Did the government lie about the number of clunkers that were traded in during the CARS program?
I just came across an interesting article this morning. Before I post the link I need to preface this by saying that while Edmunds.com sometimes provides accurate, useful information...sometimes they are waaaaay off on their auto sales forecasts, "True Cost of Incentives," and other reports that they publish. Heck they stated before the whole Cash for Clunkers program that they didn't think that it would have a large impact upon auto sales. So that's one example of a major mistake that they have made just a couple of months ago.
Having said this, this press release is interesting:
Edmunds.com Tallies "Cash for Clunkers" Numbers; Uncovers Another Discrepancy
Here's a quote from it:
August was perhaps the strangest month in automotive history. Thanks to "Cash
for Clunkers," there was an unprecedented range in analyst`s sales forecasts.
Now that the numbers are out, analysts at Edmunds.com, the premier online
resource for automotive information, have reviewed how things actually played
out, and have uncovered some mysteries in the process.
For example, the government`s press release reported that the program took
690,114 "clunkers" off the road. However, Edmunds.com`s experts tracking the
program report that "clunker" trade-ins never accounted for more than 33.4
percent of weekly sales.
"It is mathematically impossible for there to have been nearly 700,000 new car
sales during the course of the program, given the actual sales numbers announced
by automakers who should have no motive to under-report," remarks Edmunds.com
Senior Statistician Zhenwei Zhou, PhD. "The prominence of that number in the
media does help to explain why some analysts` sales forecasts were way too
One possible explanation for the discrepancy is that consumers were allowed to take advantage of the Clunkers program on ordered vehicles. Perhaps some of those orders are in the system and they will be counted in the September sales totals when they are actually physically delivered to consumers.
Either way, it would not surprise me in the least if the government CARS program ended up being extremely wasteful, with way too much overhead and leaks in the system that took away money which could have been used on trade-ins. In which case itis possible that someone or multiple individuals who were involved in the program fudged the numbers to make it look more effective than it really was. I don't know whether this was the case or not, but always take the numbers with a grain of salt my friends.
There certainly will be a dramatic drop in September auto sales, however this drop might not be as large as I initially thought it would be if A) there are a number of vehicles that consumers ordered during the CARS program that weren't delivered until this month and B) the effectiveness of the program was exaggerated meaning that there was slightly more "real" demand for autos last month than many believe. Interesting stuff.