollution, an increase in vehicle occupant safety, and a shot-in-the-arm stimulus for the auto industry...
I'd say it was pretty good deal.
You fail to mention the sales is created for a slumping automobile industry...
ReplyDeletemost of the clunkers traded in were american and most sold were foreign,
ReplyDeletethe american car dealer mechanics were hurt by pulling service needing cars off the road and the newer vehicles that were sold won't be serviced at goodwrench etc.
I just don't understand this...???
i've also read that the dealers are being given extra stimulus $$ because they obviously will not sell anything for the next few months? so what is the true cost?
Does any of this make sense to anyone?
Is the cost of destroying perfectly fine vehicles included anywhere ?
Howbout the environmental costs?
Someone please explain
Failed logic is failed.
ReplyDeleteThink outside the box there Joe.
This wasn't a "SAVE AMERICA FROM BUYING SO MUCH OIL" scheme.
Foreign cars were bought because for too long American manufacturers sacrificed long-term sale trends (hybrid/low mileage vehicles) for short term gains (SUV's). But with more foreign car companies opening up factories in the US, especially in the south, who cares if the cars bought were foreign or domestic.
ReplyDeleteThe natural economic shift caused more people to buy hybrids when gas prices soared last year. Hence, auto makers started making more fuel efficient cars. Some dealers are offering cash for clunkers without the gov't so how does this help the taxpayer? Answer: Cash for Clunkers didn't help the economy. It will take 8 years to recoup the trillions spent on it but now that the money has run out, car sales are going to go back down. SUVs were what the economy wanted when gas prices were low amd the market corrected, of course it wasn't instantly but nothing happens instantly. We, the taxpayers, would have been better off if the gov't hadn't intruded and maybe paid the companies that recycle real unusable clunkers and 1970s gas guzzlers that were past their useful life.
ReplyDeleteWhat trillions were spent on C4C? I remember the allotted amount being 3 billion. Even if you through in interest on borrowed money and administrative costs, I'm not sure you you get to trillions.
ReplyDeleteForeign automakers shifted their focus to fuel efficient cars long before gas prices sky rocketed, which is why they are cleaning up now.
And all you dummies who ran out and bought big SUV's and trucks (I do not include the construction workers, residents of North Dakota, or others with legitimate uses for these vehicles) are the ones to blame for high gas prices.
Something else to consider-some of these "clunkers" were nice vehicles that were paid for. Now you have all these people with car payments for the next 4-5 years- right at a time when the economy is collapsing. How many of the these new vehicles will be reposessed in the next year? Isn't borrowing money for things we don't really need part of what caused the mess we're already in?
ReplyDeleteSo the government subsidizes new cars to encouage more of the same irresposible behavior-par for the course for the idiots who are running this country. It was just another taxpayer funded gimmick to help bail out the labor unions and manipulate the market to make it look like the economy is getting better. You better get ready to dig in folks - things are about to get real bad! If we make it to 2010, we've got to drain the swamp of the corrupt scum in congress.
Whereas I agree the cash for clunkers was a bad idea, there are some major problems with the math in this.
ReplyDeleteFirst, it says "224 million gallons" of gas "equates to a bit over 5 million barrels of oil."
Not even close. A barrel of oil is 42 gallons. Even if all 42 gallons was turned into gasoline, 5M barrels would only yield 210 gallons. However, according to the DOE, U.S. refineries produce between 19 and 20 gallons of gas from a 42 gallon barrel of oil. Splitting the difference, and using 19.5, means that in order to get 224M gallons of gas, you'd need about 11.5 million barrels of oil.
So the savings in U.S. oil consumption is more than double of what it states.
But having said that, I now will ask: What's with the shell game of converting into barrels of oil to come up with a savings dollar figure?
This little ditty started out with how much two cars burn in GASOLINE per year and the savings -- in gallons of gasoline. The savings are going to be in the cost of gasoline, not the cost of a barrel of oil. If you use the price of a barrel of oil on the open market, then you need to take into account the other byproducts of a barrel of oil, the refinery costs of the gasoline, etc.
But all that has been figured for you -- at the pump!
Bottom line -- ignore all the double-talk about a barrel of oil, and the bad math about how much oil it takes to get 224 gallons of gas.
Assuming the earlier numbers are correct, and the savings is really 224M gallons, then pick a number, let's say $2.60/gallon nationally.
Therefore, the savings is 224M gal x $2.60/gal = $582.4M, or just over a half a billion dollars.
Divide 3B by 0.5824B says that we will break even in a little over 5 years.
But the ultimate question for me is: "Why should I have to pay for someone else to save $4,500 on their car purchase?"
I really struggled with this program. I have a ten year old SUV that I could have traded in. I thought about the payment and the increased insruance and decided I could get the SUV serviced again and make it last another two years. My biggest problem with the program is that is supported the same thought process that made so many new homeowners become people in risk of forclosure. The question is simple, either you can afford a new vehicle or you can't, regardless of what program is out there. Many Americans buy now and think later. We have a huge entitlement syndrome in this country.
ReplyDelete